23rd October 2007
Acquisition of 2CV extends research capabilities. Cello Group plc (“Cello”, AIM: CLL), the market research and consulting group has acquired 2CV Limited (“2CV”), a specialist consumer market research consultancy. Initial consideration is approximately £5.4 million with further performance related consideration of up to a maximum of £5.5 million.
2CV, which was founded in 1996 by Vincent Nolan, provides market research and consultancy services to a number of major global brands. It also advises clients on product development, creative marketing communications and strategic media planning.
The initial consideration consists of approximately £5.4 million of which £3.5 million is payable in cash and loan notes, with the balance satisfied by the issue of 1,330,731 new ordinary shares. In addition, there are further performance related payments over the period to 31 December 2010. These further payments are in a mixture of loan notes and new ordinary shares at Cello’s discretion, with a minimum overall loan note consideration of approximately 50% of the further consideration.
For the year to 31 May 2007, 2CV had an audited turnover of £5.7 million, gross profit of £4.0 million and profits before tax of £0.7 million. Net assets as at 31 May 2007 were £0.7 million including cash of £0.5 million.
Application has been made to the London Stock Exchange for the new shares to be admitted to AIM and it is expected that admission will take place by 26 October 2007.
Kevin Steeds, Cello Chairman, said: “2CV has an excellent reputation within the marketing industry as a thought-leading and innovative consumer insight agency. The 2CV acquisition is consistent with our strategy of building a substantial international research & consulting group.”