Good morning, everybody. Thank you for joining us here today. Our CEO, Maximilian Martin, will be walking you through this exciting news surrounding the transaction. We will be having a Q&A session at the second half of this webinar. You can already submit your questions by hitting the Q&A box at the bottom of your screens. If you would rather ask a question live, please raise your hand.
Thank you very much, Lucas, and good morning, everyone from my side as well. My name is Max Martin. I'm the Co-Founder and CEO of Enhanced. Earlier today, we announced that we're acquiring a controlling interest in a pan-European live entertainment platform called DEAG. As Enhanced, we're extremely excited about this transaction and what it will allow us to do going forward. Without further ado, we have also published investor materials alongside it. I'm going to pull them up and walk you through the presentation. Quickly on transaction highlights. We are acquiring approximately 77%, a controlling interest in DEAG, from a consortium of a couple of shareholders. We are doing this in an all-stock transaction. So for every Enhanced share, people that have 1.7 DEAG shares will get one new Enhanced share, which will lead to the issuance of total 11 million new shares.
DEAG is getting acquired at EUR 4 per share, which implies an equity value of EUR 100 million for the transaction. It is a phased approach because over the long term, we potentially evaluate and look to acquire 100% of DEAG. So after the initial close of the 77%, we'll look to increase our ownership stake in the business over time. Alongside this transaction, we have also raised additional growth capital, a total of $15 million as unregistered common stock, which we expect to close concurrently with this transaction. From a governance perspective, one thing that is important to note is that our largest shareholder, Apeiron, which is our Co-Founder Christian Angermayer's family office, has held a stake in DEAG before.
In order to be properly set up from a governance perspective, what the company has done, it appointed the three Independent Board Members to a Special Committee, which in itself also, with its own counsel and bank advisors, has reviewed the transaction and voted in favor of us as an organization going ahead with it. Why are we doing this? As Enhanced, what we have built is a company that offers both sport as live entertainment and products that help people become the best versions of themselves. When I think about life and I think about people, what we all have in common is two things. We all have a body, and we all have time on this planet that is limited. So in my opinion, what we should do is try to maximize our joy and experience as we go through life.
With everything that is happening in AI and robotics, everything that is digital is going to be more and more abundant, and I don't think that people will spend more and more time in front of screens as AI and robotics hopefully give us a lot of time back. So what we're really setting us as an organization up to do is to continue to invest in what we call the flip side of AI, where people will be handed back time that we'll look to spend on doing something. We believe that what that is going to be things that are truly human, things that are authentic, live, things that we can share in communities with other people. This is why we are now massively investing into the space of live entertainment.
The live entertainment sector is a sector that's been very much growing, lots of activity in the industry in terms of M&A as well. I'll skip through a few of these slides to just keep you mindful of time. DEAG at a glance. What does the business do? The business is set up through a variety of different verticals. What I said before is sport kind of is already live entertainment, so that now becomes our first vertical within live. What DEAG brings us is many other verticals alongside that. First one, for example, is festivals and owned IP. The festival that you see here is Airbeat One. It's a festival in Germany. It spans four days, more than 200,000 attendees per year, more than 350 DJs across nine stages. Absolutely incredible festival, and DEAG has more than 30 of them.
They are also the leader when it comes to techno and EDM and rock festivals. Historically, where the business has come from is touring and concert production and promotion. What you see here is, for example, Ed Sheeran in London, sold-out arena. Ed has actually been within the DEAG group since he was discovered. For example, next year, he's playing shows in the U.K. and London, and DEAG is basically managing the entire production and promotion of those shows. Another segment, which is very fast-growing, very interesting, is, for example, spoken word. Spoken word, you see here President Obama at the O2 Arena in London, where other than basically hiring a keynote speaker and renting the venue, not much more goes into the production of it. People have really started adopting this format much more, and it's also commonly referred to sometimes as live podcasts.
