29th Jan 2016 08:06
LONDON (Alliance News) - Marketing services group St Ives PLC said Friday it will buy a majority stake in The App Business Ltd as part of its plans to enhance its digital proposition, and will raise around GBP13.8 million in a placing to help fund this acquisition.
St Ives will raise GBP13.8 million through the placing of around 6.4 million shares, or a 4.8% stake in the company, at a price of 215 pence each. St Ives shares were up 1.5% to 220.00p early Friday.
It will use the proceeds to part fund the consideration for its acquisition, with the remainder to be funded through existing cash resources, its debt facilities and the issue of around 3.2 million shares to the vendors.
St Ives will buy an 82.16% stake of The App Business, a London-headquartered mobile-led consultancy business, for an initial GBP22.3 million. It plans to buy the remaining 17.84% stake in the company through an option arrangement with the vendors, between February 11 2016 and February 18 2016. Alternatively it may buy the remaining shares pursuant to a put option, which would be satisfied by around GBP3.7 million in cash and the issue of around 600,000 St Ives shares.
A further consideration of around GBP27.8 million may be payable depending on the businesses profit performance in the financial years to end-April 2016, 2017 and 2018.
St Ives expects the acquisition to add to earnings on an underlying basis in its current year.
Elsewhere, the company said that trading for its half year to end-January is expects to be in line with its expectation, with revenue expected to be 5% ahead of the previous year.
"This acquisition further strengthens St Ives' digital credentials, and, coupled with the recent acquisition of US based Solstice Mobile in 2015, significantly increases the group's mobile strategy and product development engineering capabilities," said Chief Executive Matt Armitage in a statement.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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