Jaywing Regulatory News (JWNG)

Jaywing plc

7 July 2016

This announcement contains inside information.

Jaywing plc

Acquisition of Massive Group Pty

Jaywing plc (AIM: JWNG) ("Jaywing" or the "Company"), a UK based agency specialising in the application of data science, is pleased to announce that it has acquired Massive Group Pty ("Digital Massive"), a search marketing agency based in Sydney, Australia.

Digital Massive specialises in search marketing, the adoption of which is growing quickly in Australia. Its clients include a broad range of companies such as Wedgwood, Waterford Crystal, Royal Doulton, Century 21 and Amber Tiles. Digital Massive has experienced strong revenue growth over the past three years with revenue growing by over 300% in this period.

Jaywing has a small search marketing team in Sydney and knows the market well. The acquisition of Digital Massive allows Jaywing to consolidate its existing client relationships and take full advantage of the rapidly growing market in Australia. In time, it will also provide the opportunity for the Company to distribute a broader set of its UK products and services. For Digital Massive, being part of Jaywing will enable it to grow more quickly by leveraging strategic and operational support from the UK. Digital Massive was founded in 2012 and its two current Directors, Chris Pittham and Tom Geekie will remain employed in the business going forward. For the 12 months ended 30 June 2016, Digital Massive generated revenue and EBITDA of AUS$ 1,643k and AUS$ 588k respectively and PAT of approximately AUS$412k.* As at 30 June 2016, Digital Massive had gross assets of AUS$ 719k.*

* Based on unaudited management accounts.

Transaction structure

Jaywing has acquired 75 per cent. of Digital Massive's issued share capital for an initial cash payment of AUS$2 million, plus an earn out consideration of up to AUS$2 million, which will be payable in three instalments over the next two years, subject to the future performance of Digital Massive. From July 2020, the Company will, via a put and call option, be in a position to acquire the remaining 25 per cent. of Digital Massive's issued share capital, at a multiple of its average audited EBITDA for the previous two financial years, subject to a maximum total consideration payable of AUS$12 million for the entire business.

The acquisition is being funded through the Company's existing cash resources. The acquisition is expected to be earnings enhancing from completion.

Commenting on the deal, Martin Boddy, said: "Our acquisition of Epiphany in the UK in 2014 has proven to be a key driver of growth for Jaywing and we are now effectively seeking to "play the same hand" but in a less developed market. Chris, Tom and their team are a great cultural fit and I'm absolutely delighted to welcome them to Jaywing.

Chris Pittham, MD at Digital Massive, added: "We're delighted to become part of Jaywing. We see many similarities between Digital Massive and Jaywing's search specialist Epiphany in terms of our business growth and direction, as well as huge attitudinal alignment with the Company as a whole. Being part of Jaywing brings opportunity for us to develop further and bring mature expertise to the Australian market."

Enquiries:Jaywing plc (www.jaywingplc.com)Michael Sprot (Company Secretary) Tel: 0114 281 1200

Cenkos Securities plc

Nicholas Wells/Ivonne Cantú (Nomad) Tel: 0207 397 8920