CLL.L Regulatory News (CLL)

6 Jul 2007 07:01

Cello Group plc06 July 2007 6 July 2007 Cello Group plc Cello expands financial services capability with the acquisition of cchm:ping Cello Group plc ("Cello", AIM: CLL), the market research and consulting group,has acquired a controlling interest in Hill Murray Group Limited, the holdingcompany of cchm:ping Limited ("cchm:ping"), a specialist financial servicesmarketing agency with options to acquire the balance of the shares. The totalmaximum consideration for the acquisition of 100% of Hill Murray Group Limitedis approximately £5.3 million in cash, loan notes and new ordinary shares. cchm:ping, which was established in 1997, has a number of blue chip financialservices clients including Aegon, Bristol & West Mortgages, Legal & General,Nationwide, Lloyds TSB & Scottish Life. Cello has acquired just over 76% of cchm:ping for an initial consideration ofapproximately £0.95 million of which £0.76 million is payable in cash and thebalance satisfied by the issue of 127,307 new ordinary shares. The remaining 24%is subject to put and call options exercisable in the period 2008 to 2011 withthe option prices being determined by the financial performance of cchm:pingduring the period to 31 December 2010. The option consideration is payable incash, loan notes and new ordinary shares with a minimum amount to be settled incash, loan notes varying from 80% for an option exercised in 2008 to 25% for anoption exercised in 2011. As part of the transaction Cello has also agreed to acquire a controllinginterest (60% on a fully diluted basis) in the issued share capital of thefinancial services consultancy, The Consultancy Practice Limited. The remainingminority interest is the subject of a put option whereby Cello can be requiredto purchase the 40% minority interest at any time in the period from March 2010to March 2013. The option consideration is payable in a mixture of cash, loannotes and new ordinary shares at Cello's discretion with a minimum loan noteconsideration of 25% for an option exercised before March 2011 and 35%thereafter. The maximum option consideration price is £1.75million and is basedon demanding performance related criteria. For the year to 30 September 2006, cchm:ping had an audited turnover of £8.0million, gross profits of £5.6million and delivered a loss before tax of £0.3million. Net assets as at 30 September 2006 were £0.7 million including cash of£0.6 million. Application has been made to the London Stock Exchange for the new shares to beadmitted to AIM and it is expected that admission will take place by 12 July2007. Kevin Steeds, Cello Chairman, said: "cchm:ping is a highly regarded specialist financial services marketing agencywith an excellent client base. As part of our Response division, based inLondon, it will complement our existing business and give us considerably moredepth in the financial services sector vertical." Enquiries: Cello GroupKevin Steeds, Executive Chairman 020 7812 8460 College HillAdrian Duffield/Ben Way 020 7457 2020 Notes to Editors (www.cellogroup.co.uk) Cello is a market research and consulting group that listed on AIM in November2004. The Group's strategy is to create value for shareholders by building a portfolioof research and consulting businesses capable of advising blue chip clientsglobally. Cello has annualised turnover in excess of £90million, gross profits of over £50million and employs approx 550 professional staff. This information is provided by RNS The company news service from the London Stock Exchange