Aegis Media acquires Hablar in Japan

October 31, 2012 — Fusion DigiNet

Aegis Group has acquired Hablar, a performance marketing and search agency in Japan.  Hablar, located in Tokyo, is a specialist performance marketing agency whose focus is on search marketing and digital performance media. Established in 2003, Hablar has built a fast growing business in this important sector for clients, including a long partnership with Aegis Media in Japan.

Aegis Media Japan comprises iProspect, Carat, Vizeum, SPI and Isobar.  Hablar will be merged into iProspect Japan’s existing operations, strengthening its capabilities and providing additional service for its clients.

UK, London & Japan, Tokyo

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Tarsus Group to acquire Turkish exhibition organiser CYF Fuarcılık for up to £6.2M

October 25, 2012 — Fusion DigiNet

Tarsus Group plc, the international business-to-business media group, is to acquire Turkish exhibition organiser CYF Fuarcılık A.Ş. for a maximum consideration of TL18 million (approximately £6.2 million). CYF will be acquired by IFO, a 75% owned subsidiary of Tarsus, and represents a significant bolt-on acquisition to the Group’s Turkish division.

The acquisition also completes the Group’s Project 50/13 strategy, whereby 50% of Tarsus’ revenue will be sourced from the Emerging Markets by 2013, more than a year ahead of schedule and will enable the Group to increase the pace of its future earnings growth.

The governmental approvals in respect of the completion of the acquisition of the China International Automotive Aftermarket Industry and Tuning (Guangzhou) Trade Fair (“GZ Auto”) continue to make positive progress, albeit slower than originally anticipated. Tarsus expects to complete the acquisition of GZ Auto by the end of the year.

Acquisition highlights

  • Acquisition of an initial 70% of CYFfor an initial cash consideration of approximately £1.4 million payable on completion and an estimated deferred payment of approximately £0.7 million due in 2013, for an aggregate estimated payment of approximately £2.1 million (the “Consideration”).
  • The consideration will be met from IFO’s existing cash resources.
  • CYF owns and organises two annual business-to-business exhibitions:
    • Eurasia Plant Fair (held in December), an international exhibition in Istanbul (2011: 10,800 net square metres), focusing on ornamental flowers and plants, landscape and related supply industry; and
    • Yapı Decoor (held in March), an international exhibition in Ankara (2012: 6,200 net square metres), focusing on construction material and building renewal).
  • Following the acquisitions of IFO in 2011 and Life Media in March 2012, CYF represents a significant bolt-on opportunity that adds new sectors and scale to Tarsus’ Turkish exhibition portfolio.
  • Founders Hakan Yüksel and Osman Candemir will continue to manage CYF after its acquisition.
  • Put and call options between IFO and the Vendors have been put in place in relation to the remaining 30% shareholding in CYF at various points between 2015 and 2018 and the  aggregate consideration payable for acquiring 100% of CYF is capped at TL18 million (approximately £6.2 million).
  • For the year ended 31 December 2011, CYF recorded unaudited profit before tax of approximately TL0.4 million (approximately £0.2 million). CFY’s unaudited adjusted profit before tax for the year ended 31 December 2011 was TL0.7 million (approximately £0.25 million). CYF’s unaudited gross assets as at 31 December 2011 were TL1.4 million (approximately £0.5 million).
  • The Acquisition is expected to be earnings accretive in the current financial year ending 31 December 2012 and thereafter.
  • The acquisition is expected to complete in early November 2012.

Douglas Emslie, Tarsus Group Managing Director, said:

“To reach the 50/13 strategic milestone a year early is a major achievement for the Group.  It will enable us to quicken the pace of our earnings growth earlier than expected.

“The acquisition of CYF with our partner at IFO brings additional scale to our already substantial operations in Turkey which we now aim to develop and expand both in the domestic market and the wider region.”

Exchange rate £1 = TL2.9

UK, London & Turkey, Ankara

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Aegis acquires C2 in India

August 23, 2012 — Fusion DigiNet

Aegis Group plc, the media and digital communications group,  has entered into an agreement to acquire Communicate 2 (“C2”), a performance marketing and search agency in India. C2’s gross assets as at 31 March 2012 were INR 129.9 million (£1.5) million.

C2 is a specialist performance marketing agency which focuses on search engine optimisation, search engine marketing, contextual advertising, search strategies around social media and lead generation. Originally established in 1997, C2 has built a strong client list of both local corporates, including Tata Consultancy Services, Cleartrip, ICICI Lombard and HDFC Bank, and international businesses, including Travelocity, Aviva Insurance and American Express.  C2 has offices in Mumbai, Delhi and Pune and employs over 130 employees.

C2 will be merged into iProspect India’s existing operations, strengthening its network in key cities across India and providing additional service capabilities for its clients.

