Communisis acquires Life Marketing Consultancy for up to £23.3M

communisisCommunication services business Communisis plc has acquired shopper marketing agency, Life Marketing Consultancy Limited.

Life’s adjusted EBITDA (on a normalised basis before non-recurring items) for the year ending 31 December 2014 is expected to be approximately £1.4 million. For the financial year ended 31 December 2013, Life generated adjusted EBITDA of £1 million on turnover of £7.0 million (£4.6 million net of recharged third-party costs). Gross assets of Life at that date were £3.6 million.

Communisis will acquire Life for an initial consideration of up to £14 million including its estimated free cash at completion of £0.7m. The initial consideration will be satisfied by the issue of a two-year, bank guaranteed promissory note of £9.3 million, £0.7 million in cash and the issue to the vendors of 7,988,015 new ordinary shares in Communisis. The new ordinary shares have a one-year restriction on sale.

Additional consideration of up to £9.3 million will be payable on the basis of Life’s future performance including its average adjusted EBITDA for the two financial years ending 31 December 2015 and 2016 and the contribution from defined synergies realised over Life’s three financial years ending 31 December 2017. The additional consideration will be satisfied in cash of up to £7.3 million and by the issue of new ordinary shares up to a value of £2.0 million.

The maximum consideration payable is £23.3 million.

Life is a research and insight-led shopper marketing agency. It’s clients are leading consumer goods groups especially in the food, drinks, technology and pharmaceutical sectors. Life has 63 permanent employees and operates from offices in Birmingham and London. The principal vendors, David Poole and Ian Humphris will join the Group in senior executive roles.

Shopper marketing focuses distinctly on understanding and influencing consumer behaviour within the shopping environment whilst also taking account of retailer strategies and requirements. It is an important component of the marketing budgets of large consumer goods brands.

Andy Blundell, Chief Executive, commented; “Life has an excellent reputation in shopper marketing. It brings new capability to Communisis, broadening our agency proposition and complementing the brand deployment services offered to our growing number of consumer goods clients. This acquisition will benefit our fastest growing and higher margin business segments.”

UK, London

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Communisis acquires The Communications Agency Limited

communisisCommunisis plc has acquired the entire share capital of The Communications Agency Limited (TCA) or £7.25m. TCA is a long-established agency that specialises in brand response and customer relationship marketing.

TCA is based in London with 42 employees, all of whom are transferring to Communisis. The Chairman, Robert Prevezer, and Chief Executive, Adam Leigh, the principal vendors, are also joining the Group in senior executive roles.

Terms of the Acquisition

Communisis has acquired TCA for £7.25m  plus the amount of TCA’s surplus cash of up to £0.75m. The consideration will be paid in cash of up to £6.55m and 2,404,643 new ordinary shares in Communisis to the value of £1.45m. Of the base consideration, up to £0.5m in cash is deferred and contingent on TCA delivering its projected adjusted EBITDA for its financial year ending 31 October 2014. The base consideration takes account of TCA’s adjusted EBITDA both for the year ended 31 October 2013 and projected for the three years ending 31 October 2016, before synergy benefits.

For the financial year ended 31 October 2013, TCA generated adjusted EBITDA of £0.45m on turnover of £6.2m (£4.0m net of recharged costs). Gross assets at that date were £1.38m.

Andy Blundell, Communisis Chief Executive, said, “TCA is a long-established, award-winning and well-respected agency that brings an impressive range of new capabilities and experience to the Group’s Design segment. It will sit at the heart of Communisis’ creative offering. The growth prospects are excellent.”

UK, London

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Communisis acquires Jacaranda Productions and Public Creative

Multi-channel marketing business Communisis plc has bought both Jacaranda Productions Limited and Public Creative Limited.

Jacaranda is a video and film production specialist, creating, managing and measuring the effectiveness of video content for global brands. It is based in London with a team of six people.

Public Creative creates and drives brand awareness with digital media using web and mobile applications to build loyalty and encourage customer advocacy. It is based in London with a team of eight people.

Terms of the Acquisitions

Jacaranda – Communisis has acquired Jacaranda for an enterprise value (on a cash free, debt free basis) of £1.5m plus surplus cash, which is estimated to be minimal. The consideration will be made as a cash payment of £0.9m and through the issue of 913,242 new ordinary shares in Communisis to the value of £0.6m. Further consideration may be payable annually in cash up to an aggregate amount of £0.5m dependent on the gross profit generated in the three years after the acquisition.

For the financial year ended 28 February 2013, Jacaranda generated adjusted EBITDA of £0.39m on turnover of £1.6m.

Public Creative – Communisis has acquired Public Creative for an enterprise value (on a cash free, debt free basis) of £0.35m in cash plus surplus cash, estimated at £0.04m.

For the financial year ended 30 April 2013, Public Creative generated adjusted EBITDA (on a normalised basis before non-recurring items) of £0.05m on turnover from continuing activities of £0.6m.

Commenting on the Acquisitions Andy Blundell, Communisis Chief Executive, said:

“Jacaranda and Public Creative bring important new skills to Communisis, in line with our strategy, as the Group continues to build its integrated service proposition. There is growing demand from clients for engaging content, especially for video and film across all digital channels, and these Acquisitions complement and enhance our existing capabilities.

We are delighted that these talented and committed teams have decided to join Communisis and look forward to working with them to offer our clients a broader range of creative services.”

UK, London

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