LONDON (Alliance News) - Business events organiser Ascential PLC on Thursday announced its acquisition of Flywheel Digital LLC for an initial USD60 million in cash plus earn-out payments.
Shares in Ascential were up 9.5% at 411.60 pence on Thursday morning.
Ascential is paying the USD60 million out of its existing cash reserves. Further cash-based earn-out payments are also to be paid, based on Flywheel's revenue performance in the three years to 2021, and are likely to fall between USD47 million and USD196 million.
These payments are dependent on Flywheel's founders remaining in employment with Ascential.
The potential consideration, including both earn-out payments and the initial USD60 million, is capped at USD400 million "in the event that extremely stretching revenue levels are reached".
Flywheel, based in the US, helps consumer product companies sell on Amazon.com Inc's website. It offers Amazon-specific software to its clients to improve sales and brand performance.
In 2017, Flywheel's pretax profit was USD4.8 million with gross assets totalling USD23.9 million. Its annual revenue was one and a half times higher in 2017 than 2016.
"We have a clear focus on providing information and capabilities that enable our customers to succeed in the digital economy. The acquisition of Flywheel is in line with this strategy, further strengthening our offerings in eCommerce for brands navigating the digital market places, particularly Amazon," said Ascential Chief Executive Duncan Painter.
Ascential (ASCL)