Huntsworth PLC Acquisition of Giant Creative Strategy LLC (8107U)
17 July 2018 - 4:00PM
UK Regulatory
TIDMHNT
RNS Number : 8107U
Huntsworth PLC
17 July 2018
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION 596/2014 ("MAR").
17 July 2018
Huntsworth plc
("Huntsworth" or the "Company" or the "Group")
Acquisition of Giant Creative Strategy LLC for a cash
consideration of $72.2m
Huntsworth plc, the healthcare and communications group, today
announces the acquisition of approximately 90.2% of the membership
interests of Giant Creative Holdings, LLC, a limited liability
company and parent of Giant Creative Strategy LLC ("Giant") from
Shamrock Capital Growth Fund III L.P. and its affiliates and
Giant's former and existing management, for a cash consideration of
$72.2m funded from existing debt facilities.
Transaction highlights
Giant, based in San Francisco, is one of the largest independent
healthcare marketing agencies based on the US west coast. It
provides a full service, multichannel offering to its clients in
the biopharmaceutical, medical device and diagnostics companies,
through its circa 150 staff and derives circa 70% of its revenue
from marketing to healthcare professionals ('HCPs'), a key growth
area for Huntsworth. When combined with our existing Healthcare
marketing agencies led by New York-based Evoke, the Group will be
significantly more competitive in responding to changing client
demand that is seeking fewer but stronger partners to help access
the spectrum of their marketing needs.
Giant's management team is led by founders Steven Gold (CEO) and
Adam Gelling (President) who will remain with the business and who
hold, along with other senior management, the remaining circa 9.8%
of Giant Creative Holdings, LLC's equity which is subject to put
and call rights that are exercisable in March of each calendar year
commencing in 2021 (the "Put and Call"). The value of the Put and
Call will be determined based on a multiple of Giant's earnings
over the two-year period prior to exercise of the Put and Call,
subject to a cap of $25 million in the aggregate. Consequently, the
maximum aggregate consideration payable by Huntsworth for Giant
will be $97.2 million. Giant generated revenues of circa $32m and
EBITDA of circa $7m in the year to 31 December 2017 and the Group
expects the acquisition to be materially accretive to the Group's
earnings in the current financial year. Giant's gross assets were
$26.1m as at 31 December 2017. Huntsworth is entitled to settle any
consideration due under the Put and Call either in cash, by the
issue of ordinary shares in the Company ("Shares") or by a mixture
of cash and the issue of Shares.
Commenting on the acquisition, Paul Taaffe, Group CEO, said:
"We are delighted to welcome Giant into Huntsworth. Giant is a
strong addition to the Group, bringing scale in Healthcare
professional ('HCP') marketing especially in the fast growth
biotech sector and is led by an outstanding management team who
will continue to be invested alongside us in the business.
"This expansion of Huntsworth makes it an even more compelling
alternative to the large holding company networks."
This statement regarding management's views as to the accretive
nature of this transaction is not a profit forecast and should not
be interpreted to mean that the Group's earnings per share will
necessarily match or exceed the historic earnings of the Group.
Huntsworth plc - www.huntsworth.com
www.evokehealth.com
www.giantagency.com
Davis & Gilbert LLP served as exclusive legal advisor to
Huntsworth. Petsky Prunier Securities LLC served as exclusive
financial advisor to Giant and Kirkland & Ellis LLP served as
exclusive legal advisor to Giant
Enquiries to:
Huntsworth plc +44(0)20 3861 3989
Neil Jones Group CFO
Citigate Dewe Rogerson +44(0)20 7638 9571
Angharad Couch
Nick Reading
Elizabeth Kittle
Numis
Nick Westlake / Toby Adcock +44 (0)20 7260 1000
Dowgate
James Serjeant / David Poutney +44 (0)203 903 7715
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END
ACQDGGDRUSBBGIL
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