News & Press
HASGROVE plc Extends European Public Affairs network with an acquisition in London
12th February 2008
Hasgrove (AIM: HGV, “the Group”), the pan European marketing and communications group, has acquired Politics International Limited (“Politics International”), a leading London-based public affairs consultancy, for a consideration expected to be between £2.7 million to £3 million, subject to earn out.
Politics International will operationally join the Interel group of companies, Hasgrove’s corporate affairs division. The earnings enhancing acquisition is an important step to establish the Group as one of the leading European corporate affairs operations. The Interel group of companies was enhanced last year by the acquisition of the Brussels-based consultancy, Cabinet Stewart and Berlin-based consultancy, Claudia Conrad.
Politics International, which was established 16 years ago, specialises in providing high-level strategic advice to blue chip clients in the public, private and voluntary sectors. In the year to 30 June 2007, its underlying profit before tax was £373,000. The Net Assets at 30 June 2007 were £454,000.
The consideration consists of an initial payment of £1.8 million, of which £1.2 million is payable in cash and the balance satisfied by the issue of 485,830 New Ordinary Shares at 123.5p. Accordingly, application has been made for 485,830 New Ordinary Shares to be admitted to trading on AIM on 15 February 2008. In addition there will be further deferred consideration based upon 50% of operating profit generated in the period to 31 December 2011. These further payments will be made with a mixture of loan notes and the issue of new ordinary shares with a minimum of 92.5% of the further consideration being paid in loan notes. The upper end of the estimated deferred consideration will be payable provided that Politics International generates operating profits of £2.4 million during the earn-out period. The initial cash consideration will be paid from the group’s bank facilities.
Joining the Interel group of companies is a natural step in the development of Politics International. It will now be able to offer its clients integrated services throughout Europe, particularly in the fast evolving EU Public Affairs market where Interel is one of the leading players. Politics International will also have access to a greater depth of resource within Hasgrove, particularly in related communications disciplines in the emerging digital sphere, which are bringing a new dimension to public affairs.
The founding director Andrew Dunlop and the board of directors are remaining with the business.
Rod Hyde, Hasgrove Chief Executive commented:
“This is another important strategic step in the development of our pan European corporate affairs capabilities. The Interel group of companies now has a presence in the major public affairs markets of Brussels, London and Washington DC. In addition to the acquisition being earning enhancing, given Politics International’s culture and operating base, we expect many operational synergies also to develop.”