Centaur acquires Oystercatchers to expand marketing arm

21st Sep 2016 11:17

(ShareCast News) - Centaur Media, a multi-platform business information, insight and events group, has announced that it has agreed to acquire Oystercatchers for up to £3.35m in cash and shares.Oystercatchers is a consultancy that helps brands "accelerate" their marketing performance. It has around 300 clients including a broad range of blue chip fast-moving consumer goods (FMCG) companies such as P&G, McDonalds, British Airways, Barclays and Amazon.The firm believes the acquisition will build on its Econsultancy and other marketing assets to provide an international leading consultancy in the marketing sector.Econsultancy enables marketers and ecommerce professionals succeed online with insight and data tools. According to the board, the two businesses combined will provide aligned services to marketing clients that improve marketing capability and performance.Given the lack of client overlap, there is also the opportunity to cross-sell services to a wider client base over a broader geographical area.Completion is due on the 1st of October at which point £2.2m is payable, with the deferred consideration contingent upon achieving certain milestones, including Oystercatchers' earnings before interest, tax, depreciation and amortization (EBITDA) for the 12month period ending on 31 March 2017.The soon to be acquired company saw turnover grow from £1.1m for the full-year ending on 31 March 2012 to £3.4m in 2016. Profit before tax was £0.6m in the last financial year with gross assets standing at £1.1m.The whole consideration is payable 75% in cash and 25% in Centaur shares with a two-year lock-in period on the shares.Oystercatchers management are staying with the business.Chie executive of Oystercatchers Suki Thompson said: "Oystercatchers has evolved into one of the leading specialist marketing consultancies in Europe. Joining Centaur is another stage on this journey and will help us take our expertise to many more brands globally."Chief executive of Centaur Media Andria Vidler said: "This acquisition is a win-win for our businesses. The combination will enable Centaur to become the "go to" provider for brands seeking to drive its marketing performance. This kind of specialist acquisition is a good example of how Centaur will seek to accelerate its presence in its chosen market sectors."Shore Capital forecast Centaur's 2016 fiscal year-end net debt would reach £13.3m (1.1x EBITDA) versus facilities of £25m, meaning the company could comfortably accommodate the transaction within its then current debt arrangements. The broker reiterated its buy recommendation.Jonathan Barrett at N+1 Singer expected no benefit to accrue to the company in 2016 from the transaction, with the full positive impact expected in 2017.The purchase would then add 4.2% to the firm's earnings per share EPS and 5.1% to its profits before tax and prior to share dilution effects."After the disappointment of the July warning, driven by weak advertising around BREXIT, it is encouraging to see Centaur continuing to move ahead with strategic development in its largest unit. Provided Centaur delivers a satisfactory update in mid-October and continues to progress the shares should recover further (now c45p vs low of