DMGT annual report and M&A update

January 10, 2013 — Fusion DigiNet

DMGTDMGT has published its 2012 Annual Report and Accounts for the year ending 30th September 2012.

Scroll down the page for the DMGT M&A report

Financial Highlights

  • Revenue 2012 – £1,960 million
  • Revenue 2011 – £1,985 million
  • Adjusted operating profit 2012 – £300 million
  • Adjusted operating profit 2011 – £281 million
  • Adjusted profit before tax 2012 – £255 million
  • Adjusted profit before tax 2011 – £232 million
  • Statutory profit before tax 2012 – £206 million
  • Statutory profit before tax 2011 – £126 million
  • Adjusted earnings per share 2012 – 49.4p
  • Adjusted earnings per share 2011 – 46.1p
  • Dividend per share 2012 – 18p
  • Dividend per share 2011 – 17p

Business Highlights

  • Percentage of digital revenue 2012 – 35%
  • Percentage of digital revenue 2011 – 32%
  • Total number of employees 2012 – 11,600
  • Total number of employees 2011 – 12,000
  • Profit split by B2B and B2C 2012
    • B2B 73%
    • B2C 27%
  • Profit split by B2B and B2C 2011
    • B2B 734%
    • B2C 26%

You can see the full interactive annual report here

M&A Report

For the fourth consecutive year disposal proceeds at DMGT have exceeded acquisition costs.

DMGT made a range of disposals, acquisitions and selective investments throughout the year. They announced a series of bolt-on acquisitions at dmg::information including Intelliworks,PrepMe and SpringRock. Euromoney acquired Global Grain Geneva and Global Grain Asia (a Fusion deal) and A&N Media acquired Jobrapido.

DMGT also announced the merger of online property portal, The Digital Property Group, with Zoopla.

dmg::information also made a series of investments in the US property market through Xceligent, Real Capital Analytics and BuildFax. In total, acquisitions, including a slight increase in their shareholding in Euromoney to offset dilution from incentive plans, utilised £75 million of cash.

Following the year-end DMGT made a further bolt-on investment at Hobsons with their acquisition of the US website Beat the GMAT.

DMGT also made a number of disposals.. Disposals in the early part of the year were primarily focused in Associated (Top Consultant, motors.co.uk and Teletext) whilst in the second half of the year they announced the disposal of the remaining stake in DMG Radio Australia and the sale of dmg::event’s Evanta leadership and conference business. Total disposal proceeds amounted to £125 million.

Post year-end on 21st November, 2012 DMGT announced they had reached agreement to sell Northcliffe Media, to Local World, a newly formed media group. DMGT will receive consideration of £52.5 million in cash and a 38.7% shareholding in Local World, which will allow DMGT to benefit from the potential upside from the evolution of the regional newspaper industry.

UK, London

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Aegis Media acquires Lucidity Digital in Ireland

January 9, 2013 — Fusion DigiNet

AegisAegis Group plc, the media and digital communications group, has acquired Lucidity Digital, a web design and development agency in Ireland.

Founded in 2003, Lucidity is one of the fastest growing agencies in the Irish market, providing a wide range of creative and production lucidity2solutions for both web and mobile. The acquisition of Lucidity will allow Aegis Media clients access to a full suite of digital creative and production services and will further strengthen the Aegis Media Digital position in the Irish market. Lucidity will become part of Aegis’s digital creative origination network, Isobar, and will be re-branded Lucidity Isobar in Ireland.

Liam McDonnell, CEO of Aegis Media Ireland, said: “We are delighted to be acquiring Lucidity, which will enhance the prospects of our business in the Irish market, allowing us to offer greater integration across digital media and creative. We welcome the Lucidity team into the fold and look forward to working with our new colleagues to leverage the exciting opportunities this acquisition will bring to our business in Ireland.”

UK, London & Ireland, Dublin

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InMobi acquires Overlay Media

January 9, 2013 — Fusion DigiNet

inmobiIndependent mobile advertising network InMobi has acquired Overlay Media. Terms of the deal were not disclosed.

Overlay Media is a developer of mobile data analytics based technologies. The company’s flagship product, the Context Engine, enables intelligent on-device behaviour, wiser use of battery power and increased personalisation.

Naveen Tewari, Founder and CEO at InMobi said, “We are excited to add amazing talent to InMobi. This overlaylogoacquisition, along with Metaflow Solutions and MMTG Labs, will help us to continue to be at the forefront of delivering highly engaging content to consumers globally.”

The Overlay Media team will be based from the InMobi London EMEA HQ.

