20 Aug 2009 10:32
August 20th 2009
UBC Media Group plc
("UBC" or the "Company")
UBC purchases Radio and Internet Marketing Business for cash consideration of £1.6m and further Deferred Consideration
UBC, the content and radio services business, is pleased to announce that it has completed the acquisition from Music Marketing Services Limited of the assets of Radio Lynx, a key player in the growing business of marketing through content.
Radio Lynx provides marketing solutions to clients using radio and Internet and has been particularly active in the area of video marketing on the web. In the financial year to December 31 2008, Radio Lynx posted revenues of £1,801,625 and an operating profit of £428,073; its clients include Coca Cola, Lloyds TSB, P&O Ferries and Sainsbury's.
UBC announced on 24 July 2009 that, as part of the settlement of its earn-out with Global Traffic Networks, it was being released from the restrictive covenant which had covered this area of business. UBC also at that time took back from GTN the marketing services business, IntaMedia, which operates in the same area as Radio Lynx.
UBC plans to operate the two businesses separately but will take advantages of synergies between the two and will use its increased market share to grow this sector as a whole.
The purchase is being satisfied by an initial cash consideration of £1,600,000 - a 3.7 multiple on the last full year - and a deferred cash earn out based on the operating profit generated by Radio Lynx in the 12 full months immediately following completion. The maximum earn out is £800,000 which will become payable if an operating profit of £520,000 is achieved, creating a profit multiple of 4.6 should the maximum earn-out be achieved, to be satisfied by settlement in cash within two months of the end of the 12 month period.
UBC also announces today that, further to the enabling resolution passed at the annual general meeting held on 24th July 2009, it has received the confirmation of the Court to reduce £16,104,000 of the share premium account to enable, subject to registration of the Court order, dividends or distributions to be made to shareholders in the future. Any such dividend or distribution would be subject to further review and approval of the Board at the appropriate time.
Simon Cole, Chief Executive of UBC commented:
"Within six months of the disposal of our Commercial business, we have today demonstrated progress on the strategy outlined at the time.
The acquisition of Radio Lynx significantly enhances our core business. We see the area of content related marketing activity as key to the future. The new media models evolving, both in traditional media and on the Internet, involve a much closer relationship between advertisers and content. As a company with a 20 year history of content creation, we see this as an opportunity. Radio Lynx is a company we have known and respected for many years and I am pleased to bring it and its talented team of executives into our business.
The successful Capital Restructuring, also announced today, now means that our Board has the reserves necessary to consider dividend or capital repayments."
Ends
Enquiries
Simon Cole, CEO, UBC Media Group plc Tel: 020 7453 1600
Mark Percy or Sarah Jacobs, Seymour Pierce Limited Tel: 020 7107 8000
Notes to Editors
About UBC Media Group
UBC is quoted on the London Stock Exchange's AIM market. UBC is the market leader in the supply of audio content to the radio industry in the UK. The Group is the largest independent producer of radio programming for the BBC and a provider of entertainment programming to commercial stations throughout the UK. Its software division, Unique Interactive, is a global supplier of digital radio text and data services. The company is also part of the MXR Digital Radio Multiplex consortium.
For more information, visit the Company's website at www.ubcmedia.com.
About Music Marketing Services Limited.
Music Marketing Services Ltd (MMSL) is a private limited company, founded in 1986, which has built and developed a range of businesses in music rental and radio marketing, professional audio system installations and the manufacture of digital wireless headset systems. The MMSL brand Quail Digital is a leading supplier of wireless headset systems in the quick service restaurant and supermarket sectors in the UK.
Enquiries
Tom Downes CEO, Music Marketing Services Ltd Tel: 0207 349 2018