It's very popular and very fast-growing, and actually, this segment, DEAG has started producing events in 2026 already. Lastly, what it does as well, it doesn't just broaden the verticals horizontally of live entertainment that we offer, but also gives us other vertical layers within the live entertainment space. So, for example, DEAG owns the third-largest ticketing provider in Europe called myticket, through which they sell more than 12 million tickets a year. What does that mean in financials? DEAG is expected, from what we believe, to bring in EUR 520 million in top line for this year, which is growing to EUR 600 million next year, and I'll talk a little bit about that in a second. From an EBITDA perspective, at EUR 14 million this year to EUR 27 million next year.
That revenue growth, we believe, will come from, A, a growth in the touring and promotion business, but also a further continued strategic focus on both the spoken word vertical as well as the ticketing vertical. Since particularly spoken word and the ticketing business are much more EBITDA-margin-contributing than the other segments of the business, that's why we see such an over-proportional increase in EBITDA versus what some could expect. What I would say as well is that the scale of DEAG is truly magnificent. On a yearly basis, they produce around 6,000 events per year across all these various different verticals, so it's extremely diversified and truly a moat in terms of being capable of pulling so many events per year off. One thing that is very exciting for us about this transaction as well is the level at which we can acquire it.
We have had a lot of negotiations with the selling shareholders of the target, including Apeiron, on where to acquire DEAG. We have now negotiated an acquisition price of 5.3 x EBITDA on a forward-looking basis, which is a steep discount to where we would see trading if it were public. One thing maybe to compare it as well is DEAG on a European basis, it's a very similar setup to, for example, Live Nation. That's why we put them here in the comps. Live Nation, as you can see, is trading at almost 3x as much as we've acquired DEAG at. Eventim, which is a European comp, at almost three turns higher. Why are we looking at TKO on the slide as well?
Because TKO also invests a lot in live entertainment, but what it brings on top is these two incredible sporting brands, the UFC and the WWE, while we have our Enhanced Games. We believe that just from how economically interesting we were able to acquire DEAG, that should be massively accretive for our shareholders. This steep discount is not just in the public comps, but also in the precedent comps. Picked three precedent comps specifically, Superstruct being one of them, a conglomerate of festivals with more than 80 of them acquired at more than 10 x two years ago. See Tickets in the ticketing business in Europe, acquired by Eventim, the company from the slide before, at more than 11 x.
ATG Entertainment, which is a combination of theaters across Broadway and the London West End, by MARI, which is Ari Emanuel's investment group that acquires everything from Frieze Art Fair to tennis tournaments to rare car auctions, et cetera, with a really aggressive investment strategy in the live entertainment space, acquired at more than 20 x. That just shows, A, that the space is extremely active, but B, as well, that the precedent transactions as well, just as the trading comps, are much higher than the price at which we're acquiring DEAG at. What that leaves us with on a combined basis going forward is at a top line of $670 million by next year, reflecting a more than 20% revenue growth coming from this year, and an EBITDA improvement from - 40 to + 26.
What is here really important to call out as well, if I look at both of these businesses on a standalone basis, on the Enhanced side, what we have on standalone is, A, the Enhanced Games and all of the sporting activities that we do, as well as our Live Enhanced consumer platform. Particularly here, we expect to be breaking even in both segments of the business by next year, and then the DEAG improvements we talked about just before. I also want to take an opportunity quickly to walk you through what has happened on the sporting side. As you know, and for many people maybe that might have not listened to as much from us yet, we have the Enhanced Games as our annual flagship event. With our first Enhanced Games in May this year, we delivered a sporting event that many didn't believe we could.
That sporting event included 42 athletes, of which the majority of them were on performance-enhancing drugs. All of the athletes that were on performance-enhancing drugs were healthier and performing better than they ever have before. Across the 42 athletes, we had 21 personal bests, we broke a world record, but the most exciting thing is the entire world knew about it. We engaged with the content of the games, more than 1 billion people across the globe. We had more than 4,000 press articles written about us, more than 200 journalists there, 350 creators, and truly made an impact across the globe. We have since expanded with our second sporting series called the Enhanced Breakers, which is a much smaller, more intimate sporting event series focused on giving fewer athletes the opportunity to truly shine.