Singapore & UK, London

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DMGT has completed its disposal of Northcliffe Media to Local World

January 7, 2013 — Fusion DigiNet

Previous reporting: Local World to acquire the regional publishing assets of Northcliffe and Iliffe Posted on November 21, 2012

DMGTDMGT has completed the disposal of Northcliffe Media, its regional newspaper business, to Local World. DMGT received cash proceeds of £52.5 million and shares representing a 38.7% stake in Local World, as indicated in the 21 November, 2012 announcement.

The Iliffe family, owners of Yattendon Group, have sold Iliffe News & Media to Local World in exchange for a 21.3% shareholding in the new business and Trinity Mirror has acquired a 20% shareholding. The remaining Local World shares were purchased by other investors including Artefact Group, an Investment Fund associated with Lord Ashcroft, and Odey Asset Management.

Northcliffe Media earned operating profits of £26 million from revenues of £213 million in the 12 months to September, 2012. DMGT localworldalso incurred £10 million of exceptional operating costs in respect of Northcliffe Media during the year. Local World’s pro forma combined operating profits are £29 million on revenues of £249 million for the year to 30 September, 2012.

DMGT has agreed with the Trustees of the Pension Funds affected that £30 million of the cash proceeds from the disposal will be paid into the Pension Funds. £15 million will be paid in the current financial year, of which approximately £5 million will be paid in respect of the Section 75 Employer’s Debt which arises as a result of the employees of Northcliffe Media leaving the Pension Funds. This follows a reorganisation of the Group in 2011 under which responsibility for the majority of the liabilities was apportioned to DMG Holdings Limited. The remaining £15 million will be paid in the 2013/14 financial year.

Key terms:

  • DMGT will to sell Northcliffe Media, its regional newspaper business for £52.5m in cash and a 38.7% shareholding in Local World. For the financial year ended 30 September 2011, Northcliffe Media had gross assets of £32m and made an operating profit of £17m.
  • The Iliffe family, owners of Yattendon Group, will sell Iliffe News & Media to Local World in exchange for a 21.3% shareholding in the new business.
  • Trinity Mirror will acquire a 20% shareholding in Local World for £14.2 million.
  • The remaining Local World shares will be purchased by other investors including Artefact Group, an Investment Fund associated with Lord Ashcroft, and Odey Asset Management.
  • Steve Auckland, currently Chief Executive of Northcliffe, will become CEO of Local World. Rachel Addison, Group Finance Director of Northcliffe, will assume the same role at the new company alongside a board of directors drawn from the main shareholders. The company will be chaired by David Montgomery.

Local World will become the fourth-largest regional newspaper publisher in the UK, with more than 107 print titles and 60 websites. DMGT will contribute more than 80 titles to the new venture, with another 36 coming from Iliffe News & Media.

The Local World transaction follows the disposal in November 2012 of Associated Neswpapers’ digital assets in central and eastern Europe for cash proceeds of € 32 million (£27 million). During the year to 30 September, 2012 these businesses accounted for £1.8 million of operating profit, £0.5m of share of profits from associates and £6 million of revenues.

UK, London

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Euromoney Institutional Investor PLC acquires Californian conference business TTI/Vanguard

January 7, 2013 — Fusion DigiNet

Euromoney logoEuromoney Institutional Investor PLC, the international online information and events group, is expanding its membership events portfolio with the acquisition of TTI/Vanguard, which is headquartered in Santa Monica, California.

Euromoney paid US$8 million to acquire 87% of the equity of TTI/Vanguard. The acquisition is expected to be earnings enhancing in itsTT! Vanguard first year.  The remaining equity will be acquired in two stages of an earn-out by December 2014.

TTI/Vanguard is a private membership organisation for executives who lead technology innovation in global organisations across the public, private and academic sectors. Enterprises subscribe to TTI/Vanguard’s conference series to explore how emerging and potentially disruptive technologies may affect their organisations, policy and society. Each of TTI/Vanguard’s five annual conferences is part classroom, part think-tank and part laboratory. At the core of TTI/Vanguard is its world-class Advisory Board of visionaries and futurists who inspire and develop TTI/Vanguard’s content direction (see footnote below).

Under its Institutional Investor brand, Euromoney runs a Financial Technology Forum in the United States and has a strong record of running and successfully building subscription memberships in asset management in the US, Europe and Asia. It now expects to apply this expertise to grow TTI/Vanguard’s business globally.

Dr. Len Kleinrock, past chairman, will remain a minority shareholder in the business and will be actively involved in TTI/Vanguard until at least December 2014.

“The acquisition of TTI/Vanguard is consistent with our strategy of applying our expertise to global sectors,” said Richard Ensor, Chairman of Euromoney. “This takes us into the high-technology content sector. Euromoney has a successful record of acquiring events businesses and accelerating their growth globally, as demonstrated over the past 15 years by the success of Institutional Investor which now has 13 subscription memberships around the world. We look forward to doing the same with TTI/Vanguard.”

