Jaywing Regulatory News (JWNG)

26 Jan 2007 07:01

Digital Marketing Group PLC26 January 2007 26 January 2007 Digital Marketing Group plc Acquisition of two companies for £24m creates leading UK digital direct marketing platform Digital Marketing Group plc ("DMG" or the "Group") today announces theacquisition of 100% of the share capital of two leading UK companies, CheezeLimited ("Cheeze") and Alphanumeric Group (trading as "Jaywing"), for a totalinitial consideration of £24m, comprising cash and shares. The acquiredcompanies' management teams will continue to develop the businesses within theGroup with further consideration shares and performance options in the groupdependent upon future growth. These cornerstone acquisitions follow on from theGroup's listing on AIM and acquisitions of HSM Ltd and Scope Creative Marketing(trading as "Dig for Fire") in October 2006. Acquisitions Highlights * Acquisition of strong, profitable, and fast-growing companies in digital direct marketing, with blue chip clients * Group delivering on "buy and build" acquisition strategy ahead of schedule * Integrated digital direct marketing offering positions DMG well to capitalise on current and future market opportunities * Strong platform for organic growth with significant cross selling and new business opportunities, and potential for further platform-enhancing acquisitions Cheeze Cheeze is a leading digital media planning and buying agency founded byKatherine Jerman and Jamie Riddell in 1999. The company is based in Ipswich,with offices in London and Leeds. In addition to its core services of planning and buying for digital mediacampaigns, Cheeze also offers search engine marketing, customer relationshipmarketing ("CRM"), Web 2.0 services and digital direct marketing consulting.Prior to its acquisition by DMG, Cheeze has already worked successfully with HSMand Dig for Fire. Cheeze has grown rapidly into a profitable business and its unaudited financialsfor the year ended 31 December 2006 show turnover of £10.5m (up 64% on audited2005 turnover of £6.4m), profit before tax of £768,000 (up 72% on audited 2005profit before tax of £446,000) and net assets of £950,000 (up 71% on audited2005 net assets of £554,000). 100% of the share capital of Cheeze has been acquired for a total initialconsideration of £9.5m, comprising £6m in cash and 6,140,351 shares in DMG. Inaddition, Cheeze will receive a maximum of a further 1,754,386 contingentconsideration shares in DMG vesting in March 2008, subject to businessperformance. The acquisition was based on a cash free debt free position atcompletion. Jaywing Jaywing is a leading independent provider of marketing, credit and fraudconsultancy services, specializing in data interrogation and analysis and thedesigning of data-driven marketing initiatives. Jaywing is also pioneering thedevelopment of proprietary data-based marketing products and software for use indigital media channels such as "Digital Brain" and "Smartdecisions". The Company was set up in 1999 by Martin Boddy and Andy Gardner, and has officesin Derby, Harrow, Wakefield and Witney. Jaywing has grown to achieve an annualaudited turnover for the year ended 31 March 2006 of £10.8m (up 98% on 2005),with EBIT of £1.3m (up 143% on 2005) and net assets of approximately £1.1m (up167% on 2005). 100% of the share capital of Jaywing has been acquired for a total initialconsideration of £14.5m, comprising £8.6m in cash and 9,833,333 shares in DMG.The acquisition was based on a cash free debt free position at completion. An application has been made by DMG for admission of the 15,973,684 initialconsideration shares, which is expected to become effective today. The totalnumber of 50p ordinary shares in the Company with voting rights is 50,126,437.This figure may be used by shareholders as the denominator for the calculationsby which they will determine if they are required to notify their interest in,or a change to their interest in, the Company under the FSA's Disclosure andTransparency Rules. Ben Langdon, Chief Executive of Digital Marketing Group, commented:"We are delighted to welcome two such high quality and fast growing businessesas Jaywing and Cheeze into Digital Marketing Group. With these acquisitions, wehave expanded our integrated digital marketing platform quicker than forecast.We are now able to offer digital marketing, digital media, direct marketing anddata services within a highly focused, specialist Group, and will proactivelybuild on the enormous cross-selling opportunities this offers. We will alsoconsider opportunities to acquire businesses that further enhance our offering,either in web design and build, mobile, b2b or digital media & entertainment. Weare determined to leverage our skills to become the pre-eminent digital directmarketing group in the UK and we now have the core businesses to make thishappen." Enquiries:Digital Marketing Group Tel: 01491 615 306Ben Langdon, Chief Executive Smithfield Consultants Tel: 020 7360 4900Noemie de Andia / Libby Young Further information:Digital Marketing Group (DIGI.L) floated on AIM on 26 October 2006 andsimultaneously completed the acquisitions of two agencies specializing in onlineand offline direct marketing; HSM Limited (including "Inbox Digital" and "HSMTelemarketing") and Scope Creative Marketing Limited (trading as "Dig ForFire"). The Company intends to continue to grow organically and by acquiringbusinesses with complementary skills in digital direct marketing. As of 25January 2007, the Company was capitalised at £21.4 million. DMG provides its clients and the clients of each of the acquired businesses witha range of digital direct marketing services, coupled with database marketingskills. By doing this, DMG is able to offer clients the ability to coordinateboth their ''online'' and ''offline'' direct marketing strategies andconcurrently offer the skills necessary to input, collect, analyse and applycustomer data in order to generate more effective digital direct marketing,higher brand-consumer loyalty and improved client profitability. For more information please visit: www.digitalmarketinggroup.co.uk This information is provided by RNS The company news service from the London Stock Exchange