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YouGov Buys as US Becomes its Biggest Market

April 4 2011

UK-based pollster and online MR firm YouGov plc has agreed to acquire Portland, Oregon-based Definitive Insights (DI), for an initial consideration of $1m and further performance-related payments adding to an anticipated $4.8m. YouGov also announced half-year revenue up 26.8% with an improved profit margin of 8.1%.

Stephan ShakespeareThe earn-outs cover performance in the two years ended 31 January 2013. Founded in 2009, DI is a custom research and consulting company with expertise in IT, pharmaceuticals, financials services and energy markets; and in market assessment, product and price optimization, customer satisfaction and advanced analytics. Revenues in 2010, its first full year of operation, were $4m. Its four founders and fourteen other staff will join YouGov's US team bringing its US headcount to 90 and worldwide more than 460.

YouGov says the buy will boost its strength in US corporate research and give it a West Coast presence to complement the Harrison Group and Marketing Insights, based in the east of the country; and further scope to leverage its proprietary technology, online panel and analytics capability stateside.

CEO Stephan Shakespeare comments: 'The excellent reputation of [DI's] founders and their staff and the high quality of their work is reflected in a superb client list which they have built up rapidly...' Doss Struse, Managing Partner of Definitive Insights, says the two firm 'share a vision for creating a research business driven by innovation and passion that delivers tangible results for clients' and adds: 'Becoming part of YouGov gives Definitive Insights scale and global reach, which are important to our key clients.'

YouGov's revenue for the first half of its fiscal 2011, ending 31st Jan, was up to £27.0m from £21.3m in H1 2010, while adjusted operating profit rose 57% to £2.2m. The USA has grown to become YouGov's largest region with 26% of Group turnover (£7.1m), its 274% growth the effect both of 66% organic revenue growth and the acquisition of Harrison, which is 'performing well'. The UK business also fared well with revenue up 19% to £6.4m, with Scandinavia (up 18% to £3.9m) and the Middle East also healthy. In Germany (revenue down 12%) the company is 'restructuring to address continuing poor performance'.

A particular boast is increased public sector revenues in the UK despite cuts in government spending and the boost provided to the previous year's figure by the general election.

The company says its more innovative product lines are especially promising, with revenue from its BrandIndex offer up 38% year-on-year as its international client base increases, online research leading the recovery in Germany and the new SixthSense series of business intelligence reports making 'a promising start' in the UK, as have macro-economic data products such as consumer confidence measure HEAT, launched in October 2010 and now covering the UK, USA and China.

Shakespeare concludes: 'Current trading is in line with the Board's expectations and we are already benefitting from the broader range of services that we can offer our clients. This combined with our strong balance sheet, means we are well placed to continue to invest in new products as well as to open up new markets.'

Web site: www.yougov.com .

All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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