Our first event was in July in L.A., where we also broke a world record, and most of the audience was creator-focused to help us maximize and distribute our reach. Both of these are spectator events. However, the Enhanced community goes beyond just watching sports, which is why, as of next year, we'll be starting with participatory events. In participatory events, we're giving people the opportunity to be part of the Enhanced ecosystem themselves by partnering with existing sporting platforms, as for example, in the triathlon space, endurance races, open water swims, half marathons, et cetera, to co-brand together with existing successful businesses, and give our fans the opportunity to participate in there as well. On the consumer front, some of you might have seen it, I am so proud of it, we have launched six peptides earlier this week as part of our RX telehealth product offering.
Before that, we had 12 prescription drugs. That's now been amended to 18 across four verticals. The first is metabolic regulation, so standard GLP-1s, hormone optimization, hormone replacement therapy for women, TRT for men, cognitive enhancements, and now an expansion in peptides. We previously had already two peptides, sermorelin and GHK-Cu, beyond the GLP-1s, and now we've added six more. I'm extremely proud specifically about that. We were very much involved in trying to facilitate a regulatory change about the peptides, and are now offering those through the Live Enhanced platform. On the supplement side, we still have two stacks, Longer and Stronger. Longer focused on longevity, and Stronger on strength and recovery. Both of these, from a formulation perspective, extremely well put together with the clinical doses of each substance, and not just having the substance on the label to have it on the label.
We've started recently shipping the supplements also internationally beyond the U.S. to 33 international markets. Lastly, what we talked about at last earnings is Enhanced OS. Enhanced OS is about to be launched as well, and what we do with Enhanced OS is we bring the approach from athletes to our consumers. Right now, when you go to our homepage, you can look at each of the products and start an evaluation process and see if you're eligible for them. However, the initial interest is really driven by yourself. That was not what we did with athletes. With the athletes, we did baseline assessments of all of them and benchmarked it against the events that they were doing to come up with personalized protocols. As you can imagine, a female swimmer might be on a very, very different protocol than a male weightlifter.
It always depends on who you are as a person and what the specific objective is that you're pursuing. Through Enhanced OS, we'll be able to do that. It's going to be able to pull all your electronic medical records, offer you diagnostics as well, take that into consideration to form a baseline view about who you are, and then we'll learn from you what your goals are. Are you 25 training for your half-marathon, or are you 45 looking for more energy so that when you come home from 10 hours of work, you're more present with your kids for one hour before they go to bed? It also lets you integrate your wearables and monitor you over time and can truly become the guiding hand on your enhancement journey. As your physiology also changes, protocol recommendations will change.
For example, the protocol that I'm on today is different than it was six months ago, it's different to what it was two years ago. The common denominator for me, though, however, is that I'm always enhanced. Enhanced OS will be able to take you on your long-term health journey in thinking about enhancements. Where does this leave us now? I said this beginning already, but we are truly transforming as a company. We'll continue to invest into the flip side of AI. We'll have, through DEAG, a very massive European, and starting to be more and more international, live entertainment and ticketing business already, and we'll detangle sports and consumer even more to own them more separately and operate them more separately as individual companies. We look to do more acquisition with that going forward as well.
I skipped one slide, but I want to quickly, because we want to reserve enough time for Q&A. What we're starting to do as well is starting to build a flywheel, where we offer more and more live entertainment offerings to people around the globe, and we learn more about their desires and what they want to do because we own the entire journey. In the medium term, what I would be really excited about realizing is the synergy about connecting our existing consumer business with the existing live entertainments business from DEAG. We talked about Airbeat One before, four-day festival. We all know when you go to a festival, you might drink a little bit more alcohol than you typically do, eat a little bit more junk food than you typically do, and sleep less than you normally would.
It would be absolutely incredible to touch base with the 12 million people that we reach throughout the year to tell them, "Hey, you're going on this festival. How about you bring XYZ supplements with you to support you while you're there? Once you get home, how does your recovery stack look like?" One thing that we talked about as well in our press release today is that we want to continue with further acquisitions. This is both for Enhanced as a platform, but also on the DEAG side for bolt-on acquisition. For Enhanced, areas that I'm very excited about is actually both in live entertainment space, but even vertically integrating within what we currently have. Sports has been so active. We see so many new sporting leagues coming up. There's a ton of opportunity for us to invest in that space even more.
