Be Heard Group to buy data analytics firm for £1.7m

7th Feb 2017 08:47

(ShareCast News) - Marketing firm Be Heard Group is to buy a 75% stake in marketing analytics Freemavens for around £1.7m in a bid to crack the big data and analytics industry.The acquisition and associated costs will be funded through a cash placing to raise £2.1m.Be Heard will buy 75% of Freemavens' equity for £840,000, through a payment of £480,000 in cash and the issue of 9.3m new shares. As part of the deal, Be Heard will also repay Freemavens' existing debt obligations of around £870,000, due principally to the exit of majority shareholder Let's Go Crazy, taking the total consideration to about £1.7m.The remaining 25% stake in Freemavens will be retained by its two founders, who are continuing with the business, and the company will be able to buy the 25% stake after four years, payable 50% in cash and 50% in new shares, at a value of the lower of two times historic revenue and eight times historic EBITDA, with a maximum consideration of £7.7m.Freemavens will become Be Heard's fourth partner, and is the company's first acquisition in data and analytics, which it believes is central to digital marketing and will become a core foundation of the company as it delivers more creative solutions to clients.The acquisition adds a fourth division to Be Heard of strategy, innovation and analytics to the three already represented, digital media planning and buying, UX, design and build, and content and integrated creative.Freemavens clients include Unilever, Barclays, Channel 4 and RNLi, which the company hopes it can target for for further services from its other companies.Peter Scott, executive chairman of Be Heard, said: "The Freemavens team will give Be Heard industry leading analytics capability, and once bedded into our group will augment and enhance the work we do for clients. Intelligent use of data underpins all decision making; our intention is to develop the analytics capability at Be Heard as a central function and resource for our clients. Bringing the exceptional Freemavens team into the fold is, I believe, a bold first step."Christopher Palengat, co-founder of Freemavens, added: "Be Heard offers the perfect opportunity to take what we have built in analytics and insight to the next level. The value they place on analytics, and the quality of the existing partner companies present enormous new opportunities for Freemavens. "For the financial year ended 31 December 2016, Freemavens delivered £1.72m gross revenue and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of £410,000.The company will place 58.3 shares of 1p each at a price of 3.6p per share to raise £2.1m, before expenses, which represents 8.2% go the company's existing issued share capital. The shares will be admitted to trade on AIM around 9 February and following admission the company's issued exiting share capital will consist of 782m shares of 1p each with one voting right.