Acquisitions
Adventis Group PLC
23 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 and
advertising agency, announces that it has agreed terms to acquire the entire
issued share capital of both Roundhouse Advertising Ltd trading as Roundhouse
Healthad ('Roundhouse'), a marketing, design and advertising agency within the
healthcare sector and Coltman Media Company Ltd ('Coltman'), a leading media
planning and buying agency in the financial services sector, for a total maximum
consideration, over the next three years, of £8.7 million in cash and shares.
These significant acquisitions represent the continuation of the strategy set
out by Adventis when going public on AIM in July 2004. Adventis' AIM placing
raised £3.0 million before expenses for the company with the stated intention to
diversify into a number of different, but related, business streams and build on
its significant market positions in the UK property, healthcare and financial
services industries.
In the healthcare sector, where Adventis has existing operations through
Affiniti (UK) Ltd, by acquiring Roundhouse, Adventis will enter the top 10 in
the UK. The acquisition of Coltman enhances its financial services offering and
its already substantial media planning and buying operation.
Information on Roundhouse
Roundhouse has been trading successfully for ten years and has become a
significant player amongst independent healthcare agencies in the UK. Employing
12 staff, Roundhouse will continue in the immediate future to operate from its
base near Hertford, Hertfordshire. It is anticipated that the addition of
Roundhouse to the Group will generate both business synergies and economies of
scale. Roundhouse has a strong base of blue chip pharmaceutical clients which
include Baxter, Boehringer Ingelheim, Merial, Organon, Pfizer AH and
Schering-Plough.
The on-going services of Roundhouse's founding directors and management team,
Kevin McGetrick, Heather Maggs, Ian Prosser and David Wyatt have been
successfully secured for three years.
Information on Coltman
Coltman has been a leading operator in the media planning and buying market
specialising in financial services for over five years. Coltman will relocate
its seven staff, currently based in Central London, to shared premises with
Adgenda Media, the media planning and buying company set up by Adventis in 2005.
This sharing of space will also generate both business synergies and economies
of scale as both companies have complementary skills in associated market
sectors. Coltman has a solid client base including Mellon Global Investments,
Threadneedle Investments, Friends Provident, Baillie Gifford, Witan Investment
Trusts 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 a
multiple of 2.1 times pre-tax profit of £763,000 for the year ended 2005 which
was a particularly strong year. There will be an additional cash payment in
respect 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 year
ended 31 October 2005 were £1.75 million and £763,000 respectively. If profits
meet specific performance targets, the management of Roundhouse can earn further
payments over the next three years, up to a maximum total consideration of £4.8
million (including the Net Asset Amount). Further details of the structure of
the payments are included below.
Managing Director of Roundhouse, Kevin McGetrick, commented: 'The dynamics of
business are changing. We believe this move will enable us to supply a more
integrated offering by building up the services currently provided by Roundhouse
and 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 and
believed 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 a
multiple of 6.4 times pre-tax profit of £233,000 for the year ended 2005. There
will be an additional cash payment in respect of Coltman's net assets, estimated
at £700,000, at completion (the 'Net Asset Amount'). The turnover and pre tax
profit for Coltman for the year ended 30 April 2005 were £8.9 million and
£233,000 respectively. If profits meet specific performance targets, the
management of Coltman can earn further payments over the next three years, up to
a 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 delighted
to be joining forces with such a dynamic company. The Coltman Media Company's
strengths in specialist markets will bring a new dimension to Adventis and I am
convinced that we can build together for even greater success in the future.'
Charles Phillpot, CEO of Adventis, stated: 'These two acquisitions are an
important milestone in the growth of the Group. We have sought to expand our
existing business in the healthcare sector and have examined many potential
partners. Roundhouse was chosen due to their outstanding client base, level of
management experience and the excellence of the service they offer. We are
confident that having Roundhouse and Affiniti in the Group will generate a large
and vibrant healthcare business that can exploit its premier market position.
Similarly, the addition of Coltman Media to the Group builds up both our
financial services offering, currently made through AdventisNMG, and enhances
our very substantial media planning and buying business. The relocation of the
Coltman offices to shared space with Adgenda Media will also create a
significant player within the media industry.
We are targeting further corporate activity in the current financial year to end
31 December 2006.'
- ENDS -
Enquiries:
Charles Phillpot, CEO
Allan Collins, Financial Director
Adventis Group plc
Tel: 020 7034 4740
Tel: 020 7786 9600
Annie Evangeli 07778 507 162
Tarquin Edwards 07879 458 364
Chris Steele 07979 604 687
John Depasquale
Seymour Pierce
Tel: 020 7107 8010
Footnote:
Roundhouse
The base consideration £1,604,295 will be split in a 60:40 ratio as to cash and
shares, with an initial payment of £625,675 in cash and £417,117 in shares to be
issued at the average of the market price per share of Adventis in the five
business days prior to completion, which took place on 22 May 2006. The balance
is phased equally as three annual payments of £112,301 in cash and £74,867 in
shares.
The Net Asset Amount will be satisfied by an initial cash payment of £400,000
payable on completion. Following the preparation of Roundhouse's completion
accounts, any variance between this amount paid and the value attributed to the
Net Asset Amount will be repayable by the vendors of Roundhouse or payable by
Adventis as the case may be. The net assets of Roundhouse primarily consist of
current assets.
The earnout will be paid in a 55:45 ratio as to cash and shares for the first
two years and in a 50:50 ratio for the third year. Annual payments being based
on the audited results for each of the next three years.
All share payments post completion will be allotted at the average market price
per share of Adventis for the five days prior to their issue. Adventis retains
the 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 and
shares, with an initial payment of £540,000 in cash and £360,000 in shares to be
issued at the average of the market price per share of Adventis in the five
business days prior to completion, which took place on 22 May 2006. The balance
is phased equally as three annual payments of £120,000 in cash and £80,000 in
shares.
The Net Asset Amount will be satisfied by a cash payment following the
preparation of Coltman's completion accounts. The net assets of Coltman
primarily consist of current assets.
The earnout will be paid at a ratio of 60:40 as to cash and shares with annual
payments based on the audited results for each of the next three years.
All share payments post completion will be allotted at the average market price
per share of Adventis for the five days prior to their issue. Adventis retains
the 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