On the consumer side, think about our next steps in terms of vertical integration through, for example, acquiring a compounding pharmacy, lots of other things. So, really excited portfolio of companies that we can consider to invest in even more. On the DEAG side, DEAG has a history of successful M&A. They've bought more than 30 businesses over the last seven years, and currently actually have a pipeline of potentially looking at acquiring even 20 more. As management of Enhanced, we're very supportive of that strategy and want to help them on that too.
Lastly, I'm kind of on time to reserve the 10 minutes for Q&A, but I would really love you to take away from this is that AI is going to radically change over the next five, 10 years the way that we live, and we believe that people will get that time back and become more human. We have a massively attractive valuation at which we've been able to acquire DEAG, and it immediately adds enormous size to our business, which we can then utilize for further growth going forward. So, I would like to then maybe pause it here now. You'll have a few pages in the appendix. The deck is online as well. But maybe pausing it here now, and let's go into the Q&A.
Amazing. Thank you, Max. We have a question here from Magnus. How does DEAG music and non-sports or health-related events fit into the business model and strategy of health and performance optimization?
Thank you for making that question, Magnus. How does it fit in? It fits into a much broader story than the one that we're typically coming from. We are now completely repositioning ourselves in terms of investing into the flip side of AI, and we have already had, with sports, our first live entertainment vertical. What we're doing with that acquisition is, A, adding many more live entertainment verticals, concerts, festivals, spoken word, et cetera, but also we're expanding ourselves geography, from a geography perspective across Europe. As we continue then going forward to invest into the space of live entertainment, that's how we benefit from it.
Then longer term, as I'm trying to make that point before, I think we will be able to create a lot of touchpoints between millions of people that we reach through both now combined parts of the business, with our consumer arm of Enhanced.
Perfect. Thank you. Another question coming through. Can you talk more about your M&A strategy and who you might acquire after DEAG?
Yes, good question. We are looking to probably for 2027, do minimum one more platform acquisition, but that's still being evaluated. We have this transaction likely closing in Q1 of next year. What we would be considering is on the Enhanced side, and we have the slide in the materials as well that's going to go deeper into it, across a variety of different spaces. One is, for example, adding more sporting assets. We could look at acquiring, for example, other leagues, participatory sporting events, spaces in sports that we normally wouldn't touch upon. On the consumer side, you could think from anything from, for example, other players in the telehealth space that have capabilities that we currently do not have, but also vertically in terms of what in the value chain would we like to integrate.
One example there, for example, would be a compounding pharmacy that would allow us to produce our own drugs and distribute them. On the bolt-on side for DEAG, it would be a continued execution of that successful M&A strategy that they have executed over the past years already, expanding their reach, expanding their network, and expanding their access to artists, et cetera.
Yeah. Perfect. Thank you. A question from Susan. How many fans that utilize the DEAG platform do you think you can bring into the Enhanced ecosystem? Also, can you talk about the drivers between the two businesses that will lead to positive EBITDA next year?
Yeah. I think we will see it over time. What is very interesting about particularly the ticketing business is that you learn so much about people, right? If I, as Max, for example, go to and buy XYZ festival tickets, we learn so much about the consumer, in terms of their spending, their behavior, et cetera. Our supplements are already able to be shipped internationally. What is coming up is Enhanced OS. With Enhanced OS, we have personalized protocols for individuals. What we'd be looking to do over time, but it's really over time, is creating touchpoints with the people that we understand and their behavior and what they do, and can cross-selling to them our products.
We will see how that will pan out, but I'm very bullish on this in the long term, particularly if we consider expanding our offering on the supplement side with not just call it stacks, like Longer and Stronger, but singular products like magnesium, zinc, creatine, et cetera, as well. Lucas, can you repeat the second part of the questions? S orry. The second part of the question from Susan. Susan, I think it's our analyst from Canaccord. The second part of the question is, how do each of the businesses contribute to the EBITDA improvement of EUR 65 million from this to next year? On the sporting side, as you've seen from our quarterly financials already, we spent a lot on the sports this year intentionally to get all of that reach that I was talking about before.
