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View All Press Releases| Tarsus Group plc | 19 May 2011 |
Acquisition of stake in IFO and Placing
Tarsus Group (LSE: TRS), the international business-to-business media group has agreed conditionally to acquire 75 per cent. of the issued share capital of Istanbul based IFO, one of the largest independent exhibition businesses in Turkey, for up to £10 million in aggregate payable in cash. The acquisition is in-line with the Group’s “Project 50/13” strategy of expansion into emerging markets and specifically the fast-growing Turkish economy.
In addition, Investec has conditionally placed 11,347,517 new Ordinary Shares with new and existing institutional investors at the Placing Price of 141.0 pence per Share to raise approximately £16.0 million (approximately £15.0 million net of expenses) for the Company.
Commenting on the Acquisition and Placing, Tarsus Managing Director Douglas Emslie said:
“The acquisition of IFO is an important step in the realisation of our 50/13 strategy to increase Tarsus’ revenues from fast growing, emerging markets to 50 per cent. of our total by 2013.
“IFO’s events are market leaders in their domestic market. The Turkish economy is projected to grow at a rate of approximately 5 per cent. between 2011 and 2013. Moreover, given Turkey’s unique geographical position on the crossroads between East and West, we believe there is a significant opportunity to develop the existing IFO portfolio into world leading events and bring existing Tarsus assets into this vibrant market.
“We continue to see more interesting M&A opportunities in our market. The additional capital raised will also mean that a short term reduction in the Group’s debt levels will provide additional flexibility, allowing us to continue with our growth strategy and take advantage of further potential opportunities.”
Highlights of the Acquisition
• IFO is one of the largest independent exhibition businesses in Turkey;
• The Acquisition, in-line with the Group’s “Project 50/13” strategy of expansion into emerging markets, represents the expansion into an established but fast-growing economy;
• The portfolio of events includes three market leading events;
- ASANSOR (an odd year biennial event held in April for the lifts industry),
- REW (an annual international event for recycling, environmental technologies and waste management); and
- Sign (an annual international event for the outdoor advertising and visual communications sector);
• Potential to utilise IFO as a platform to consolidate other exhibitions in the region and the opportunity to import key Tarsus Group events into Turkey; and
• 75 per cent. of the issued ordinary share capital of IFO to be acquired for up to an amount equal to 75 per cent. of eight times the adjusted IFO pre-tax profit for the financial year to 31 December 2011, capped at Turkish Lira 25.0 million (equal to approximately £10 million) payable in three instalments. The consideration will also be adjusted for the net cash in IFO at completion of the Acquisition and for the net proceeds of sale by IFO of an investment property.
Details of the Placing
• Placing of 11,347,517 Placing Shares at 141.0 pence per share representing a discount of:
- approximately 2.4 per cent. to the Closing Price of 148.5 pence per Ordinary Share on 18 May 2011 less the final dividend of 4.0 pence per share in respect of the year ended 31 December 2010 as announced by the Company on 7 March 2011 and for which the Placing Shares will not qualify; and
- approximately 5.1 per cent. to Closing Price of 148.5 pence per Ordinary Share on 18 May 2011;
• Approximately £16.0 million raised, approximately £15.0 million net of expenses;
• Approximately £10.0 million will be used to satisfy the aggregate consideration payable pursuant to the Acquisition Agreement; and
• Approximately £5.0 million will be used to reduce the Group’s indebtedness and provide additional working capital in order to provide the Group with a more flexible capital structure to enable the Group to pursue its “Project 50/13” growth strategy.
Shareholder approval is being sought to approve the Resolutions to enable the Placing at the Extraordinary General Meeting due to be held on 6 June 2011 at 1.00 p.m. A circular, comprising the Prospectus and notice of general meeting, will shortly be posted to Shareholders and will also be submitted to the National Storage Mechanism and will shortly be available for inspection at Hemscott.
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