News & Press
Acquisition of Odyssey Interactive expands digital capabilities
28th September 2007
Hasgrove (AIM: HGV, ‘Hasgrove’, “the Group”), the pan European marketing and communications group, has acquired Odyssey Interactive Ltd, an independent supplier of intranet solutions based on its own product, Interact. The estimated total consideration is £3.7m.
In a separate announcement today, Hasgrove has also acquired Pavilion Communication Services, a digital marketing agency. Both of these earnings enhancing acquisitions represent significant developments in Hasgrove’s strategy of increasing the digital focus of the Group and are part of a programme to acquire and develop a comprehensive portfolio of brand leaders in high growth areas in the UK and continental Europe. The Group sees considerable opportunities for revenue synergies from both acquisitions.
Hasgrove also published its interim results today for the six months to 30 June 2007 which showed the Group revenue jumped to £10.1m (four months to 30 June 2006: £4.7m), headline profit before tax was up to £1.2m (2006: £0.5m) and headline basic EPS was up to 4.6p (2006: 3.1p).
The consideration consists of an initial payment of £2.6m of which £1.8m is payable in cash and the balance satisfied by the issue of 550,260 new ordinary shares at 143.5p. In addition there will be further deferred consideration equal to 50% of Odyssey Interactive’s EBIT for the period to 31 December 2010. These further payments will be made in a mixture of short-term loan notes and New Ordinary Shares with a minimum of 50% of the further consideration being paid in loan notes. The funds for the transaction are from the Group’s own resources.
Formed in 1996 and based in Manchester, Odyssey has grown significantly in recent years due to its focus on providing Intranet solutions. In the year to 31 December 2006, Odyssey’s EBIT was £278,000. The Net Assets of Odyssey at 31 December 2006 were £299,000. On completion the company held cash of £0.5m.
Odyssey’s clients include the NHS, HMV, ADT, Carlisle group and Calor. It has many public sector clients and is particularly strong in the Housing Association market. Odyssey has developed its own intellectual property and there are now around 100 sites using the company’s Interact product. In addition to generating strong repeat revenues from support contracts, the company is continually developing additional modules that are offered to the client base.
The two vendors, Johnathan Briggs and Nigel Danson, are remaining as directors of Odyssey.
Rod Hyde, Hasgrove Chief Executive commented:
“We have identified internal communications as a growth area on which to focus. Odyssey is capitalising on this growth by developing a suite of products that allow people to contribute to and share in a company’s knowledge base.
“This earning enhancing acquisition has particularly strong recurring revenue. We will work with Odyssey to assist in opening up new marketing opportunities for the company’s existing products. In addition Odyssey will be instrumental in extending the Group’s current activity in internal communications.”
Rod Hyde, Chief Executive 0161 817 4200
Paul Sanders, Group Finance Director
Adrian Duffield/Ben Way 020 7457 2020
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Capel Irwin/Richard Newman 020 7418 8900
Note to editors
Hasgrove, incorporated on 1 October 2004, is the holding company for a group of profitable and cash generative companies which provide communication services in public relations, public affairs, graphic design, advertising and online marketing.
Hasgrove was established to capitalise on the evolving world of communications. The Group provides services which encompass multi-channel, cross-disciplinary and cross-border activity. This is being achieved by a combination of organic development and acquisition within the fragmented marketing communications sector.
There are more than 250 personnel in the Group, serving a broad client base of more than 300 clients, working in the three well established, profitable and strongly cash generative operating businesses:
- Connectpoint specialises in advertising, public relations, public affairs and digital services.
- The Chase is a leading UK graphic design agency.
- Interel is a leading continental European communications consultancy specialising in corporate communications, European public affairs, Governmental relations and brand marketing communications. The Group acquired Cabinet Stewart, leading EU Public Affairs consultancy in February 2007.