Dr Kleinrock said: “Having successfully built TTI/Vanguard into a must-attend membership for heads of innovation and technology across a multitude of diverse industries from government to retail, finance to pharmaceuticals, I believe that Euromoney is ideally positioned to expand the TTI/Vanguard network and membership worldwide. We are confident that Euromoney’s portfolio and expertise will add tremendous value to what we have been consistently providing our members for more than 20 years. We look forward to sharing our know-how and experience and continuing to build a world-wide TTI/Vanguard community.”

UK, London & USA, Santa Monica, CA

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UPDATE: Tribal Group acquires International Graduate Insight Group

January 5, 2013 — askhabra

tribalTribal Group has announced that it has completed its acquisition of the entire issued share capital of International Graduate Insight Group (“i-graduate”). This news comes after its announcement on the 20th December that the provider of education, learning and training services worldwide had reached an agreement with i-graduate to acquire it, with the transaction completing on schedule.

The terms of the deal stated that Tribal Group will pay an initial amount of £2.86 million on completion and up to a maximum of £7.5 million subject to satisfaction of an earn-out criteria based on earnings over the 3 year period ending 31 December 2015. The unaudited profit before tax of International Graduate Insight Group Limited for the year ended 31 March 2012 was £423k and the value of gross assets at that time was £1,799k.

i-graduate is an independent benchmarking and analytics group, working in partnership with institutions and education organisations to provide evidence-based information on education experience and outcomes across higher education, further education and schools markets.  The business works with over 1,200 education institutions in 24 countries, receiving and analysing feedback from more than 1.3 million students of over 190 nationalities.  i-graduate will join Tribal’s Services business and will strengthen the Group’s evidence-based analytics offering.

i-graduate was founded in 2005 by Will and Lindsay Archer.  Will Archer will continue to lead the i-graduate business and will head up the integration of i-graduate’s offerings with Tribal’s existing financial benchmarking and analytic capabilities.

Tribal’s Chief Executive Officer, Keith Evans, commented: “This acquisition will enable us to strengthen our capabilities in this exciting and emerging area, expands our product offering to our existing customers and provides increased access for our existing products to the i-graduate customer base, both in the UK and in our targeted international markets.” The transaction is expected to be earnings accretive.

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UK, London

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Pearson announces Investment in Nook Media

January 5, 2013 — askhabra

se_header_logo_pearsonPearson has made a strategic investment in NOOK Media LLC, a manufacturer of e-readers and tablets which also runs 674 college bookstores across America alongside its NOOK digital bookstore and content delivery platform. In the transaction, Pearson will invest $89.5 million in cash giving it a 5% equity stake. Following the transaction, Barnes & Noble will own approximately 78.2 percent of NOOK Media and Microsoft will own approximately 16.8 percent. Subject to certain conditions, Pearson will earn the option to purchase up to an additional five percent ownership in NOOK Media.

Nook Media was spun off from Barnes & Noble Inc earlier this year when it also announced a partnership with Microsoft, wherein the latter purchased a 17% stake in the new firm for $305m, which gave the firm a $1.7 billion post money valuation (source:http://techcrunch.com/2012/10/04/nook-media-officially-spins-out-of-bn-with-microsofts-help-plans-to-enter-ten-new-markets-by-next-year/). Pearson’s announcement also comes after company announced that holiday sales had declined compared to 2011 and that demand has been weaker than expected.

Will Ethridge, CEO of Pearson North America, said “Pearson and Barnes & Noble have been valued partners for decades,” and that “with this investment we have entered into a commercial agreement with NOOK Media that will allow our two companies to work closely together in […] making our content and services broadly available to students and faculty through a wide range of distribution partners.”

UK, London & USA, New York, NY

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WPP’s GroupM acquires majority stake in PLAY Communication

January 3, 2013 — Fusion DigiNet

group m_0WPP‘s wholly owned operating company, GroupM, WPP’s global media investment management arm, has acquired a majority stake in PLAY Communication Pty Ltd, a leading experiential marketing agency based in Sydney, Australia.

Founded in 2002, PLAY offers activation, sponsorship, digital and branding services. The company employs around 23 people and clients include Optus, Volkswagen, Qantas, Coty, Tourism Queensland, Charles Darwin University, ASOS and others.

PLAY’s unaudited revenues for the financial year ended 30 June 2012 were approximately A$4.1 million, with gross assets at the same date of approximately A$2.8 million.

UK, London & Sydney, Australia

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WPP acquires stake in Globant

January 3, 2013 — Fusion DigiNet

wpp-globantWPP is to acquire a 20% stake in Globant S.A. Globant provides both technical expertise and design and creative capabilities in the development of software products that can be applied to digital marketing campaigns on a global scale.

