Acquisition & Placing

Thomson Intermedia PLC
03 August 2005

3 August 2005



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Thomson Intermedia PLC - ('Thomson Intermedia' or the 'Company')



THOMSON INTERMEDIA TO ACQUIRE BILLETTS



Thomson Intermedia, a leading provider of media intelligence, proposes to
acquire BCMG Limited ('Billetts'), a UK market leader in media and marketing
performance consulting for a maximum consideration of £13.1 million.



Consideration and funding



Consideration is payable in two parts:

•         £7.5 million initial payment - £6.7 million in cash and £0.8 million
in new shares

•         Up to a maximum of £5.6 million in earn-out consideration in loan
notes - subject to profit targets being met in the financial years ending 30
April 2006 and 30 April 2007.



The upfront cash payment of £6.7 million is being funded through existing cash
resources, a new banking facility and a Vendor Placing, by Robert W. Baird
Limited, of 2,142,858 new Ordinary Shares at a Placing Price of 210p raising
£4.5 million. The Placing Price of 210p represents a 8 per cent. premium to
yesterday's closing mid price of 195p.



Due to the high level of institutional demand for the Company's shares, Sarah
Jane Thomson and Stephen Mark Thomson (joint Chief Executives and founding
shareholders) have agreed to sell down 2,000,000 Ordinary Shares at the Placing
Price, representing 6.4 per cent. of the enlarged issued share capital, subject
to the Acquisition, thereby increasing the size of the overall placing to £8.7
million.  Following this transaction Sarah Jane Thomson and Stephen Mark Thomson
will hold 35.0 per cent. of the enlarged issued share capital.



Benefits of the acquisition



•         Considerably accelerates Thomson Intermedia's strategic aim of
becoming the leading UK provider of advertising and media transparency and
intelligence

•         Enables Thomson Intermedia to marry its data and technology with
Billetts' media consulting skills to move the enlarged Company into a unique and
powerful position in both the UK and global market place.

•         Provides enlarged Group with numerous complimentary services and
products

•         Increases the customer base and extends international reach

•         Provide significant cross selling opportunities

•         Provides a US subsidiary with significant growth opportunities

•         The acquisition will be earnings enhancing in year one



The combined ambition is to provide a complete, one-stop suite of advertising,
media and marketing accountability products (vouching, competitive monitoring,
media performance management and ROI analysis) delivered directly to the desktop
and in person by media experts.



Background on Billetts



Billetts is a UK market leader in media and marketing consulting; offering
clients means to monitor and improve the efficiency and effectiveness of their
advertising and other marketing spend.  Analysis of marketing expenditure allows
companies to better ensure appropriate returns on their investment in
advertising spend.



Sarah Jane Thomson, Joint Chief Executive Officer of Thomson Intermedia, said:



'This earnings enhancing acquisition is a major step forward in the
implementation of our strategy to provide transparency to the advertising and
media markets. Our aim is to establish our systems within all marketing
departments as a fundamental analysis tool in their quest to maximise and
monitor every pound they spend.



'Billetts is a well-established media auditing business which will accelerate
our rate of growth as the enlarged group will also have numerous cross-selling
opportunities based on a wider complementary suite of products.



'We are particularly delighted by the response from fund managers to the
acquisition and our growth strategy and are pleased to have a number of new
institutional investors supporting the Placing.'



John Billett, Chairman of Billetts, commented:



'My colleagues and I are looking forward to joining the Thomson Intermedia team
and providing a wider range of products and services for our clients.  As part
of an enlarged Group, we will have access to the necessary resources to grow the
businesses faster.'



The Acquisition is subject to shareholders approving an increase in the
Company's borrowing powers at the Extraordinary General Meeting. A notice
convening the Extraordinary General Meeting is being sent to shareholders and an
extract from this circular is included below. A copy of the circular is
available, from the Company's registered offices 1 Westmoreland Road, Bromley,
Kent, BR2 0TB.



