£7m shares placing to fund acquisition of US-based business

Manchester-based Altitude Group has launched a proposed placing of new shares to raise £7m to pay for the acquisition of a US promotional products distributor member group.

The Middleton firm, the operator of a leading marketplace for personalised products, said it has entered into a binding asset purchase agreement for the acquisition of the membership-based trade group of independent promotional products distributors business of Advertising Industry Mastermind Group for $5m.

Altitude director Peter Hallett, Graeme Couturier, Martin Varley and Keith Edelman all intend to participate in the share placing for around £250,000 in aggregate.

The placing is being conducted through an accelerated bookbuilding process which was launched today – finnCap is acting as sole broker in connection with the placing.

AI Mastermind is the largest and fastest-growing promotional products distributor member group in the US, with 1,917 members, out of approximately 23,000 distributors across the US.

Membership numbers have grown from 1,455 as at December 31, 2017 to 1,917 as at December 31, 2018, representing a 32% increase.

Over the past five years AI Mastermind has delivered a compound annual growth rate for member numbers of 74% and for members’ revenue of 87%.

With a total estimated transaction value across the membership base of $1.7bn annually, the average transaction revenue per member equates to approximately $870,000.

Altitude’s patented technology platform for distributors, which has a supply chain already built in and combines an e-commerce trading platform with a cloud-based customer relationship management and order management system, branded as ChannlPro, can be white labelled to any specific brand and enables Altitude to generate revenue through charging transactions fees on purchase orders processed on the platform.

The first white labelled ChannlPro brand, “AIMPro”, was launched in January 2018 to meet the requirements of the members of AI Mastermind.

The Acquisition will enable Altitude to monetise the entire $1.7bn throughput revenue pipeline that exists within the AI Mastermind distributor member group, from both the distributor and supplier side.