UK, London &  India (Mumbai, Delhi and Pune)

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CG acquires Technology leader in Smart Grid Automation – ZIV Group

July 30, 2012 — Fusion DigiNet

Crompton Greaves Ltd (CG) has acquired 100% of ZIV for an Enterprise Value equivalent to €150 million. ZIV is a provider of digital equipment for Grid Automation and Advanced Metering Infrastructure (AMI). ZIV operates in more than 50 countries, with major operations located in Brazil (Rio de Janeiro), India (Bangalore), Spain (Madrid, Barcelona, Bilbao) and the USA (Chicago). ZIV, created in 1993, has installed more than 1.4 million IEDs for Utilities and Industries across the world.

CG is a leader in electrical transmission and distribution equipment with significant market share in the Americas, Europe, the Middle East, India and South East Asia. In previous years, CG has been expanding its activities into the systems arena, providing integrated solutions for utilities and industries. ZIV will complement CG’s offering for Grid Automation, further enhancing its differentiated offering in its core businesses.

In addition, the ZIV smart grid platform will be the basis for rapid expansion across Europe, India and the Americas.  ZIV  has  delivered  one  of  the largest  and cost-effective smart grid projects in Europe, with over 500000 connection points, providing integrated solutions, from smart metering, through two-way communication infrastructure to innovative distribution automation.

Mr Norberto Santiago Elustondo, CEO of ZIV, commented: “We feel very confident about the next phase of our relationship with CG as we know very well our colleagues as a result of the Joint Venture in India. This development will be a catalyst to grow the ZIV activities in new parts of the World Market. By this fusion with CG, together we will get the most from ZIV’s innovative technology”.

Commenting on the acquisition, Mr. Laurent Demortier, CEO & Managing Director of CG said: “We are very happy to welcome all ZIV employees into the CG family. We have been working with ZIV for some time and are impressed by not only the technology and track record in the development of Smart Grid Solutions but also by the creativity and dynamism of the entire staff. This acquisition opens a new chapter in the development of the CG Group. With the exciting growth in the Smart Grid around the World, CG is now well positioned to effectively compete in this fast growing segment.”

India, Mumbai
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Aegis Media to make a strategic investment in search firm PinZhong

July 26, 2012 — Fusion DigiNet

Aegis Group is to make a strategic investment in local Chinese search search engine marketing agency PinZhong, also known as PZoom. PZoom was  founded by Yu Cheng in 2006. Aegis Group’s investment in PZoom is RMB 24 million (£2.4 million).

Aegis Group’s digital performance marketing network, iProspect, will create a trading and development alliance with PZoom in order to bring more scale and breadth of services to existing and prospective Aegis Media clients in the digital performance marketing segment.  By formalising a partnership with PZoom, Aegis also expects to extend client opportunities to its other global network brands of Carat, Vizeum and Isobar.

Nick Waters, CEO, Aegis Media Asia Pacific said: “Building scale and competitiveness in both search and performance marketing in China is a priority for Aegis. By identifying and investing in a proven brand like PZoom we will contribute significantly to our quest for growth in this space.”

UK, London and China

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First half 2012 mergers and acquisitions trend report for Private Equity in the Information Industry

July 23, 2012 — Fusion DigiNet

Berkery Noyes has released its first half 2012 mergers and acquisitions trend report for Private Equity in the Information Industry.

The report analyses merger and acquisition activity in the private equity market for the first half of 2012 and compares it with activity in the four previous six-month periods. It features transactions made by financially sponsored acquirers within the Information Industry, including purchases made by subsidiaries or platforms of private equity firms.

Berkery Noyes’ data showed that total volume increased two percent. Vista Equity Partners and Hellman & Friedman each had seven Information Industry transactions in first half 2012, making them the most acquisitive private equity firms by volume. Total value decreased eight percent, from $18.90 billion to $17.33 billion.

M&A activity in the Health and Pharmaceutics segment rose 62 percent and reemerged as the largest vertical market segment tracked in this report. One of the most active related buyers was TPG Capital, which acquired iMDsoft, DecisionView, and PharmARC Analytic Solutions. Lifestyle and Entertainment, previously the largest market segment, leveled off by 21 percent in first half 2012. This came in the aftermath of a 46 percent improvement in second half 2011.

Private equity M&A within the Software portion of the Information Industry remained flat throughout 2011 but increased 15 percent during the last six months. Three of the top ten overall Software deals in first half 2012 were backed by private equity firms. This consisted of Turaz’s announced merger with Misys for $2 billion, Apax Partners and JMI Equity’s announced acquisition of Paradigm for $1 billion, and GTCR’s announced acquisition of CAMP Systems International for $675 million. These deals together accounted for 21 percent of financially sponsored transaction value in the Information Industry.

