Italian PR firm SEC to gradually acquire CLAI

21st Nov 2018 14:30

(Sharecast News) - Italian advocacy, public relations and integrated communications agency SEC has agreed to acquire up to 100% of the issued equity of public and corporate affairs company CLAI from its shareholders it announced on Wednesday, in line with its stated acquisition strategy.The AIM-traded firm said that under the terms of the agreement, it would initially acquire 10% of CLAI, although those shares would have 50.1% of the voting rights attached to them, with initial consideration to be a cash payment of €0.49m due immediately .After that, SEC would acquire 50.01% of CLAI over the next five years, with the second acquisition of 40.01% occurring between 31 July and 31 December 2020, and the third acquisition of an additional 10% happening between 30 July and 30 September 2023, at SEC's discretion.Following that, the shareholders of CLAI could call upon SEC to acquire the balance of their shares - the remaining 39.99% - anytime between 30 July and 30 November 2025.The company said the consideration for those further tranches would be cash payments, calculated by way of an earn-out."In particular, the consideration payable under the earn out will be calculated using an EBITDA multiple of 6x based on CLAI's reported EBITDA, subject to certain adjustments," the SEC board confirmed in its statement."The adjusted EBITDA and amounts payable by SEC under the earn out will be agreed between the parties or determined by independent accountants."It is agreed, however, that the maximum consideration under the acquisition agreement will never exceed €8.8m."The directors of SEC said they anticipated that the acquisition would be earnings-enhancing based on the current share price of the company, although that could not be guaranteed.