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Project Black Acquires My Code

November 30, 2023

MEMORANDUM

 

TO: Clients and Friends of Ariel Alternatives, LLC
FROM: Les Brun, Co-Founder, Chairman and Chief Executive Officer
DATE: November 30, 2023
RE: Project Black Acquires My Code

Today, we are pleased to announce that we have acquired My Code, a leading US-based media and advertising services company focused on multicultural marketing. This acquisition was made possible through Project Black, our inaugural fund which closed this past February with $1.45 billion in capital. My Code strongly connects with our mission to create scalable, sustainable minority-owned businesses to service the Fortune 500.

Transaction Rationale 

We were introduced to My Code (the “Company”) earlier this year through our relationship with Vaughan Capital Advisors. We immediately saw a potential fit given My Code already serves the Fortune 500 in a meaningful way through its focus on multicultural audiences. Following a limited sale process led by Raine Securities, we acquired a 58.5 percent stake in the business from existing shareholders Falfurrias Capital Partners (“Falfurrias”), My Code management and employees, and other investors at an enterprise valuation of $400 million—based on current and future performance projections. The sellers will continue to own a minority interest in the Company.

My Code connects consumer brands and agencies seeking to reach multicultural markets at scale with the Company’s owned and operated as well as third-party publishing assets. The business offers integrated services across consumer insights and data, creative content development and media, and advertising solutions. My Code boasts a network of over 1,200 publishing partners that reach diverse audiences, including: 110-year-old El Diario, the US’s oldest Spanish-language newspaper; Remezcla, one of the most influential digital media brands for the Latine community; and advertising-based video on demand platform Butaca TV. The Company has gained differentiated access and insights to diverse consumer groups, including Hispanic and Black audiences, and exceeds the majority of its digital media peers in audience reach.

Initially founded in 2015 as “H Code” and focused on providing solutions to reach the Hispanic market, the Company rebranded to “My Code” in 2021 following the acquisition by Falfurrias. Since then, it has expanded its products to reach a broader set of multicultural audiences, including Asian American, Native Hawaiian and Pacific Islander (“A Code”), Black (“B Code”), Women (“W Code”) and LGBTQIA+ (“Pride Code”).

Go-Forward Strategic Plan 

We believe My Code has ample runway to expand revenues and cash flows, and benefits from a strong reputation as a high-quality advertising services provider. Throughout our due diligence we worked with the Company’s management team to execute Project Black’s “Demand Aggregation” process. In “Demand Aggregation,” we engage with a target company to proactively identify and track sales prospects for its products and services among Fortune 500 procurement executives, leveraging relationships we have built over decades.

In My Code, we believe we have a head start—the Company has successfully delivered demand services and provided value-added capabilities to over 250 customers, including an exceptional client roster across the Auto, Consumer Packaging Goods, Entertainment, Financial Services, Government & Education, Healthcare, Political, Retail, Technology, Telecom and Travel sectors. My Code has three core business offerings for corporations looking to increase their advertising reach:

  • Intelligence Center provides data insights to brands and agencies from a collection of panel research and other datasets including 40,000 to 50,000 interviewees
  • Creative Studio assists brands in developing content informed by data for specific multicultural audience segments
  • Media Solutions delivers audiences across audio, video and display via owned and operated digital publishing partners

In addition to our confidence in My Code’s current platform, we are enthusiastic about the prospect of expanding the Company’s capabilities through organic and inorganic growth opportunities, which can help catalyze the Company’s progress and scale its business model even further.

We are also encouraged by My Code’s seasoned executive leadership and broader employee base, 87% of whom hail from multicultural backgrounds. We were drawn to My Code’s emphasis on impact and representation, as well as its desire to partner with us to increase their efforts in areas such as employee wealth building, diverse vendor spend and career progression.

Looking Ahead

Project Black aims to pursue 6-10 platform investments through a rigorous review and direct engagement with prospective target companies and their advisors. Since our acquisition of Sorenson in April 2022 and our subsequent purchase of Latina-founded translation services firm CQ fluency to complement Sorenson in May 2023, our investment team has been working diligently to identify the next platform to position as a Tier 1 supplier to the Fortune 500. My Code offers us the opportunity to further diversify our portfolio with a Company keeping pace in a rapidly evolving industry.

We believe this business will not only achieve financial success but will also continue to do well by doing good, aligning with Project Black’s mission.

Should you have additional questions, please reach out to [email protected]. We look forward to keeping you abreast of exciting new developments and sincerely appreciate your interest in our efforts.

For more information on this announcement, please click here to read our press release.