“Large private equity firms keen on making acquisitions are likely to continue pursuing deal opportunities in the middle and lower middle market,” stated John Shea, Managing Partner at Berkery Noyes. “There are several factors contributing to this. First, they are finding that it currently takes longer in some instances to sell their portfolio companies, which can temporarily limit the amount of capital they have available to invest elsewhere. Second, they are facing heightened competition from strategic buyers, as was demonstrated by the bidding process for Quest Software between Insight Venture Partners and Dell.”

A copy of the FIRST HALF 2012 M&A REPORT FOR PRIVATE EQUITY IN THE INFORMATION INDUSTRY is available at the Berkery Noyes website – here.

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Aegis to acquire Chinese digital agency, Catch Stone, for initial consideration of £55.2m

July 23, 2012 — Fusion DigiNet

Aegis Group plc is to acquire Beijing Catch Stone Advertising Co., Ltd and the business of Shanghai Catch Stone Culture Media Co., Ltd, an established full service digital media and marketing agency in China, for an initial consideration of RMB 550 million (£55.2 million). Catch Stone will form a separate network brand for Aegis Media in China.

Catch Stone is an established digital agency in China. Its capabilities include digital media planning and buying as well as a range of digital marketing services in areas including creative origination and social media. Catch Stone is a leading media buying agency operating across China with a particular specialism in the automotive and financial services sectors. It has a strong mix of multi-national and local clients in these sectors, including Audi, Nissan, Saic GM Wuling (SGMW), Industrial Bank and Inoherb. Catch Stone was formed in 2002 and now employs over 130 people in Beijing, Shanghai and Guangzhou.

The acquisition is subject to a four year earn-out structure, from 2013 to 2016 inclusive, with further annual consideration payments being made during this period, dependent on the level of future profit growth achieved. The total consideration for the acquisition by 2016 is expected to be around RMB 949.4 million (£95.2 million). If Catch Stone significantly outperforms current forecasts, the total consideration could be higher with a cap on the maximum amount payable of RMB 1.5 billion (£150.4 million). All consideration payments will be satisfied in cash.

The unaudited profit before tax of Catch Stone for the year ended 31 December 2011 was RMB 81 million (£8.1 million) and the value of the gross assets at that time was RMB RMB 375.9 million (£37.7 million).

The RMB: £ exchange rate used in this article is RMB 9.9724: £1.

UK, London & China, Beijing

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Pearson to acquire Author Solutions for £116M

July 19, 2012 — Fusion DigiNet

Pearson has acquired Author Solutions from Bertram Capital for $116 million in cash.

Formed in 2007, ASI is a leading provider of professional self-publishing services. It has enabled 150,000 authors to publish, market and distribute more than 190,000 books in print and electronic formats and benefits from several powerful growth trends including user-generated content, eBooks and digital publishing and marketing technologies.

Self-publishing is a rapidly growing segment of the consumer books market. According to Bowker, 211,000 titles were self-published in 2011 in either print or digital form, an increase of almost 60% on 2010. The self-publishing sector has also become an important source of talent and content for the publishing industry, producing several bestselling authors including Lisa Genova, John Locke, Darcie Chan, Amanda Hocking, Bronnie Ware and E.L. James.

The acquisition gives Penguin a leading position in this fast-growing segment of the publishing industry and brings significant opportunity for the two companies to collaborate. Penguin will gain access to ASI’s expertise in online marketing, consumer analytics, professional services and user-generated content. ASI will benefit from Penguin’s design, editorial and sales skills, and its strong international presence as it looks to expand outside the US.

Penguin’s chief executive John Makinson said: “Self-publishing has moved into the mainstream of our industry over the past three years. It has provided new outlets for professional writers, a huge increase in the range of books available to readers and an exciting source of content for publishers such as Penguin. No-one has captured this opportunity as successfully as Author Solutions, which has rapidly built a position of world leadership on a platform of outstanding customer support and tailor-made publishing services. This acquisition will allow Penguin to participate fully in perhaps the fastest-growing area of the publishing economy and gain skills in customer acquisition and data analytics that will be vital to our future.”

In 2011 Author Solutions generated revenues of approximately $100m, growing at an average annual rate of 12% over the past three years. Its business is split broadly evenly across three key areas: publishing, marketing and distribution services, with revenues generated primarily from services to authors.

The company has approximately 1,600 employees, located primarily in Bloomington, Indiana and Cebu City, the Philippines. Pearson will be expensing integration costs relating to Author Solutions in 2012 and expects the acquisition to enhance adjusted earnings per share and to generate a return on invested capital above Pearson’s weighted average cost of capital from 2013, its first full year. Author Solutions will be integrated into Penguin’s back office and technology infrastructure but will continue to be run as a separate business.

