Reabold Resources Regulatory News (RBD)

23 May 2006 07:03

Adventis Group PLC23 May 2006 For release 07.00am 23 May 2006 Adventis Group plc Acquisitions of Roundhouse Advertising Ltd and The Coltman Media Company Ltd Introduction Adventis Group plc ("Adventis"), the full service multimedia marketing andadvertising agency, announces that it has agreed terms to acquire the entireissued share capital of both Roundhouse Advertising Ltd trading as RoundhouseHealthad ("Roundhouse"), a marketing, design and advertising agency within thehealthcare sector and Coltman Media Company Ltd ("Coltman"), a leading mediaplanning and buying agency in the financial services sector, for a total maximumconsideration, over the next three years, of £8.7 million in cash and shares. These significant acquisitions represent the continuation of the strategy setout by Adventis when going public on AIM in July 2004. Adventis' AIM placingraised £3.0 million before expenses for the company with the stated intention todiversify into a number of different, but related, business streams and build onits significant market positions in the UK property, healthcare and financialservices industries. In the healthcare sector, where Adventis has existing operations throughAffiniti (UK) Ltd, by acquiring Roundhouse, Adventis will enter the top 10 inthe UK. The acquisition of Coltman enhances its financial services offering andits already substantial media planning and buying operation. Information on Roundhouse Roundhouse has been trading successfully for ten years and has become asignificant player amongst independent healthcare agencies in the UK. Employing12 staff, Roundhouse will continue in the immediate future to operate from itsbase near Hertford, Hertfordshire. It is anticipated that the addition ofRoundhouse to the Group will generate both business synergies and economies ofscale. Roundhouse has a strong base of blue chip pharmaceutical clients whichinclude Baxter, Boehringer Ingelheim, Merial, Organon, Pfizer AH andSchering-Plough. The on-going services of Roundhouse's founding directors and management team,Kevin McGetrick, Heather Maggs, Ian Prosser and David Wyatt have beensuccessfully secured for three years. Information on Coltman Coltman has been a leading operator in the media planning and buying marketspecialising in financial services for over five years. Coltman will relocateits seven staff, currently based in Central London, to shared premises withAdgenda Media, the media planning and buying company set up by Adventis in 2005.This sharing of space will also generate both business synergies and economiesof scale as both companies have complementary skills in associated marketsectors. Coltman has a solid client base including Mellon Global Investments,Threadneedle Investments, Friends Provident, Baillie Gifford, Witan InvestmentTrusts and Proton Cars UK Ltd. The on-going services of Coltman's founding director and management team,including Steve Coltman, have been successfully secured. Terms of the acquisitions i Roundhouse Adventis is paying a base consideration of £1.6 million. This represents amultiple of 2.1 times pre-tax profit of £763,000 for the year ended 2005 whichwas a particularly strong year. There will be an additional cash payment inrespect of Roundhouse's net assets, estimated at £400,000, at completion (the"Net Asset Amount"). The turnover and pre-tax profit for Roundhouse for the yearended 31 October 2005 were £1.75 million and £763,000 respectively. If profitsmeet specific performance targets, the management of Roundhouse can earn furtherpayments over the next three years, up to a maximum total consideration of £4.8million (including the Net Asset Amount). Further details of the structure ofthe payments are included below. Managing Director of Roundhouse, Kevin McGetrick, commented: "The dynamics ofbusiness are changing. We believe this move will enable us to supply a moreintegrated offering by building up the services currently provided by Roundhouseand adding new capacity to meet the evolving needs of the healthcare industry.When we first met Adventis we were pleased by the sense of shared vision andbelieved they could become an ideal partner to move the business forward." ii Coltman Adventis is paying a base consideration of £1.5 million which represents amultiple of 6.4 times pre-tax profit of £233,000 for the year ended 2005. Therewill be an additional cash payment in respect of Coltman's net assets, estimatedat £700,000, at completion (the "Net Asset Amount"). The turnover and pre taxprofit for Coltman for the year ended 30 April 2005 were £8.9 million and£233,000 respectively. If profits meet specific performance targets, themanagement of Coltman can earn further payments over the next three years, up toa maximum total consideration of £3.9 million (including the Net Asset Amount).Further details of the structure of the payments are included below. Managing Director of Coltman Media, Steve Coltman, commented: "We are delightedto be joining forces with such a dynamic company. The Coltman Media Company'sstrengths in specialist markets will bring a new dimension to Adventis and I amconvinced that we can build together for even greater success in the future." Charles Phillpot, CEO of Adventis, stated: "These two acquisitions are animportant milestone in the growth of the Group. We have sought to expand ourexisting business in the healthcare sector and have examined many potentialpartners. Roundhouse was chosen due to their outstanding client base, level ofmanagement experience and the excellence of the service they offer. We areconfident that having Roundhouse and Affiniti in the Group will generate a largeand vibrant healthcare business that can exploit its premier market position. Similarly, the addition of Coltman Media to the Group builds up both ourfinancial services offering, currently made through AdventisNMG, and enhancesour very substantial media planning and buying business. The relocation of theColtman offices to shared space with Adgenda Media will also create asignificant player within the media industry. We are targeting further corporate activity in the current financial year to end31 December 2006." - ENDS - Enquiries: Charles Phillpot, CEOAllan Collins, Financial DirectorAdventis Group plcTel: 020 7034 4740 Tel: 020 7786 9600Annie Evangeli 07778 507 162Tarquin Edwards 07879 458 364Chris Steele 07979 604 687 John DepasqualeSeymour PierceTel: 020 7107 8010 Footnote: Roundhouse The base consideration £1,604,295 will be split in a 60:40 ratio as to cash andshares, with an initial payment of £625,675 in cash and £417,117 in shares to beissued at the average of the market price per share of Adventis in the fivebusiness days prior to completion, which took place on 22 May 2006. The balanceis phased equally as three annual payments of £112,301 in cash and £74,867 inshares. The Net Asset Amount will be satisfied by an initial cash payment of £400,000payable on completion. Following the preparation of Roundhouse's completionaccounts, any variance between this amount paid and the value attributed to theNet Asset Amount will be repayable by the vendors of Roundhouse or payable byAdventis as the case may be. The net assets of Roundhouse primarily consist ofcurrent assets. The earnout will be paid in a 55:45 ratio as to cash and shares for the firsttwo years and in a 50:50 ratio for the third year. Annual payments being basedon the audited results for each of the next three years. All share payments post completion will be allotted at the average market priceper share of Adventis for the five days prior to their issue. Adventis retainsthe right to pay any share consideration in cash at its sole discretion. Coltman The base consideration £1,500,000 will be split in a 60:40 ratio as to cash andshares, with an initial payment of £540,000 in cash and £360,000 in shares to beissued at the average of the market price per share of Adventis in the fivebusiness days prior to completion, which took place on 22 May 2006. The balanceis phased equally as three annual payments of £120,000 in cash and £80,000 inshares. The Net Asset Amount will be satisfied by a cash payment following thepreparation of Coltman's completion accounts. The net assets of Coltmanprimarily consist of current assets. The earnout will be paid at a ratio of 60:40 as to cash and shares with annualpayments based on the audited results for each of the next three years. All share payments post completion will be allotted at the average market priceper share of Adventis for the five days prior to their issue. Adventis retainsthe right to pay any share consideration in cash at its sole discretion. This information is provided by RNS The company news service from the London Stock Exchange