Enquiries:

Thomson Intermedia
Sarah Jane Thomson, Chief Executive                                                020 8466 2906
David Trendle, Finance Director

Robert W. Baird
Shaun Dobson/Adrian Hadden/David Rae                                               020 7488 1212

College Hill
Adrian Duffield/Clare Warren                                                  020 7457 2815/2055


Extract from the Chairman's letter to shareholders



Proposed Acquisition of BCMG Limited and notice of Extraordinary General Meeting
to increase the Company's borrowing powers



Introduction

Your Board announced today that Thomson Intermedia proposes to acquire Billetts,
a UK market leader in media and marketing performance consulting, for a maximum
consideration of £13.1 million, consisting of consideration payable on
completion of the Acquisition of £7.5 million, of which £6.7 million will be in
cash and £0.8 million will be in Consideration Shares, and subsequent potential
earn-out payments subject to Billetts achieving certain profit targets in the
financial years ending 30 April 2006 and 30 April 2007. The Acquisition will
further the Group's strategic aim of becoming the leading UK provider of
advertising and media intelligence. Further details of the Acquisition are set
out below.



The Acquisition is to be funded through the combination of existing cash
resources, the New Banking Facility and the Vendor Placing. The New Banking
Facility is to be provided by Bank of Scotland, subject to approval by
Shareholders to an increase in the Company's borrowing powers under its Articles
of Association at the Extraordinary General Meeting to be held on Monday 22
August 2005 ('the Proposal').



Information on Billetts



Background

Billetts is a UK market leader in media and marketing consulting; offering
clients means to monitor and improve the efficiency and effectiveness of their
advertising and other marketing spend. In 2004, Billetts and the network of
overseas companies with which it works advised upon the performance of clients'
advertising expenditure representing approximately 42 per cent. of the top 500
TV advertisers' spend in the UK, as well as, three of the top ten US
advertisers.



Analysis of marketing expenditure allows companies to better ensure appropriate
returns on their investment in advertising spend. The analysis spans the
widening spectrum of communication and evaluates the optimisation of the
allocation of funds, cost effectiveness of marketing spend and internationally
accepted best practices. Billetts employs experienced consultants who provide
clients with this analysis.



Billetts operates through two core divisions; Billetts Marketing Sciences and
Billetts Media Consulting.



Billetts Marketing Sciences

Billetts Marketing Sciences operates as a traditional consultancy, offering
marketing performance

management. By optimising payback and the allocation of marketing spend across
different geographies, brands and medias, clients are better able to achieve
maximum return on investment. This division draws on advanced analytical
techniques, marketing experience, benchmarks and tools to deliver improved and
fact based marketing strategies. This division has experienced significant
growth following investment in senior staff in 2003, and the Directors believe
that this growth is likely to continue with the increasing importance of return
on investment and transparency in the marketing arena.



Billetts Media Consulting

Billetts Media Consulting works for advertisers to benchmark media prices,
quality and 'value for money' through the use of proprietary tools. Individual
media channels are tracked to note changing trends in the local trading
environment and the emergence of new media channels. Through this, comparability
can be established and areas of strength and weakness can be identified and
improved. The division boasts a strong market position, working with 46 of the
top 100 advertisers in the UK in the past twelve months. The division has
experienced rapid growth in pan-regional assignments, having built up
relationships with a network of overseas companies.



Billetts America

Billetts America is Billetts' majority owned subsidiary based in New York. The
subsidiary, which was recently incorporated, was set-up to introduce media
performance management to US advertisers, which is a relatively new concept in
the US. Billetts America has seen its services well received by clients and has
built up a revenue stream from a number of US advertisers.



The Directors believe that there is significant growth potential in Europe and
North America and Billetts' international relationships make it attractive to
global brand names, with several large, worldwide mandates having recently been
won.



Business model

Billetts' commitment to providing a first-class service to its clients has
resulted in a high retention rate and allowed them to build a large portfolio of
blue chip clients, including such brand names as American Express, Cadbury,
Canon, COI, Nissan, RHM, RBS Group, Sony, Tesco and Twentieth Century Fox.