We are probably going to be able, with a much reduced budget, call it $20 million for sports next year, to have equally, if not greater of an impact of it. The format of the games, we are also revisiting that. This year, for example, it was six hours long. We are condensing that to three hours. This will mean fewer athletes, fewer events, fewer prize money, fewer production costs. What we are also able to do is steer every other line item of the budget very specifically. We now have a reference point. Last year, we did it for the first time. First time someone ever hosted mini Olympics on steroids, and now we have this as a reference point that we can develop to. So for example, how much are we going to spend this year on lights versus last year, on sound versus last year?
I believe with a $20 million budget, we will be able to keep that. We had this year in top line, $30 million in sponsorship, looking to achieve that as well, if not more next year. But then we will have other revenue streams that can add on top of that. So for example, we have the agency WME, where one of the agents came to the games and called me afterwards and was like, "Max, the best sporting event I have ever been to. We need to be your exclusive representation." They are now representing us in both sponsorships and media rights. We will also look. We intentionally didn't sell our media rights in the first year because we wanted to have the exclusive ownership over it and can distribute it the way we want, but we are considering selling it for next year.
Then we will sell tickets, and we are also speaking to cities currently about economic development financing that they can contribute. That's how we believe we will be breaking even in sports next year. On the consumer side for Enhanced, at least the business is going to be breaking even by the end of the year, but we will try to keep it at break-even next year because we will constantly invest into profitable growth. This is why from an Enhanced perspective, you see the improvement to roughly break- even. On the DEAG side, the majority of the positive EBITDA contribution we expect to come from A, a growth, a big growth in the touring and concert promotion business.
That is a rather low-margin business, call it in the single mid-digits percentage space, but then a continued investment as well in spoken word and ticketing, which both operate at like 20%+ margins. This is how we see all of these individual puzzle pieces come together.
Amazing. Thank you. A question about peptides. How will recent U.S. regulatory rulings either aid Enhanced product lines or form competition?
What has happened last week is that the HHS came out with a policy that they will not pursue, or the FDA will not pursue doctors that prescribe peptides and compounding pharmacies that can produce them. It is important to note that they are not FDA- regulated per se yet. That rule-making and regulation is going to take probably 12 to 24 months. What it allows us to do, though, is massively improve the space of the peptide landscape from the gray market. I did actually see a lot of new market entrants already in that space, and I think more is going to come. The way that I think about us having a strong position in that market is specifically because of two things. One is the brand that we have built and the trust that we can convey to consumers for that through the games.
We have some of the best athletes in the world record holders, Olympic champions, et cetera, that have worked with us on enhancements and have seen the benefits in their performance as well as in their health. 85% of our customers, we surveyed them, say that trust is the most important purchasing decision when they come to us. We are not just selling a YETI bottle, but we are selling prescription drugs that people inject themselves with at home. So trust is extremely important. The second thing is, I think of whether you buy testosterone, BPC-157, et cetera, from us or one of our competitors, it is roughly the same substance. It might be differently compounded with different fillers, et cetera, but it is roughly the same substance, so it is commoditized business.
In that commoditized business, I do not want to be just selling the drug itself, but the ability to tell you what you need. For example, what happened to my enhancement protocol since the peptides got announced, or we now sell them, I am not going to get on any of those because I do not need them right now. What is most important is you should only always consider taking what you actually need and what is going to help you take a step forward. This is why for us as well, the ability to tell people and advise them on what they should be taking is much bigger of a product and a huge differentiating factor in this personalized protocol recommendations than other players in the market. That is how I believe we will be very strongly positioned for the peptide space.
Perfect. Thank you, Max. Unfortunately, that is all the time we have for today, but I just wanted to thank everyone for your time, for hopping on, and for all of your questions. Thank you.
Thanks, everyone. Have a great day.