AGS11 Jul 2011 20:14
Acquisition strengthens Aegis Media's market position in the UK -
Aegis Group plc ("Aegis"), the marketing communications and market research group, today announces that it has acquired an initial 75% of the share capital of MediaVest (Manchester) Ltd., the UK-based media planning and buying agency. The remaining 25% of the share capital of MediaVest (Manchester) Ltd. is subject to a put and call option arrangement exercisable from 2016.
MediaVest (Manchester) Ltd. is a leading, independent media communications agency with expertise in media planning and buying and enhanced capability in performance marketing and digital solutions. MediaVest (Manchester) Ltd.'s clients nationwide include Holland and Barrett, JD Williams, Barratt Developments and Thomas Cook and it operates from offices in Manchester, Leeds, Newcastle and Edinburgh. MediaVest (Manchester) Ltd. will become part of Aegis Media's Carat and iProspect networks and will immediately operate under the Carat and iProspect brand names. The acquisition will be earnings accretive for Aegis and is expected to enhance the return on invested capital in its first full year in the Aegis Group.
The total consideration for 100% of the share capital of MediaVest (Manchester) Ltd. will be up to a maximum of £95 million, subject to satisfaction of earn-out criteria based on profits over the period of 2011 to 2016. An initial amount of £27 million was paid on completion and this payment includes consideration for the value of certain tangible assets, comprised mostly of working capital. All consideration payments will be satisfied in cash.
The vendors included Andy Jeal and Dave Lucas, who owned approximately 77% of MediaVest (Manchester) Ltd., together with other employee minority shareholders. Andy Jeal and Dave Lucas, the existing and future Managing Partners of MediaVest (Manchester) Ltd., earlier re-acquired 19.9% of the share capital of MediaVest (Manchester) Ltd. from Starcom MediaVest Group UK (SMG), and relinquished their license to the MediaVest name. SMG had been shareholders in MediaVest (Manchester) Ltd. since 1995. The transaction has no impact on SMG's UK business, MediaVest UK, which is based in London.
The unaudited profit before tax of MediaVest (Manchester) Ltd. for the year ended 28 February 2011 was £7.4 million and the value of the gross assets at that time was £49.6million.