Business
MBO of UK business
MBO of UK business.
About this update from Caledonian Holdings Plc.
[{"type":"text","content":"\n Deal Group Media PLC\n12 December 2007\n\n\nPress Release 12 December 2007\n\n Deal Group Media plc\n ('DGM' or 'the Group')\n\n Management buy-out of UK business\n\n\nDeal Group Media plc (AIM: DGM), an independent online marketing group,\nannounces that it has today exchanged contracts to sell a majority stake of its\nUK trading business, dealgroupmedia (UK) Ltd, and central technology team, to\nIsco Technical Services Ltd ('ITS') for a total consideration of £1.5 million.\n\n\nThe disposal of the UK business follows a strategic decision by the Board to\nfocus its resources on the Group's Asia Pacific operations where the supply of\ndigital advertising services is at an earlier stage of evolution and not\ncurrently meeting advertiser demand. In the year ended 31 December 2006, the UK\nbusiness generated EBITDA* profit of £0.1 million.\n\n*Calculated as profit before interest, tax, depreciation, amortisation and share\n based payments\n\n\nThe disposal of 51 per cent. of the UK business is being satisfied in cash with\n£1 million payable immediately with the remaining £500,000 to be paid on or\nbefore the 31 January 2008. The transaction is to be completed by 31 December\n2007. The Group will continue to hold 49 per cent. in order to enable its\nshareholders to profit from any future uplifts in the UK business.\n\n\nITS has been formed by a management team in order to facilitate the acquisition\nof the majority stake. This management buy-out team is led by John Porter,\ncurrent Chairman of DGM and Carl Davis, current Chief Technology Officer of DGM.\nThe management buy-out team will assume full operational control of the UK\nbusiness.\n\n\nUnder the Agreement, ITS will provide IT services to DGM at an agreed monthly\nfee and commit to rent an area at the Group's current headquarters at Highgate\nStudios for a minimum period of 18 months. DGM in turn will grant an exclusive\nlicense free of charge for the use of all software, trading names, and\nintellectual property rights within Europe as well as provide accountancy\nservices at an agreed monthly fee.\n\n\nThe sale of the UK business is a related party transaction for the purposes of\nthe AIM Rules and accordingly the independent directors, having consulted with\nDGM's nominated adviser Evolution Securities, consider that the transaction is\nfair and reasonable insofar ...