Online sportswear retailer, SurfStitch, will acquire production companies Garage Entertainment and TMG, known collectively as Garage Entertainment and Production, for $15 million.

Garage Entertainment and Production produces and digitally distributes premium action and extreme sports films and TV content. It has a library of more than 3000 titles which it distributes through its subscription video on demand (SVOD) platform and dedicated TV channels.

The deal is part of SufStitch’s strategy to become a global leader in action sports and youth lifestyle, by connecting with its target demographic via digital media.

In a statement to the market, Surfstitch said Garage Entertainment is a highly scalable business with extensive distribution channels.

“Garage Entertainment and Production both accelerates and increases SurfStitch Group’s exposure in the strategically important content production and digital video on demand world,” the company said.

Located in Sydney, Garage Entertainment was founded in 2009 and created the documentary Bra Boys and the TV series The Crew. The founders, Nick Cook and Mick Lawrence, will remain with the Surfstitch Group overseeing long form content production for the group.

“Our demographic spends 1.2 hours daily on online TV, second only to social networking,” said CEO, Justin Cameron.

“Statistics show that the mass market engages through TV (pay and free to air), digital subscription and apps. And we are not alone in recognising this trend. Netflix is a significant contributor to network audience projection decline. Amazon Prime has made significant investment in original content to bolster the popularity of Amazon Prime membership. We have a head start in this arena today – we have significant short form content capabilities, a community of engaged users and marry content alongside it.”

Realising the significant potential benefits of capturing customers through content-rich media engagement and linking with them all the way through to purchase, in FY15 SurfStitch Group made important steps towards building a foundation that can support the vision by acquiring content businesses Stab and Magicseaweed.

Earlier this week, SurfStitch forecast double digit sales growth for the 2016 financial year and reaffirmed guidance of underlying earnings between $15 million and $18 million.

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