Porta Communications plc, the AIM quoted marketing and communications group, has acquired 51% of the issued share capital of Redleaf Polhill Limited, a full service communications agency from its shareholders Emma Kane, Ian Rosenblatt and Julian Polhill. Porta has an option to acquire the remaining 49% over the following three years. The Acquisition is expected to be earnings accretive within its first full year.
Redleaf, which is based in the City of London, will become part of Porta’s Public Relations division but will continue to be run as an independent agency by its existing team and will retain the Redleaf brand.
Porta has acquired 51% of the issued share capital of Redleaf for £1,795,000. £897,500 in cash and the balance through the issue of 6,998,050 ordinary shares of 10p each in Porta of which 1,760,010 will be issued following payment of certain sums under the Acquisition Agreement. The Consideration Shares are subject to a lock-in agreement which provides for a 24 month lock-in period and a further 12 month orderly market period. The Acquisition also involves the grant of put and call options relating to the purchase by Porta of the remaining 49% of the issued shares in Redleaf which are exercisable in three tranches following the end of each of the next three full financial years of Redleaf on similar terms to the Initial Acquisition. Any additional consideration payable under the put and call options will be satisfied 50% in cash and 50% in Ordinary Shares.
Redleaf was founded in January 2000 by Emma Kane. In December 2010, Redleaf acquired Polhill, a specialist financial and professional services PR agency founded in January 1986. Today, Redleaf is a full service communications agency with specialist teams in financial PR, retail investor relations, property and private equity PR, insurance, professional and financial services PR, and professional services.
Redleaf made an operating profit of approximately £0.61 million in its financial year ended 30 November 2013. However, as a result of an exceptional write down of a related party loan, it made a loss after tax in the period of £0.29 million. At 30 November 2013, Redleaf had net liabilities of £0.2 million.
Commenting on the Acquisition, David Wright, Chief Executive of Porta, said: “Redleaf Polhill has an exceptional market reputation and is known for delivering powerful communications and investor campaigns for its clients. It brings with it a very strong leadership team and strength and depth in its employees. We are delighted to welcome the team and its strong brand to the Group.”
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