17th Oct 2007 13:42
Motivcom PLC17 October 2007 17 October 2007 Motivcom plc ("Motivcom" or "the Company") Acquisition of Zibrant Limited and Proposed Placing of New Ordinary Shares Motivcom plc (AIM:MCM), a leading marketing services company specialising in thebusiness to employee sector providing incentive and motivation services to arange of UK and international clients, today announces that it entered into aconditional acquisition agreement on 17 October 2007 to acquire Zibrant Limitedand its subsidiaries ("Zibrant"). Zibrant is an agency which provides venue finding, event management andmotivation services for its blue chip corporate client base. Venue findingservices, which account for 60 per cent. of Zibrant's business, has seensignificant growth in recent years driven by the need for major corporates toconsolidate their venue and hotel booking activity. Venue finding services are anew and significant addition to the Motivcom portfolio of business services andare expected to provide excellent cross selling opportunities for existingMotivcom divisions. The Zibrant event management business will strengthenMotivcom's already significant position in the market sector adding considerablelive event production and communications experience to the existing structure. Motivcom will pay an initial consideration of £15,000,000 for the entire issuedshare capital of Zibrant. This will be satisfied as to £725,000 by the issue of557,693 new Motivcom ordinary shares to Zibrant vendors at 130p a share and asto £14,275,000 in cash. Zibrant vendors will immediately subscribe for 2,307,692Motivcom ordinary shares also at 130p a share so that the net cash outlay ofMotivcom is £11,275,000. Additional deferred consideration of up to £2,000,000is payable subject to Zibrant achieving specified levels of earning beforeinterest and tax in the year ending 31 December 2008. This furtherconsideration will be payable in cash within five days of Zibrant's auditedaccounts for the year ending 31 December 2008 being signed on behalf of itsdirectors. The Zibrant vendors will be subject to an orderly market agreementfor 12 months restricting disposal of all of the 2,865,385 Motivcom ordinaryshares they will hold following completion. Zibrant will continue to trade as an independent business within the Motivcomgroup, building on a well respected brand within the venue finding servicessector. Additionally, the enlarged Motivcom Group will review synergisticopportunities with the live communications and event management divisions. Themanagement vendors will remain with the Zibrant business. Christopher William John Madge, the managing director of Zibrant and a vendor,will be appointed to the Motivcom Board on completion of the acquisition. Hehas a service agreement as managing director of Zibrant on a combined salary andbenefits package of approximately £84,000. In addition, he is entitled to anannual bonus of up to 4% of the profit after interest and before tax of Zibrant.His employment is for a fixed term until 31 December 2008. Thereafter, hisemployment may be terminated on either party giving not less than 9 months'notice, notice to be given on or after 31 December 2008. Chris Madge will notreceive any additional remuneration in respect of his appointment to theMotivcom Board. To part fund the cash consideration for the acquisition Motivcom proposes toraise approximately £3,100,000 (before expenses) by way of a placing of2,384,615 new ordinary shares of Motivcom at 130p per share. The directors ofMotivcom do not expect expenses in relation to the placing, which has beenunderwritten by Numis Securities Limited, to exceed 5 per cent of the placingproceeds. A circular will be shortly sent to Motivcom shareholders, convening anExtraordinary General Meeting on 9 November 2007, to seek, amongst other things,the necessary authorities from Motivcom shareholders for the Motivcom Board toallot the 2,384,615 ordinary shares in respect of the placing and the 2,865,385ordinary shares to the vendors of Zibrant. Application will be made for the newordinary shares to be admitted to trading on AIM, which is expected to commenceon 12 November, 2007. The balance of the cash element of the consideration for the acquisition ofZibrant payable on completion will be funded by debt finance from the Company'sbankers. Zibrant reported turnover of £19,330,000 and operating profit beforeamortisation, interest and tax of £1,420,000 for the year ended 31 December2006. The comparative figures for 2005 were £17,889,000 and £1,251,000respectively. Profit before tax was £1,318,000 (2005: £1,301,000). At 31December 2006 Zibrant reported gross assets of £12,638,000 (2005: £8,664,000)and net assets of £2,152,000 (2005: £1,584,000). The consideration is based onZibrant having a minimum level of tangible net assets at completion of at least£1,700,000. At 31 December 2006 Zibrant had tangible net assets of £1,009,000.It is anticipated that Zibrant will enhance Motivcom's earnings for the yearending 31 December 2008. Commenting on the acquisition, Colin Lloyd, Chairman of Motivcom plc, said: "This acquisition represents a further and important step in our strategy,demonstrating our commitment to expand the Group rapidly by seeking selectiveopportunities for consolidation in an extremely fragmented market. Motivcom isa recognised leader in the business to employee and business to consumer sectorsand this will be strengthened by the addition of the complementary venue findingservices and by the consolidation of the Zibrant event management business. Weare delighted to have identified this opportunity for valuable strategicsynergies and we look forward to realising significant growth opportunities forZibrant going forward." For further information: Motivcom plc Sue Hocken Tel: +44 (0) 1908 608 000 [email protected] www.motivcom.com Grant Thornton UK LLP Philip Secrett/Fiona Owen Tel: +44 (0)207 383 5100 [email protected]/[email protected] www.gtuk.com Numis Securities Limited David Poutney/James Serjeant Tel: +44 (0)207 260 1000 Media enquiries: Abchurch Heather Salmond/ Georgina Bonham Tel: +44 (0) 20 7398 7700 [email protected] www.abchurch-group.com Notes to Editors: Motivcom plc is a leading marketing services company in the business to employeesector providing incentive and motivation services to blue chip UK andinternational clients. Motivcom drives performance of direct and third partyemployees using motivation and incentive techniques for human capitalmanagement. The Company also has a fast growing consumer incentives business.Motivcom's core business divisions include: motivation and incentive programmes,incentive travel and events, employee benefits and sales promotion. Motivcom'sactivities in each sub-sector help to improve staff productivity, retention,absenteeism and increase product sales respectively. The management team has been in place since 2002. It follows a strong organicand acquisitive growth strategy. Motivcom's organic growth is driven byinvestments in innovative products such as the recently launched Spree-visacard. Since 2002, the Company has acquired Fotorama, Archer Young Ltd,Summersault Ltd, The Voucher Shop and Motivation Travel Management Limited allof which have been successfully integrated into the Company. Motivcom isconstantly exploring new acquisition targets in existing and complementary areasto further strengthen the Company's position in the business to employee space. Motivcom plc is based in Milton Keynes. It listed on the AIM market of theLondon Stock Exchange in August 2004 under the name P&MM Group plc. P&MM Groupplc was re-branded Motivcom plc (AIM: MCM) in March 2006. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
MCM.L