Close Brothers Corporate Finance advised LSE-listed Communisis plc on its acquisition strategy, screened and identified suitable targets, negotiated deal terms and structure and managed the transaction on behalf of Communisis to acquire privately held value-added data services company Ai. The transaction was announced and closed 22 December 2008
Background
• Communisis is a leading provider of print and marketing communication services, listed on the main market of the London Stock Exchange, with revenues of £300m
• Communisis recently embarked on a strategy of internal development and acquisition to add more value to its customers’ marketing business processes through providing intelligent marketing solutions
• Ai is a provider of technology and services that help customers target the most attractive prospects and build relationships with the most profitable and lowest credit risk customers. Clients include RBS, BT and Lloyds TSB. Ai is a high growth company and reported revenue CAGR of 74% from 2006 to 2008
Process
• Close Brothers Corporate Finance initially worked with Communisis to define their acquisition strategy and find suitable targets. In a search through over 350 companies in the direct marketing data sector, Close Brothers selected Ai as one of a small number of highly complementary and successful businesses
• Close Brothers Corporate Finance advised Communisis on a swiftly executed acquisition process which took approximately three months from the initial meeting with Ai, against a backdrop of extreme market volatility
• Transaction value was up to £12.6 million in cash, consisting of £4.6 million at completion and deferred consideration of up to a maximum of £8.0 million payable over two years. The acquisition is expected to be earnings accretive to Communisis in its first year
Testimonials
Steve Vaughan, CEO of Communisis, said:
“The team at Close Brothers Corporate Finance were very proactive in taking the time to understand our business strategy in detail and then leveraging their sector knowledge to screen and identify suitable targets. Having originated the opportunity, they helped us approach Ai and formulate a transaction structure that minimised our risk and provided substantial incentive for Ai’s management. Their work on this has enabled us to take a significant step forward in delivering on our strategic plan.”
Simon Willis, a Managing Director at Close Brothers Corporate Finance, commented:
“The current climate presents exceptional opportunities for corporate acquirers to strengthen their market position through M&A. The Ai transaction is an excellent example of how Close Brothers Corporate Finance can use its in-depth sector knowledge and geographic reach to help strategic purchasers with a clear strategic focus and ambition like Communisis.”
For more information regarding this transaction, please contact Simon Willis, Guy Ballantine or Ed Martin-Sperry on +44 (0)20 7655 3100.