Communisis buys shopper insight firm in its own Christmas spree
MULTI-CHANNEL marketing firm Communisis has bought a shopper marketing agency in a deal that could rise to £23.3m.
Life Marketing Consultancy will become part of the Leeds group, adding its expertise in research and insight-led shopper marketing to Communisis’s experience in customer communication.
The agency, which has 63 staff split between offices in Birmingham and London, focuses on understanding and influencing consumer behaviour whilst they shop and also taking account of retailer strategies and requirements.
Life’s clients are leading consumer goods groups especially in the food, drinks, technology and pharmaceutical sectors, and is expected to deliver EBITDA (a measure of profitability) of £1.4m in the year to December 31.
Communisis has staff based across the UK and Europe, and employs nearly 800 people in West Yorkshire. The deal will enable Communisis to extend the range of services it offers to its consumer goods clients, deliver more value to its existing leading-brand clients, and expand into higher margin areas.
Andy Blundell, chief executive of Communisis, said: “Life has an excellent reputation in shopper marketing. It brings new capability to Communisis, broadening our agency proposition and complementing the brand deployment services offered to our growing number of consumer goods clients. This acquisition will benefit our fastest growing and higher margin business segments.”
Communisis will pay £14m, made up of £700,000 in cash (matching Life’s free cash when the deal completes), a two-year bank-guaranteed promissory note of £9.3m and nearly 8m Communisis shares.
A further £9.3m – made up of £7.3m cash and £2m in Communisis shares – may be paid, subject to performance. This will be measured by adjusted EDITDA for the next two financial years to December 2016 and the contribution from defined synergies over the next three financial years.
The principal vendors, David Poole and Ian Humphris will join the Group in senior executive roles when the acquisition completes on January 5.