Billetts' senior management team

Billetts' experienced management team comprises advertising, media planning,
buying and marketing professionals. The senior management will all remain with
Billetts following the Acquisition.



John Billett, Chairman

Chairman and founder of Billetts. John has over 35 years of media experience.
First, in major advertising agencies where he was media director of two top 10
UK agencies and then later as an independent planning and buying business in the
1980s. He floated CIA Group Plc, which later was renamed as Tempus Group Plc,
with Chris Ingram on the London Stock Exchange in 1989. John founded Billetts in
1995 and was awarded the prestigious title of Media Maven by Advertising Age in
the US in 2004.



David Bridges, Chief Executive, Billetts Marketing Sciences

Chief Executive of Billetts Marketing Sciences, leading the UK consumer business
team and European sales and marketing strategy practice. He has worked with a
wide range of blue-chip organisations to help them improve performance in the
sales and marketing arena. Previously, David spent six years in line marketing
and sales roles in the retail division of Shell UK Limited.



Andy Pearch, Chief Executive, Billetts Media Consulting

Chief Executive of Billetts Media Consulting. He has ultimate responsibility for
customer media service to Billetts' customer base. A founding member of
Billetts, he has been operating in the media performance management field for 10
years. Andy spent five years in media agencies, at CIA Group Plc as media group
head and as a senior TV buyer at Zenith Optimedia.



PJ Leary, Chief Operating Officer, Billetts America

Chief Operating Officer of Billetts America and has over 17 years' media
experience gained exclusively in the US. Previously Executive Vice President
with Lowe & Partners Worldwide and media director at Young & Rubicam Brands.



Rory Park, Billetts Finance Director

Qualified as a Chartered Accountant with PKF (UK) LLP in London and has over 12
years experience in the media industry with United News & Media and Billetts.



Background to and reasons for the Acquisition



As part of Thomson Intermedia's growth plans, the Directors undertook a thorough
review of the media auditing market. The review included due diligence on the
key UK media auditing businesses, including Billetts, with a view to possibly
making an acquisition. Following the review, the Directors decided that an
acquisition of a well established media auditing business would enhance Thomson
Intermedia's growth and therefore be in the interests of shareholders. The
Directors believe, for the reasons set out below, that Billetts is the most
suitable acquisition candidate:



1.   Billetts is a profitable growth business;

2.   Billetts is highly regarded in the media auditing industry;

3.   Billetts is the largest media audit company in the UK (by turnover) and has
significant international presence;

4.   Billetts brings considerable media consulting skills, an area where Thomson
Intermedia is currently under represented; and

5.   Billetts has a strong and experienced senior management team.



The Acquisition will enable Thomson Intermedia to marry its data and technology
with Billetts' media consulting skills, which, in the Directors opinion, will
move Thomson Intermedia into a unique and powerful position in both the UK and
the global market place.  The Directors believe that Thomson Intermedia's
advanced systems and data capabilities represent significant barriers to entry
for competition. This should allow Thomson Intermedia time to integrate the two
businesses and properly leverage its data and technology on the enlarged client
base. The Acquisition itself will also be immediately earnings enhancing for
Thomson Intermedia.



Billetts' historical financial performance



Set out below is an extract from Billetts' audited financial information for the
three financial years ending 30 April 2005. For illustrative purposes only, the
adjusting items relating to the Acquisition have been included to show the
underlying profitability of Billetts.