Headquartered in Buenos Aires, Globant is a rapidly growing business employing 2,700 engineers, marketing specialists and designers in 21 offices across 14 cities in Argentina, Brazil, Uruguay, Colombia, the United States and the United Kingdom. The company’s approach is unique in that it provides clients with both the infrastructure and technical support that drive digital marketing campaigns, combined with the creative and design skills usually found alone in digital agencies.

Globant’s net revenues for the year ended 31 December 2011 were US$90 million and net revenues for the six months to 30 June 2012 were US$56.9 million with total assets of US$69 million as of 30 June 2012. WPP will invest approximately $70 million in acquiring the Globant stake.

“Increasingly, clients want better coordination between their IT departments and their marketing departments, between their Chief Information Officers (CIOs) and their Chief Marketing Officers (CMOs),” said WPP Chief Executive Sir Martin Sorrell. “There are many consulting companies or digital agencies that are expert in one function or the other. Few, if any, do both and even fewer can integrate deep technical and creative capabilities on a global scale as Globant does. Partnering with Globant will allow our companies to increasingly provide our clients with insights and skills that will make their digital marketing efforts even more effective and simpler to manage at both the front and back ends.”

Globant has deep experience in working in state of the art digital marketing spaces including, but not limited to, mobile, gamification, social networks, cloud computing, big data and e-commerce. Globant’s clients include American Express, JP Morgan Chase & Co., LinkedIn, Electronic Arts, Google, Coca-Cola, National Geographic, Zynga and Sabre Holdings, as well as a number of WPP companies, such as JWT, Young & Rubicam, Grey, GroupM and Kantar.

UK, London & Argentina, Buenos Aires

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Thomson Reuters to acquire Practical Law Company

January 3, 2013 — Fusion DigiNet

Thomson Reuters LogoThomson Reuters is to acquire Practical Law Company, the London-based provider of practical legal know-how and workflow tools to law firms and corporate law departments. Practical Law Company has more than 750 employees, with principal operations in London and New York, and will be part of the Legal business of Thomson Reuters. The acquisition is expected to close in the first quarter of 2013.

Terms of the deal were not disclosed. The Telegraph reported senior industry sources speculating that Thomson Reuters is likely to have paid between £200m and £300m given PLC employs 750 people and generated pre-tax profits of £18.1m on revenues of £48.2m in the year ending April 2011.

Practical Law Company, with its wide range of expert-authored, up-to-date practical legal resources and software tools, is seen as a PLCpowerful complement to the Thomson Reuters portfolio of respected legal software and information products including Westlaw, which offers the broadest and most comprehensive collection of primary and analytical content for legal professionals.

Commenting on today’s announcement, James C. Smith, chief executive officer of Thomson Reuters, said, “Practical Law Company will uniquely position Thomson Reuters to deliver a comprehensive suite of compelling productivity solutions that marry world-class legal information, expert know-how resources and software tools to help in-house lawyers and outside counsel respond to client demands to work faster and smarter.”

“The combination of Practical Law Company and Thomson Reuters will create unique capabilities for a legal market segment that has seen significant changes over the past several years,” continued Mr. Smith. “Quality and effectiveness have always been key to successful law firms and corporate legal departments. Efficiency has become equally critical. Together, we’ll provide a full range of resources and tools to help our customers deliver the best advice quickly and efficiently, keep on top of regulatory and market developments, and better control costs.”

Practical Law Company’s unique resources, such as its practice notes, standard documents, checklists and What’s Market tools, reflect the experience and insight of the company’s team of expert attorney editors, many of whom have worked at the world’s leading law firms and corporate legal departments. Their practical know-how covers a wide variety of practice areas in the U.S. and the UK, such as commercial, corporate, employment, intellectual property, finance and litigation, among others.

Robert Dow, Practical Law Company chairman and co-founder, said that this collection of expert know-how, which is updated continuously to reflect changes in law and practice, is highly respected and valued in the legal marketplace. With more than 100,000 lawyers worldwide accessing their materials, Practical Law Company’s subscribers include 96 percent of the top 200 UK law firms and 86 percent of UK FTSE 100 corporate legal departments, as well as 80 percent of the AmLaw 200 firms and more than 700 corporate legal departments in the U.S.

“We share many values with Thomson Reuters, most notably a passion for innovation in the legal marketplace and for providing lawyers with the best possible resources so that they can spend more time adding value to clients and less time reinventing the wheel,” Mr. Dow said. “We also share a commitment to helping our customers evolve to meet changing demands. We are delighted to be joining Thomson Reuters, and firmly believe that together we can create an integrated solution that changes how lawyers practice.”

USA, New York, NY & UK, London

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