Acquisition of Story provides additional direct and digital expertise plus expanded national footprint.
11th September 2007
themission®, the AIM listed national marketing communications and advertising group, announced today that it has acquired Story UK Limited ("Story"), a leading marketing agency, based in Edinburgh, specialising in award-winning direct response and digital communications.
themission® has acquired the entire issued share capital of Story for an initial consideration of £6.9m consisting of initial cash/loan notes consideration of £4.1m and a further £2.8m satisfied by the issue of 2,060,485 new ordinary shares in themission® issued at 134.675 pence per share. An additional deferred initial consideration of £0.1m cash and £0.1m in shares is also payable. The combined initial and deferred initial consideration of £7.1m is payable if the annualised EBIT for the nine months to 31 December 2007 exceeds £1.32m. This acquisition is expected to be immediately earnings enhancing on an annualised basis. A further potential payment of up to a maximum of £6.4m is due in March 2011, subject to Story meeting challenging performance criteria based on its pre-tax profit performance over the approximately three year period from completion of the acquisition to 31 December 2010. This final payment is payable in cash or up to 50% in shares, at the Company's discretion. The total consideration for Story is capped at £13.5m plus an amount by which the acquired net assets at completion exceed £0.4m.
Story was established by Dave and Sue Mullen in 2002 and currently employs some 30 staff who will all join themission®. Story is a full service direct response, digital and communications agency with its business split approximately 80% direct and digital marketing and 20% advertising. Story has an exceptional reputation for creativity and effectiveness, especially in the luxury goods and financial services sectors, working with leading international clients including Scottish and Newcastle and the Glenmorangie Company LVMH, with Kronenbourg and Ardbeg, respectively; Ulster Bank ROI and NI; M&S Money and Scottish and Southern Energy. Story is based in Leith, Edinburgh, and has an established, loyal client base, a national reputation for creativity and award winning leadership team.
Story audited accounts for the year ended 31 March 2007 recorded profit before tax (including certain non-recurring costs) of £0.6m on turnover of £4.5m, however the underlying EBIT after adjustments for non-recurring costs was £1.2m. As at 31 March 2007 Story had audited total net assets of £1.1m.
The acquisition of Story continues the successful development of themission® and its strategy of acquiring high quality, fast-growing, complementary businesses that enhance the Group's service offering and extend its geographical footprint.
With the support of themission® Story will be well placed to expand its own service offering through collaboration with other Group agencies and the additional scale provided by themission® will help underpin Story's expansion. Story also benefits from access to themission's London, Bristol and Midlands locations, as well as providing themission's clients with a strong new presence in Scotland.
Iain Ferguson, Chief Executive of themission®, said: "Story completes a wonderful hat-trick for themission® this summer. It's an impressive company that will give us additional depth and expertise and respected leaders in direct and digital marketing. Coming a few months after April-Six and thinkBDW increased our strength in the IT and property markets, this latest acquisition adds new capabilities in more, dynamic sectors - including drinks, luxury goods, financial services and utilities.
"Story is an excellent cultural fit with themission® and has a strong reputation for creativity and effectiveness. The agency boasts an award winning management team and excellent multi-disciplined know-how. As clients continue to increase their investment in direct and digital communications we believe Story's expertise in high growth sectors will add valuable expertise across our Group."
Sue Mullen, Managing Director and co-founder of Story, said: "The timing is perfect. Joining themission® provides us with the ideal partner to facilitate the next stage in our growth strategy and enables us to further develop our client offering. We've seen the benefits that other agencies have gained from becoming part of this rapidly expanding network and look forward to leveraging themission's existing geographical coverage and range of services to the benefit of both new and existing clients.
The Company will make application for the 2,060,485 new ordinary shares to be issued to be admitted to trading on AIM, and their admission to AIM is expected to take effect on Friday 14th September 2007.
Following the admission of the 2,060,485 new ordinary shares, the total number of ordinary shares in issue, and therefore, the total number of voting rights will be 28,096,896.
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