Acquisition of BDW adds growing real estate market to sector expertise
14th March 2007
themission®, the national marketing communications and advertising group, announced today that it has acquired Bastin Day Westley Limited ("BDW"), one of the UK's leading specialist property and real estate marketing agencies. BDW provides creative, marketing, media and technical services to some of the UK's leading house building, property development and estate agency Groups.
themission® has acquired the entire issued share capital of BDW for an initial consideration of £5.98m consisting of an initial cash consideration of £4m and the issue of 1,528,014 shares in the Company issued at 129.58 pence per share, totaling £1.98m. An additional deferred cash consideration of £620,000 is payable in annual installments over the next three years. A further potential payment of up to a maximum £7.9m is due in 2010, subject to BDW meeting challenging performance criteria based on its profit before interest and tax performance over three years. This final payment is payable in cash or up to 50% in shares, at the Company's discretion. The total consideration for BDW is capped at £14.5m. The BDW shareholders will be paid additional cash consideration equal to the amount by which the acquired net assets (excluding goodwill on acquisition) at completion exceed £1.05m. The financing has been provided through a flexible funding package provided by The Royal Bank of Scotland ("RBS").
BDW audited accounts for the year ended 31 December 2006 recorded profit before interest and tax of £1.19m on turnover of £18.29m. As at 31 December 2006 BDW had audited total net assets of £2.74m. BDW will benefit from being part of themission's enlarged network and as a result, the acquisition is expected to be earnings enhancing in the first full year of ownership.
BDW was established by its CEO, Robert Day, in 1989 and currently employs 68 staff who will all join themission®. BDW provides a broad suite of specialist marketing, advertising, media, brochures, signage, exhibitions, CGI, animation, internet and photography products and services. BDW clients include St George, Bellway and Crest Nicholson. Under the Think BDW and Think Media brands, the company now operates from three locations in the South East of England, two in Colchester and an office in central London.
With the support of themission® the company is now well placed to expand its operations into other parts of the UK and offer an even wider service range. Recent work undertaken by BDW includes marketing of the development at 'The Stadium' -Arsenal's landmark residential development at Highbury, London and Bellways Park Royal development of the Guinness Brewery building.
themission®'s expertise in areas such as PR and events perfectly complement BDW's existing suite of services and may be valuable to clients who seek a consolidated marketing package. themission®'s geographical footprint covering the UK will give BDW the opportunity to provide further services to their clients who operate in areas beyond the South East.
themission® has identified a number of sectors with good growth prospects, including residential property. Consistent with this, the number of households in England is forecast to increase by more than a fifth; from 20.9 million in 2003 to 25.7 million by 2026, according to the latest projections published by John Prescott, the Deputy Prime Minister. Government forecasts show that new households are being formed at a rate of 209,000 a year, compared with projections of 189,000 in 2004 and 153,000 in 1996. The number of new households in England each year has gone up by 50,000 since the 1996 figures. These statistics confirm the Company's confidence, irrespective of price shifts or interest rates, in the long-term prospects of the residential property sector.
Iain Ferguson, Chief Executive of themission®, said:
"Residential property marketing is one of the sector winners we have identified which have strong fundamentals, significant potential for growth and offer scope for layering new services.
"BDW is one of the UK's leading property and real estate specialists and has established a reputation and proven track record of creativity and great commercial performance working with long-term, blue chip clients. These are the core strengths of all of the agencies in themission® and we believe this common focus will provide new opportunities for our enlarged Group.
"As demonstrated by the acquisition of Bray Leino, themission's strategy of growth through selective acquisitions delivers benefits to all parties and all clients. The results of our acquisition of Bray Leino in April 2006 are clearly evident and further reinforce our confidence in our strategy to build a leading national marketing communications Group."
Calder Corporate Advisory Limited advised BDW on the transaction.
Robert Day, Chief Executive of BDW, said:
"Joining with themission® provides us with the ideal platform to take BDW to its next level of growth. Leveraging the nationwide coverage and complementary service range of the agencies already within the Group, will provide us with exciting new business opportunities and places us in an even stronger position to add significant value to our existing clients' businesses."
The Company will make application for the 1,528,014 new ordinary shares to be issued to be admitted to trading on AIM, and their admission to AIM is expected to take effect on Monday 19 March 2007.
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