Year ended 30 April                                            2003         2004         2005

 Turnover                                                     5,718        6,393        7,636
 Administrative expenses                                    (4,818)      (5,338)      (6,603)
 Adjusted EBITDA                                                900        1,055        1,033
 Margin                                                       15.7%        16.5%        13.5%
       - Amortisation                                          (75)         (75)         (75)
       - Depreciation                                         (147)        (146)        (106)
 Adjusted EBIT                                                  678          834          852
 Margin                                                       11.9%        13.0%        11.2%
       - Interest                                              (28)         (24)         (50)
 Adjusted profit before tax                                     650          810          802
 Margin                                                       11.4%        12.7%        10.5%

       - Non-recurring fees (Note 1)                          (162)        (108)        (289)
       - Investment in new business (Note 2)                  (126)        (650)        (189)

 Audited profit before tax                                      362           52          324

 Notes:
 1     these figures include, inter alia, one off advisory fees, bonuses and non-executive
      director fees
 2     these figures include, inter alia, costs relating to the start-up of Balaia's US
      operations





Details of the Acquisition and financing arrangement



The maximum consideration for Billetts is £13.1 million comprising initial
consideration payable at completion of £7.5 million with further potential
earn-out payments of up to a maximum of £5.6 million.  The maximum consideration
is subject to a net debt/cash and working capital adjustment, which will be
finalised following the completion of the Acquisition.



The earn-out payments are based on a multiple of EBIT achieved above the target
EBIT numbers, and are subject to a cap.



The initial consideration will consist of 403,153 Consideration Shares, with a
combined value of £0.8 million and £6.7 million in cash. The cash consideration
will be funded through the Vendor Placing of £4.5 million, the New Banking
Facility together with existing cash balances of Thomson Intermedia. The
earn-out consideration will be paid in loan notes.



The Vendors have each undertaken (save in limited circumstances) not to dispose
of any Consideration Shares for a period of 18 months from Admission save for
John Billett (and trustees of his pension fund) who has undertaken (save in
limited circumstances) not to dispose of any Consideration Shares for a period
of 12 months from Admission and not more than 50 per cent. of his Consideration
Shares in the period of 12 to 24 months from Admission.



Thomson Intermedia will finance the cash consideration from existing cash
balances, a Vendor Placing and the New Banking Facility. Pursuant to the terms
of the Vendor Placing Agreement, Baird have fully underwritten the Vendor
Placing, subject to the Vendor Placing Agreement not being terminated and
becoming unconditional including, inter alia, the Sale and Purchase Agreement
becoming wholly unconditional and Admission.



Given strong institutional demand in relation to the Vendor Placing, Stephen and
Sarah-Jane Thomson have agreed to sell down 2,000,000 Ordinary Shares at the
Placing Price conditional on the Acquisition.



New Ordinary Shares



Application will be made to the London Stock Exchange for 2,546,011 New Ordinary
Shares, pursuant to the Acquisition and the Vendor Placing Agreement, to be
admitted to trading on AiM. It is expected that Admission will become effective
and dealings in the New Ordinary Shares will commence on Tuesday 23 August 2005.



Extraordinary General Meeting



Thomson Intermedia is proposing to fund part of the consideration for the
Acquisition from the New Banking Facility.  The New Banking Facility is
conditional, inter alia, on the Company sanctioning higher borrowing powers
under its Articles of Association.



The existing Articles of Association provide that without the previous sanction
of the Company in a general meeting the maximum amount which the Company (and
its subsidiaries) can borrow shall not exceed an amount equal to four times the
Adjusted Share Capital and Reserves (as defined in the Articles of Association).
Given that the Company has incurred losses until recently (which adversely
affects the calculation) this means that it is not able to borrow more than
approximately £0.5 million. Consequently, your Board is proposing the Resolution
at the Extraordinary General Meeting to sanction a change in the borrowing
powers so that the Group can borrow the greater of £12 million and an amount
equal to four times the Adjusted Share Capital and Reserves (as defined in the
Articles of Association).



Recommendation



Your Board believes that the Proposal is in the best interests of the Company
and Shareholders as a whole. Accordingly, your Board unanimously recommend that
Shareholders vote in favour of the Resolution to be proposed at the
Extraordinary General Meeting as they have irrevocably undertaken to do in
respect of their own beneficial and connected shareholdings, which amount to
14,065,114 Ordinary Shares representing approximately 48.9 per cent. of the
issued share capital of the Company.



John Napier

Chairman




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