Share price: 127.25p


1st July 2005

Cello acquires Leapfrog Research and Planning

Cello Group plc (‘Cello’), the marketing services group which listed on AIM in November 2004, has acquired Leapfrog Research & Planning Limited (‘Leapfrog’), a leading consumer market research and planning shop, for a total maximum consideration of £6 million in cash, loan notes and new ordinary shares.

Leapfrog, which was established in 1994 by Judy Taylor and Andrea Berlowitz, acts for a number of blue chip clients including Tesco, GSK, BBC, Scottish Courage, AA, RHM and Wyeth.

The initial consideration consists of up to £3 million. £2.9 million will be paid on completion, of which £1.74 million is payable in cash and the balance satisfied by the issue of 1,007,819 new ordinary shares. In addition, there is a further payment of up to £0.1 million, payable 40% in loan notes and 60% in new ordinary shares, after 12 months and a maximum final consideration of up to a further £3 million dependent on the financial performance of Leapfrog for the period to 31 December 2009. The final consideration is payable in a mixture of loan notes and new ordinary shares at Cello’s discretion, with a maximum share element of 75%.

For the year to 30 April 2005, Leapfrog had a turnover of £3.32 million, gross profits of £2.28 million and profits before tax of £0.275 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 6 July 2005.

Kevin Steeds, Cello Chairman, said:

‘Leapfrog is an exciting addition to the Cello Group, bringing to us first class consumer market research and brand planning capabilities which are highly respected in the industry. It has a powerful synergy with Insight, our successful international healthcare research and planning business.

‘Leapfrog is the first of a number of developments which will strengthen our specialist research, brand and direct marketing platforms. We expect to announce further earnings enhancing acquisitions shortly.’


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