YouGov has announced a major expansion of its international presence, completing its buy of US-based Polimetrix and also acquiring Nordic agency Zapera, while raising around £27m by means of an institutional share placing.
YouGov says that along with the buying of German agency psychonomics, at the end of July (DRNO www.mrweb.com/drno/news7105.htm ) the moves will 'establish key geographic hubs', add expertise in its target sectors, expand its client base and 'provide an enlarged platform from which to accelerate organic expansion.' These target sectors are listed as brand research, financial services, FMCG, healthcare, insurance, political and social and organisational consulting.
The institutional share placing, which has been fully underwritten by Numis Securities Ltd, will give YouGov £24.5m net of expenses, and will issue 19,285,714 new ordinary shares of 0.2 pence each. Around £21.7m of the proceeds of the placing is to be used to satisfy the cash part of the acquisition agreements, with the balance to be satisfied by the issue of shares.
Each of the psychonomics and Zapera Acquisition agreements contain earn-out provisions which, if met, will require YouGov to pay an estimated £6.5m more.
Commenting on the acquisitions Chief Exec Nadhim Zahawi says: 'all three acquisitions expand our client base, which we hope will allow us to introduce products and market research services to a wider market. In addition we believe that these acquisitions will provide YouGov with an enlarged global presence in key hubs in the USA and EMEA.' He adds: 'We're delighted that the vendors are taking up part of their consideration in YouGov shares and are also delighted that the management vendors will be working with us to deliver future growth.'
Palo Alto, California-based Polimetrix has a panel of approximately 1,000,000 people in the US and Canada and is active in the public affairs, university and government sectors. Founded in 2004, Polimetrix had revenue of £1.1m in the year ended 31 December 2006 and recorded a loss before tax of £0.7m. On this date it had gross assets of £4,212,000. YouGov currently holds a 32% stake in the firm, and in buying the remainder for £11.7m, a price of $2.10 per share, is exercising an option agreed at the time of the initial buy in December 2006.
An online research agency with offices in Denmark, Finland, Sweden and Norway, Zapera specialises in healthcare, pharmaceutical and brand research with products including BrandMeter and ImageMeter and a panel of over 125,000 people in the Nordic/Baltic region. It employs more than 68 people at five locations in the Nordic region.
In the year ended 31 December 2006, Zapera had revenue up 51% to £3.6m, profit before tax more than doubled to £420,000 and gross assets of £3,032,000. YouGov will pay around £5.3m, more than 90% of it in cash, and will apply £2m towards the repayment of loan capital, the acquisition of bank debt and the payment of deferred consideration pursuant to a previous acquisition made by Zapera. An additional consideration of £2.25m is payable subject to results by 31 July 2008; and the firm's two original founders may get up to £1.25m (50/50 cash and shares) in earn-out between them, by 31 July 2010.
An EGM of YouGov's shareholders will be held on 3 September to vote on the share issue. Application will be made to the London Stock Exchange, with the shares expected to be admitted on 6 September 2007.
Founded in May 2000 and listed on AIM in April 2005, YouGov grew pretax profits by 64% to £2.3m on a turnover of £6.1m for the half year to 31 January 2007. Web site: www.yougov.com.
All articles 2006-18 written and edited by Mel Crowther and/or Nick Thomas.