UK, London & USA, Bloomington, IN and The Philippines, Cebu City

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Berkery Noyes releases first half 2012 M&A Report for the Media and Marketing Industry

July 18, 2012 — Fusion DigiNet

Berkery Noyes, an independent mid-market investment bank, has released its first half 2012 mergers and acquisitions trend report for the Media and Marketing Industry.

The report analyzes merger and acquisition activity in the Media and Marketing Industry for the first half of 2012 and compares it with activity in the four previous six-month periods from 2010 to 2011.

Total transaction volume increased six percent during the last six months, from 784 transactions in second half 2011 to 834 in first half 2012. Meanwhile, total transaction value increased 27 percent, from $24.88 billion to $31.51 billion. Despite this uptick, median enterprise multiples in the industry decreased. The median revenue multiple fell from 1.8x to 1.2x and the median EBITDA multiple declined from 10.0x to 7.8x. However, three segments had median revenue multiples of at least 2.0x: B2B Publishing, Broadcasting, and Exhibitions, Conferences, and Seminars.

Marketing was the most active industry segment for first half 2012, accounting for 262 transactions and surpassing Internet Media in transaction volume during the last twelve months. Although Internet Media activity declined two percent compared to second half 2011, it remained 19 percent above its second half 2010 levels. In the Marketing segment, 47 percent of deals were Digital Marketing transactions, which represented a 10 percent improvement on a half-to-half year basis. WPP Group was the largest acquirer in the Digital Marketing sub-segment as well as the overall Media and Marketing Industry.

The segment with the largest rise in volume in first half 2012 was Exhibitions, Conferences, and Seminars with an 85 percent increase. The median revenue multiple in the segment also increased 26 percent relative to first half 2011, from 1.9x to 2.4x.

Consumer Publishing M&A rose 13 percent, improving for the third consecutive half year period. The segment was led in first half 2012 by Berkshire Hathaway’s acquisitions of Waco Tribune Herald, The Bryan College Station Eagle, and 63 daily newspapers from Media General. In addition, the B2B segment was responsible for three of the top nine deals by value and underwent a 10 percent increase in transaction volume.

M&A volume in the Entertainment segment increased for the fourth straight half year, growing 24 percent in first half 2012. The largest related transaction in first half 2012 was Lionsgate’s acquisition of Summit Entertainment for $700 million. Video games, a sub-classification of Entertainment, rose 30 percent in first half 2012 and accounted for 62 percent of the segment’s deals. There was also a 50 percent increase in social gaming transactions during the last six months. The most notable social gaming deal by value was GREE International’s announced acquisition of Funzio, a mobile game developer, for $210 million.

“As we predicted in the press release for our first quarter report, there has been an impressive increase in M&A pertaining to social gaming,” said Evan Klein, Managing Director at Berkery Noyes. “Of the many possible means of monetizing social games, enticing users to purchase virtual currency and other rewards continues to be the most lucrative model for generating revenue.”

A copy of the FIRST HALF 2012 MEDIA AND MARKETING INDUSTRY M&A REPORT is available here.

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CRISIL acquires Coalition Development

July 10, 2012 — Fusion DigiNet

The McGraw-Hill Companies, Inc., a division of Standard & Poor’s has acquired Coalition Development, a privately-held U.K. analytics company, and its subsidiaries. Coalition provides high-end analytics to leading global investment banks and other financial services firms. Coalition will be part of CRISIL’s Global Research & Analytics business.

“This acquisition reflects our commitment to helping customers succeed in the knowledge economy and also our strategic focus on high-growth businesses,” said Harold McGraw III, Chairman, President and Chief Executive Officer of McGraw-Hill. “CRISIL is a leading provider of research and analytics services to the world’s top financial institutions and corporations. The acquisition of Coalition will expand CRISIL’s presence in the fast-growing high-end analytical space to reach more global customers and markets. CRISIL already operates in research centers located in Argentina, China, India and Poland.”

Coalition provides high-end analytics, mainly to leading global investment banks. The company was founded in 2002 and is headquartered in the U.K. Coalition deploys unique proprietary analytics and algorithms covering market size, revenue dynamics and human capital. Coalition’s analytics provide a clear, actionable picture of the markets and are used by boards, strategy teams and top management at leading investment banks.

Coalition Development Limited were advised by Osborne Clarke. Mike Turner led the transaction assisted by Thomas Colmer and Mathias Loertscher and Prashant Mara and Ranjini Ghose of OC’s India desk.  Sheppard Mullin Richter & Hampton LLP, led by Linda Giunta Michaelson, provided US assistance.

UK, London and India, Mumbai

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