Conduit Hldg Regulatory News (CRE)

8 Jul 2005 07:00

Creston PLC08 July 2005 Date: 8 July 2005 On behalf of: Creston Plc (the 'Company' or 'Group') Under embargo until 0700 hours CRESTON ACQUIRES RED DOOR COMMUNICATIONS Acquisition of Red Door Communications for a maximum consideration of £13.5million Creston Plc ("Creston" or the "Group"), the diversified international marketingservices group, is pleased to announce the acquisition of specialist healthcarePR agency Red Door Communications Limited ("Red Door Communications"). Theinitial consideration is of £6.5 million, up to £0.3 million dependent on thenet assets of Red Door Communications and a further maximum deferredconsideration of up to £6.7 million dependent on the financial performance inthe period to 31 March 2009. Red Door Communications, which is based in London, is a company engaged in theprovision of public relations and medical education in the healthcare sector.The acquisition is the seventh made by Creston to date and is in line with itsstrategy of building a diversified international marketing services groupthrough a combination of organic growth and selective acquisitions. Information on Red Door Communications Red Door Communications is an independent consultancy that was established byCatherine Warne and Julia Harries in 2000 and is based in Mortlake, London. Theagency currently employs 32 personnel. Red Door Communications provides a broad range of public relations, medicaleducation programmes, marketing communications and consultancy to its clients inthe pharmaceutical industry. Current clients include: AstraZeneca UnitedKingdom, Bayer, GlaxoSmithKline, Novartis, The British Coffee Association, RocheDiagnostics and Schering Healthcare. Red Door Communications is a founder member of the Healthcare CommunicationsAgency and was seventh in the 2005 PR Week's healthcare consultancy leaguetable. It was also named as the fastest growing healthcare consultancy in 2004and has received a number of other industry awards including CommuniqueConsultancy of the Year in 2004 and SABRE European Healthcare Consultancy of theYear 2004/2005. Red Door Communications has demonstrated consistent year on year growth sinceits formation in 2000 and for the year ended 31 December 2004, Red DoorCommunications had revenues of £3.6 million and profit before taxation was £0.96million. At 31 December 2004 the gross assets of Red Door Communications were£1.76 million. Under the terms of the acquisition agreement, Red DoorCommunications will have minimum net assets on completion of £0.9 million, whichwill include a minimum of £0.7 million of cash. The maximum consideration payable is up to £13.5 million to be satisfied by: - an initial consideration of £6.5 million, to be satisfied by a payment of £4.1 million in cash and the issue of 1,595,724 new ordinary shares; - up to a further £0.3 million dependent on the net assets of Red Door Communications at completion; and - a deferred consideration of up to £6.7 million dependent on the financial performance of Red Door Communications in the period to 31 March 2009, which includes an interim deferred consideration of up to a maximum of £3.0 million payable dependent on the financial performance of Red Door Communications in the period to 31 March 2008. The maximum deferred consideration will become payable if Red Door Communications's average growth in profit before interest and taxation in the period to 31 March 2009 increases by more than 30 per cent. per annum. The initial cash consideration will be financed from Creston's existing cashresources and banking facilities. Application will be made to the UK Listing Authority for 1,595,724 new ordinaryshares of 10 pence each in the capital of Creston to be admitted to the OfficialList of the UK Listing Authority and to trading on the London Stock Exchange'smarket for listed securities. It is expected that admission will take place anddealings will commence in such new ordinary shares on 14 July 2005. Don Elgie, Chief Executive of Creston Plc said: "I am delighted to be able to announce today that Red Door Communications willbe joining Creston Plc. In a tightly competitive field, Red Door Communicationsis one of the most successful healthcare PR agencies, with an exceptional trackrecord of both client and staff retention and a high percentage of organicgrowth. We are confident that the addition of Red Door Communications to theGroup will enable even greater synergies and opportunities for growth betweenGroup agencies, and look forward to working closely with Catherine and her staffto make that happen." Catherine Warne, Managing Director of Red Door Communications commented: "In Don Elgie and Creston Plc we have found a partner who shares our ethos andpassion for our work. We are confident that joining Creston will help usachieve our full potential as a leading specialist healthcare PR agency andfurther our organic growth both in the UK and internationally, whilst allowingus to retain the unique elements that have made Red Door Communications one ofthe fastest growing and most successful agencies in our field." For further information: Creston Plc 020 7930 9757 Don Elgie Red Door Communications Limited 020 8392 8055 Catherine Warne Redleaf Communications Limited 20 7955 1410 Wendy Timmons Miranda Good Further information required under Listing Rule 10.4.1 (j) Catherine Warne, Managing Director - Red Door Communications Limited Catherine Warne founded Red Door Communications Limited in 2000 with JuliaHarries. She has over 16 years experience in healthcare communications inethical and OTC medicine, patient advocacy and issues management. Prior tofounding Red Door Communications Limited, she was Managing Director of GCIHealthcare in 1995. She has also held positions with Edelman Worldwide, LoweFusion and Shire Health Communications. Julia Harries, Director - Red Door Communications Limited Julia Harries founded Red Door Communications Limited in 2000 with CatherineWarne. Prior to founding Red Door Communications Limited she was an AssociateDirector at GCI Healthcare from 1995. She has also worked at Edelman MedicalCommunications . Publication quality photographs are available through Redleaf on the numbers shown above. Notes to Editors: • Further information on Red Door Communications is available at www.rdcomms.com About Creston Plc Creston is fully listed on the London Stock Exchange under CRE.LN. Additionalinformation is available on www.creston.com. Creston's audited results for theyear to 31 March 2005 were released on 22 June 2005, showing a 68% rise in PBTto £3.5million (2004: £2.1million) and a 25% rise in diluted EPS to 10.56 (2004:8.47). Creston's strategy is to build a diversified international marketing servicesgroup through a combination of organic growth and selective acquisitions. TheBoard's aim is to identify synergistic benefits between currently independentmarketing services companies offering premium services such as market research,direct marketing, advertising, PR and other areas of marketing communications. Since January 2001, when the Company was repositioned as a marketing servicesgroup, Creston has made six significant acquisitions, which have demonstratedgrowth despite challenging market conditions: January 2001 Acquisition of Marketing Sciences Limited, an international quantitative and qualitative market research company, based in Winchester November 2001 Acquisition of The Real Adventure Marketing Communications Limited, a national direct marketing and CRM company, based in Bath December 2002 Acquisition of EMO Group Limited, a national channel marketing communications company, based in Swindon and Bristol October 2003 Acquisition of Nelson Bostock Communications Limited, a London based public relations agency September 2004 Acquisition of CML Research Limited, a London based qualitative market research business March 2005 Acquisition of DLKW Group, a London based advertising and communications group Together these companies boast a range of blue-chip clients including LloydsBlack Horse, Unilever, Kimberly-Clark, Tesco, Toshiba, Canon, BMW (UK), MINI,Pfizer, Cow & Gate, Bacardi-Martini, Nestle Rowntree, NEC, NTL, George Wimpey,Scottish Courage, Tropicana, Vodafone, HBOS, COI, General Motors, E-Bay, W HSmith, Burger King and Financial Times. This information is provided by RNS The company news service from the London Stock Exchange