17th September 2007
Cello extends Response capability with the acquisition of Magnetic
Cello Group plc (“Cello, AIM: CLL), the market research and consulting group has acquired 100% of the share capital of Magnetic Advertising Company Limited (“Magnetic”), a specialist direct marketing support business. The initial consideration consists of £1.25m, of which £0.55m is payable in cash and loan notes and the balance satisfied by the issue of 505,415 new Cello ordinary shares. Further initial consideration of approximately £0.32m is expected to be paid in cash and loan notes subject to verification of the net current assets of Magnetic. In addition, there are further performance related consideration payments of up to £2.75m payable by reference to the period to December 2010, of which a minimum of 25% will be paid in the form of loan notes and the balance in new ordinary shares.
For the year to 31 March 2007, Magnetic had turnover of £2.62m and operating profit of £0.48m. Net current assets acquired by Cello at completion are expected to be approximately £0.57m including cash balances of approximately £0.40m.
Application has been made to the London Stock Exchange for the new shares to be admitted to AIM and it is expected admission will take place by 21 September 2007.
Mark Scott, Cello Chief Executive, said:
“Response comprises approximately 25% of the Group’s annual operating profit. It is a dynamic, data based business benefiting from the shift of client spend towards accountable, research based activity. Magnetic will strengthen our position with a range of existing and potential new clients in the UK.”