In a press release Next 15, the digital communications group, announced the acquisition of the entire issued share capital of Twogether Creative Limited (“Twogether”), a B2B creative and digital marketing agency with a focus on technology clients. Clients include multinational technology groups such as Brocade, Intuit, Symantec, Veritas, Lenovo and Zebra Technologies. It also has a proprietary Software as a Service (“SaaS”) offering in partnermarketing.com, which is used for channel marketing.
The initial consideration for the acquisition is approximately £6.6 million, of which approximately £4.0 million is to be satisfied in cash, with the balance to be satisfied by the issue to the vendors of 1,160,136 new ordinary shares in Next 15. Approximately £0.5m of loans owing to Twogether’s shareholders will be repaid on completion using Twogether’s cash reserves, resulting in the business being debt-free. Further consideration may become payable based on the average profits of Twogether for the years ending 31 January 2018, 2019, 2020 and 2021. Any deferred consideration that becomes payable may be satisfied by cash or up to 25 per cent in new ordinary shares, at the option of Next 15. The acquisition is expected to be earnings-enhancing for the Group in the current financial year.
For the year ended 30 June 2015, Twogether reported net revenues of £4.6 million, adjusted profit before tax of £0.9million and net liabilities of £0.2m and has performed strongly in the financial year to date. Although Twogether is based in the UK, approximately 40% of its revenues came from US-based clients in its 2015 financial year.
Application has been made to the London Stock Exchange for the new ordinary shares to be admitted to AIM and it is expected that admission will take place on 06 April 2016. Following the issue and allotment of the new ordinary shares, the Company will have 72,079,333 ordinary shares in issue. No ordinary shares are held in treasury.
Tim Dyson, CEO of Next 15, commented:
“Twogether is a great addition to the Group. Its digital offerings, software platform and client base make it very complementary to our other agencies. It is also a business that is looking to expand its US customer base, something we are well placed to help with. Of equal importance, however, is the strong cultural fit between Twogether and our other businesses. It will enable the Group to get full value out of these investments through natural organic collaboration.”
Kirsty Gilchrist, CEO of Twogether, said:
“Next 15’s commitment to the technology sector and passion for creativity and innovation was an obvious fit with our guiding principles at Twogether. Our specialism and expertise in B2B marketing for technology has been a key differentiator for our success over the last three years. It was vital for us to find a group who understood and were aligned with our focus and dedication, but who could also provide the global support and infrastructure we require to accelerate our US growth. We are incredibly excited by the possibilities that will come from being part of the Next 15 Group.”