Spike has acquired Web developer and heavy media production company New Toys for $1 million in cash and 1.38 million Spike shares, it was announced last week.
Three-year-old Web developer New Toys specialises in Web streaming of audio and video, film broadcasting and television and has big-name clients such as the Australian Army, Aristocrat, Andersen Consulting, Canon and the Australian Radio Network.
Under the deal finalised last week, the two will retain their separate brands but both Spike and New Toys are not ruling out closer ties in the future, including Spike moving offices to Pyrmont.
Chris O'Hanlon, Spike's CEO, said the purchase adds greater expertise to his company, particularly in the realm of videocasting. The two companies are closely aligned culturally and both New Toys' managing director Tim Seager and O'Hanlon share a similar vision of entertainment online, he said.
The acquisition gives Spike a wider skill base in which to reach its target market - youth - and the two companies will be working on projects together in the future.
One project confirmed by O'Hanlon is a live Web-a-thon for Canteen, the teenage cancer charity. It will be relayed to a big screen in Australia Square and will feature two celebrities. O'Hanlon was reluctant to outline details of future projects but said there are some things in the pipeline and "we will tell you more about them closer to the time".
O'Hanlon indicated Spike is looking to acquire other companies in this space and in the content and venture space.
Commenting on the buyout, Seager said: "It's a good fit."
Both Spike and New Toys have complementary skills, he said.
For Spike the deal looks to be a profitable one as New Toys has doubled its revenues year on year.
"This financial year we'll turn over between $4-5 million and the forecast for the next is double that again," Seager said.
New Toys grows about a person a month and has targeted high-profile identities in specialist areas such as Mark Cheeseman, the editor of Zdnet, and Mark James, who has international experience in broadcasting.
The Web streaming company is the technology brains behind the live Web casts and Web sites of Sydney radio stations Mix106.5 FM, 2WS and Melbourne's TTFM.