Last checked at 10 Jun 2008 07:00
10 June 2008
Adventis Group Plc
("Adventis", the "Company" or the "Group")
Acquisition
"Adventis Group plc acquires major technology marketing agency"
Adventis Group plc (ticker ATG), the AIM quoted marketing services, media buyer and advertising agency, is pleased to announce that it has acquired Second2 Limited ("Second2"), a technology marketing agency, for a total maximum consideration of GBP10.5 million.
The total consideration will be satisfied by the payment of initial consideration of GBP3.65 million, payable as to GBP2.86 million in cash; GBP0.34 million in loan notes, and GBP0.45 million by the issue of 1,698,113 new ordinary shares in Adventis ("New Ordinary Shares"). Further deferred consideration of up to GBP2.85 million will be paid evenly over the three years following the acquisition subject to the profits generated by Second2 in each year. Each deferred consideration tranche will be satisfied as to 75 per cent. in cash and the balance payable in new ordinary shares in Adventis. There is further deferred consideration of up to GBP4.0 million, which may be payable based upon the achievement of certain profit growth related criteria in each of the next five years, to be satisfied annually as to 50 per cent. in cash and the balance payable in new ordinary shares in Adventis.
Second2 has enjoyed considerable success since it was founded in 2001 by James Collis and Matt Rippon. Both of the founders, who will stay with the Company following the acquisition, have extensive experience across the technology industry, and have built a creative marketing services agency that delivers excellent customer service whilst providing a thorough understanding of the IT sector. For the eight months ended 29 February 2008. Second2 reported audited turnover of GBP2.574 million and pre-tax profit of GBP0.593 million. Net assets at that date amounted to approximately GBP0.649 million. Results for prior years were unaudited as Second2 applied a small company exemption. The acquisition will be immediately earnings enhancing for Adventis and following the acquisition, the Group's margins will be increased.
Second2's clients include Toshiba, Nortel, EMC, Hitachi, Microsoft, HTC, Trend Micro, TalkTalk, Kingston Communications, Bell Micro and Avnet. Key elements of Second2's services revolve around offering the following marketing support to its clients:
Brand communications: corporate brand identity development, including copywriting, messaging services and marketing collateral;
Lead generation: demand creation activities through direct mail, email creation, online advertising programmes, campaign microsites and prospect tracking;
Digital marketing: website design and development, campaign microsites, Flash design, email creation, broadcasting and online tracking tools;
Channel marketing: channel engagement, partner recruitment, sales incentives, product promotion and campaign co-branding activities; and
Outsourced marketing resource: provision of experienced marketeers who understand technology and channels to perform client-side marketing roles on a project or contract basis.
Adventis' strategy is to focus its marketing and media buying services on specialised sectors, to date: healthcare, financial services and property, in which it has built significant market positions. Technology is seen as a major growth area and, as a stand alone business, Second2 is capable of generating significant profits. The Board has assessed in detail several companies in this sector and Second2 is considered to be the best possible fit with the Group. As the rapid growth of technology continues and the services required in marketing computer hardware, software and telecoms, both to end-users and channels, require very specialised knowledge generating a high margin and with a high barrier to entry.
Additionally, the Board believes that Second2's skills can be used to cross-sell to clients in the Group's existing sectors, specifically healthcare. The addition of technology as a new sector will significantly bolster the digital offering of the Group as a whole. Second2's 38 staff will relocate to Adventis' offices in Beaconsfield and will work closely with Adventis Digital, Adventis Integrated and Adventis Health.
Application has been made for the admission to AIM of the New Ordinary Shares, which will rank pari passu with the Company's existing issued ordinary shares, and dealings are expected to commence on 16th June 2008.
Commenting on the acquisition of Second2, Charles Phillpot, CEO of Adventis said:,
"Some time ago we identified technology as a sector that had the same opportunities and attributes as our existing business sectors and would therefore be earnings enhancing whilst enabling us to maintain our high margins. We have conducted a thorough search of the marketplace and I am delighted that Second2 are joining Adventis due to their significant commercial success and the opportunities for cross-selling within the Group."
James Collis of Second2 said:
"We are very pleased to have found in Adventis a partner which shares our ethos, values and passion for what we do. Adventis will enable us to retain the unique elements that have made Second2 one of the most successful technology marketing agencies in the UK, and will also provide us with significant additional capabilities and resources."
END
Enquiries:
Adventis Group Plc
Charles Phillpot, CEO Tel: 020 7034 4750
Peter Linnell, Finance Director Tel: 020 7034 4795
Adventis Financial PR
Chris Steele Tel: 020 7034 4759
Tarquin Edwards Tel: 020 7034 4758
Arbuthnot Securities
Tom Griffiths Tel: 020 7012 2000
Notes to Editors
Adventis Group plc is an AIM-listed full service multimedia marketing and advertising agency to the healthcare, financial services and property industries.
Adventis's strategy is to focus its marketing and media buying services on the healthcare, financial services and property sectors, in which it has the opportunity to build significant market positions.
There are three main strands to Adventis' strategy to develop the business:
* Consolidation of its position in the healthcare, financial services, residential and commercial property markets, which are predominantly serviced by a large number of small operators;
* Diversification into other specific sectors which have a requirement for a higher level of expertise;
* Maintain/increase profit margins which are amongst the strongest in the industry.
Management intends to achieve these objectives through a mix of organic development, acquisitions and by creating structures to attract new senior people with proven revenue earning ability and appropriate sector expertise.