8th Aug 2006 09:10
NewMedia SPARK PLC08 August 2006 For Immediate Release 8 August 2006 NewMedia SPARK plc announces the cash sale of Mergermarket Limited, a company it backed as a start-up in 1999. NewMedia SPARK plc ("SPARK"), the investor in early stage digital informationand technology companies, is pleased to announce the conditional sale ofMergermarket Limited, ("Mergermarket"), to the Financial Times Group part ofPearson plc (LSE:PSON) at a £14.8m premium to SPARK's book value, thereby givingSPARK a return of almost 24 times its initial investment." SPARK's book value for its stake in Mergermarket was £8.0 million at 31 March2005 and £13.0m at 30 September 2005. SPARK'S expected proceeds from this saleamount to approximately £27.8m. SPARK was the first investor in mergermarket as a start-up in 1999 and hasinvested a total of £ 1.175 million, comprising £725,000 initially, £200,000 inSeptember 2000 and a further £250,000 as a participant in a follow on round in2001. SPARK intends to use the proceeds to continue investing in accordance with itsstated investment strategy and to continue its share buyback programme. SPARK'steam has been investing in early stage start -up technology businesses since1985 and in recent years has successfully exited from several early stageinvestments at significant premiums to book value such as Footfall, Pricerunnerand Elata. The transaction is expected to complete within three to four weeks onceconfirmation has been received from certain EU competition authorities that theacquisition can proceed. Tom Teichman, Chairman of SPARK and Director of mergermarket said : "This transaction reflects SPARK's core competence of picking start-up and earlystage investments created by outstanding management teams in growing markets. "Mergermarket has performed extraordinarily since its foundation and the launchof its first working product in 2000 in a very competitive but vibrant marketdominated by established major players, almost always exceeding its targets.Even in M & A downturns it has performed excellently and come up with veryattractive and innovative products. This is the type of transaction SPARK wasestablished to "spark" into life as the core of its business model. We believethe sale of the business to the Financial Times Group will provide an excellentbase from which the company can continue to grow rapidly while incorporating itsproducts and resources into and benefiting from the large Pearson financialinformation network, particularly the Financial Times Group." Caspar Hobbs, Chief Executive of Mergermarket said: "SPARK saw exactly what we were trying to do when we simply had a business planand lots of enthusiasm, they backed both. They have been great partners andshareholders, supportive and encouraging from the earliest stages of the companyand in every phase of its growth. They understand entrepreneurs because they areentrepreneurs. Their wisdom and perspective always added great value. We aredelighted to now be a member of the Financial Times Group and we are extremelyexcited about building our business with them going forward. " Hawkpoint acted as financial advisers to the shareholders of Mergermarket inrelation to its sale to Pearson Plc. Spark will be releasing its preliminary announcement of results for the yearended 31 March 2006 shortly. Management expects to value SPARK's stake inmergermarket in those results at the levels implied by the transaction announcedtoday, net of provisions for costs and SPARK management's 20% interest inportfolio profits above an annual hurdle. Taking into account trading and otherportfolio valuation changes during the period ended 31 March 2006, SPARK expectsits NAV as at 31 March 2006 to be approximately 17.7p. Enquiries: For NewMedia SPARK Thomas Teichman, Chairman 07007 333 123 Andrew Carruthers, Chief Executive Officer 020 7851 7777 Isabel Podda, Buchanan Communications 020 7466 5000 Notes to Editors: About NewMedia SPARK plc NewMedia SPARK is a quoted venture capital organisation based in central Londonfocused on early stage investments in the technology, media and telecomssectors. SPARK's portfolio has a particular emphasis on digital media, softwareapplications, technology and communications. As an investor, SPARK expects toadd significant value to its investments through active support and strategicdirection. SPARK is listed on London's Alternative Investment Market. For further information, see www.newmediaspark.com. About Mergermarket Mergermarket is a leading provider of proprietary predictive event-drivenintelligence to investment banks, hedge funds, private equity houses, wealthmanagers, restructuring specialists, law and accountancy firms and corporatesworldwide. Since its foundation in 1999, mergermarket has successfully built anunrivalled blue chip client base through the development of its complementaryportfolio of "must have", subscription-based electronic products includingmergermarket, Debtwire, dealReporter and Wealthmonitor which appeal to a broadrange of the financial services industry as well as corporate clients. Fore more information, please visit www.mergermarket.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
GHS.LPearson