28th Dec 2005 08:56
themutual.net plcAcquisition of iD Factor Limitedthemutual.net plc, ("TMN" or "themutual.net") the online media ownerspecialising in direct email marketing and rewarded shopping portals, ispleased to announce the acquisition of the entire issued share capital of iDFactor Limited ("IDF"), the online market research services company, for aninitial consideration of ‚£0.13 million, and deferred consideration of up to ‚£2.86 million depending on the future profitability of IDF (the "Acquisition").Highlights * Provides a solid foothold in the rapidly growing online survey market * Highly complementary with existing group data * IDF has over 200,000 members available through its panel-based databases * Strong technology platform & infrastructure for growth * IDF managing director joins TMN board * Opportunity to build further research panel from TMN's existing databases Mark Smith, CEO, said,"This is a hugely exciting acquisition which opens up opportunities in thebooming online market research sector and, fits neatly with our vision ofmaking themutual.net a one-stop service for online marketers. We're delightedto add the expertise and technology of iD Factor to our group and look forwardto applying TMN's additional resources to realize the excellent growthpotential of IDF.Combined with our recent acquisition of EDR, we feel that the TMN is now at theforefront of online direct marketing and the addition of IDF furtherstrengthens our position in a growing marketplace."The initial payment comprises ‚£30,000 in cash and ‚£100,000 through the issue ofloan notes, the deferred consideration of up to ‚£2.86 million is payable up to‚£1,033,334 by way of the issue of additional loan notes and up to ‚£1,826,666million through the issue to the vendors of new ordinary shares of 0.01p eachin TMN ("Contingent Shares") in four instalments at the prevailing share price.The number of Contingent Shares to be issued in each instalment is dependent onthe profitability of IDF for the relevant period, being the 6 months ending30th April 2006 and the years ending 30th April 2007, 2008 and 2009respectively.The loan notes to be issued to the Sellers in conjunction with the Acquisitionaccrue interest on a day-to-day basis on the notes in issue at the rate of 2%.The principal amount and accrued interest on a note can be redeemed by theholder of a note not earlier than one year and not later than three years fromthe date of issue of the relevant note.Jon Gumbrell has been appointed to the Board of TMN effective from Completion.Further information regarding Jon Gumbrell and his service agreement isincluded below.Commenting on the deal, Jon Gumbrell said:"Combining iD Factor's four years of expertise and leading edge development inonline survey technology and research applications with the vast data resourcesof themutual.net will enable the group to focus on being a major player in thegrowing online marketing sector."For the year ended 31 March 2005, IDF reported net revenues of ‚£0.75 millionand profit before tax of ‚£49,000. For the 8 month period ended 30 November2005, unaudited management accounts showed net revenue of ‚£0.60 million and aloss of ‚£0.15 million.iD Factor was formed in 2001 to offer online survey management and fieldworkservices to the market research industry. IDF owns two panels, Home of Researchand Techtank, and, when combined with their research databases, feature inexcess of 200,000 email addresses, to which they promote surveys that IDFbuilds, hosts and monitors for its clients. The market research sector in theUK was worth ‚£1.29 billion in 2004 (BMRA), of which around 10% is estimated tobe carried out online in 2005 (eConsultancy), with the proportion of workconducted online expected to increase over the next 3-5 years to over 25% ofthe total.iD Factor will continue to operate from its offices in Richmond and also hasdevelopment facilities in Sri Lanka, adding further scope to the resources ofthe enlarged group. iD Factor has spent the last eight months gearing up forgrowth, investing in high quality personnel and structuring the operations andsales teams to meet the anticipated growth.The enlarged group intends to use its combined resources to recruit and offer apanel sourced from existing databases and to assist iD Factor, through salesand technical areas, to increase its revenues.Jon Gumbrell, the founder of and largest shareholder in IDF who together withhis wife beneficially owned 100 per cent. of IDF's share capital prior to theAcquisition, has agreed to an orderly market provision in respect of anyContingent Shares issued to him for a period of at least 12 months followingthe date of issuance of each instalment, the terms of which require him to dealonly through the Company's broker.Jon Gumbrell has agreed to act as an executive director of TMN pursuant to aservice agreement which becomes effective on completion of the Acquisition.Under this service agreement, he will be required to work full time on a basicsalary of ‚£80,000 per annum. The service agreement may be terminated by eitherparty giving six months' written notice.The following information is given in respect of the appointment of JonGumbrell as a director of TMN (with effect from Completion), as required bySchedule 2 paragraph (g) of the AIM-PD Rules:Full name: Jonathan GumbrellAge: 31Current Directorships:themutual.net plcThe ID Factor LtdProgrammed Response Ltd (Dormant)Previous Directorships:Netfluentials LtdDetails of Liquidations:Voluntary liquidation of UK Campus Computing in 1999 with a deficit ofapproximately ‚£20kNo further disclosures are required in relation to Jon Gumbrell under Schedule2 paragraph (g) of the AIM rules.Contacts:themutual.net plcMark Smith, Chief ExecutiveTel: 020 7440 9310About themutual.net / Notes for Editorsthemutual.net is a publicly quoted online direct marketing company which wasfounded in 1999. It owns and manages over 6.5 million email addresses acrossvarious databases, including rewarded shopping portals, and is considered oneof the largest email specialists in the UK. TMN acquired email marketingcompany Electronic Direct Response in November 2005, further increasing itsmarket share and range of services.ENDthemutual.net PLCRelated Shares:
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