TIDMBHRD
RNS Number : 1664R
Be Heard Group PLC
07 December 2016
Be Heard Group Plc
("Be Heard", the "Company" or the "Group")
Acquisition of Kameleon
Be Heard finds third partner in award-winning content marketing
agency
Be Heard Group Plc (AIM: BHRD), the digital marketing services
group, announces the acquisition of Kameleon Worldwide Limited
("Kameleon"), the award-winning content marketing agency.
Founded in 2008 by Mark Webster and Richard Armstrong, Kameleon
is one of a new breed of agencies using content, analytics and
technology to change the way that brands connect with consumers.
The agency provides cutting-edge content marketing services to
leading brands including Danone, Quorn, RockCorps, Celebrity
Cruises, Lee Cooper, National Citizens Service, City Index and Sony
and was named Content Marketing Agency of the Year by the Drum
Network in 2015.
This Acquisition is the latest step towards Be Heard's goal of
building a digital marketing services group designed to deliver
better, more cost efficient and more creative solutions to
clients.
For the financial year ended 31 December 2015 Kameleon achieved
adjusted EBITDA of GBP0.530 million on gross revenues of GBP2.43
million. In 2016, it is expected to generate gross revenues of
GBP3.89 million, representing 60% annual growth, with adjusted
EBITDA of GBP0.785 million.
Terms of the acquisition
Be Heard will acquire 100% of Kameleon's equity for an initial
consideration of GBP4.05 million, representing 5.2x adjusted EBITDA
for 2016. A deferred consideration of GBP3 million is payable in
equal instalments over the three years to 2019 subject to gross
revenue reaching 110% of the previous year's level. An additional
'stretch' payment will be payable in 2019 if Kameleon achieves
sales and EBITDA of at least GBP8.1 million and GBP1.62 million
respectively. The total deal is capped at GBP10 million. Kameleon
is being acquired on a debt free/cash free basis.
Both the initial and deferred considerations will be paid 65%
cash and 35% shares in Be Heard. Any stretch consideration will be
payable 50% cash and 50% shares. Any share consideration paid under
the deferred or stretch plan will be calculated subject to maximum
and minimum share price limits.
The initial consideration and associated expenses will be funded
from the Group's cash reserves.
The Acquisition is expected to be materially earnings enhancing
in the first full year of ownership.
Benefits of the Acquisition
The Board believes the Acquisition will provide a number of
strategic and operational benefits which will create long-term
value for shareholders. In particular:
-- The Directors of Be Heard see demand for digital creative and
content services as one of the key growth drivers for the Group as
people spend more time using smartphones, tablets and other
connected devices and clients increase expenditure in this
area.
-- The Acquisition moves Be Heard squarely into content
marketing, which represents a significant market opportunity,
accounting for 12% of digital marketing budgets according to an
April 2016 report by Econsultancy, second only to paid search.
-- Kameleon brings a highly experienced and talented team with
cutting-edge creative and marketing skills into the Group, adding
award-winning content strategy, story-telling, production and
marketing capabilities across video, social and mobile
platforms.
-- It has developed a scalable proprietary suite of analytics
and project management tools to help clients create bespoke content
marketing roadmaps and help plan, manage and optimise campaigns, in
line with Be Heard's results-driven philosophy.
-- Kameleon works with some of the world's leading brands,
creating opportunities to expand the range of services that Be
Heard can offer these clients as part of the enlarged Group.
-- Kameleon is already partnering successfully with Be Heard's
existing businesses - digital media planning and buying agency
agenda21 and UX, design and build specialist MMT Digital -
highlighting the opportunities and synergies between the three
Group agencies.
-- The Founding Partners at Kameleon are taking shares in Be
Heard to participate in the Group's growth, aligning their
interests with those of our existing shareholders.
Peter Scott, Executive Chairman of Be Heard said:
"Digital content is a natural next step for Be Heard as we
develop our range of services across the digital ecosystem and
Kameleon is precisely the sort of agency we want - fast-growing, at
the heart of digital transformation and ready to work with us to
take their business to the next level. Mark, Richard and the team
have superb strategic, creative and analytics skills and an
impressive client list, all of which will help us as we create the
most compelling digital marketing proposition around. We have a
very healthy pipeline and hope to update the market with more deals
that fit our strict acquisition criteria in due course."
Mark Webster, CEO of Kameleon said:
"It's great to be joining Be Heard Group at this formative
stage. Digital content marketing has fundamentally changed the
relationship between consumers and brands and the speed of this
change continues to accelerate. We share Be Heard's belief that
there is another way for independent digital agencies to come
together to deliver outstanding work for clients and scale up.
Working with agenda21 and MMT Digital we will capitalise on the
advantages that Be Heard brings and take our business to the next
level."
Application has been made to the London Stock Exchange for the
admission of 33,585,456 new ordinary shares, representing the
initial consideration shares, to trading on AIM. Admission of the
new shares is expected to take place at 8.00am on 12 December 2016.
The Company's total issued share capital following admission will
consist of 714,476,301 ordinary shares of one pence each with one
voting right per share. The above figure of 714,476,301 may be used
by shareholders as the denominator for the calculations by which
they can determine if they are required to notify their interest
in, or a change to their interest in, the Company following
admission.
For further information, please contact:
Be Heard Group plc +44 20 3828 6269
Peter Scott, Executive
Chairman
Robin Price, Group Financial
Director
Numis +44 20 7260 1000
Nick Westlake / Kevin Cruickshank
(Nominated Advisor)
James Black (Corporate
Broker)
Bell Pottinger (Financial
PR) +44 20 3772 2573
Elly Williamson ewilliamson@bellpottinger.com
Charlie Stewart
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) prior to its release as part of this
announcement.
Notes to Editors:
About Kameleon
Founded in 2008, content marketing agency Kameleon specialises
in digital and social content and is custom-built to provide brands
with content-led campaigns that are both more effective and more
engaging than traditional advertising. Kameleon creates compelling
content that entertains and engages in its own right but is as
accountable and measurable as any other marketing discipline. We
have eight years of experience, case studies and ROI data to show
that Kameleon's approach works. We exist to help brands change the
way they advertise.
www.kameleon.co.uk
@Kameleon_WW
About Be Heard Group plc
Be Heard Group plc (AIM:BHRD) is a digital marketing services
group operating at the intersection of marketing, technology and
e-commerce. Our vision is to build an agile interconnected group
focused on helping clients maximise their return-on-investment from
digital marketing. To achieve this, we acquire and connect
best-in-class companies spanning key digital disciplines, providing
management experience, access to deeper resources and a strong
platform for growth.
www.beheardgroup.com
@Be_Heard_Group
This information is provided by RNS
The company news service from the London Stock Exchange
END
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