Worthington Group PLC Acquisition (9042S)

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RNS Number : 9042S

Worthington Group PLC

29 September 2014

Worthington Group plc ("the Company" or "Worthington")

29(th) September 2014

FOR IMMEDIATE RELEASE

Worthington Group plc to acquire digital media, events and branding portfolio

Worthing Group plc is pleased to announce the acquisition of a number of different media investments. Assets within the portfolio include:

-- The Digital Marketing Show, launched last year which attracted 4,500 visitors and is expected to attract more than 10,000 this year at the UK's premier exhibition site at Excel in London. The show was nominated for Best Launch show at the industry awards this year.

-- The Great British Entrepreneurs Awards, sponsored by RBS is the event celebrating Britain's business community.

-- In the consumer space, the portfolio embraces cycling, one of the biggest trends in fitness since golf and publishes Essential Cyclist online.

   --     Britain Means Business, event aimed at encouraging Britain's growing SME market. 

-- The Digital Marketing Magazine, and also one of the leading business to business online news sites

Customers served by teams within the portfolio include:

   --     Tech giant Dell - where the team provides original content 
   --     The UK leading accountancy firm Kingston Smith 
   --     Insurance giant Axa 
   --     Brand leader in the automotive space BMW (Mini) 
   --     Global business services company Fed EX, 
   --     Nat West Bank 
   --     Technology leader Oki. 

-- In Russia and central Europe, the advertising and marketing arm works for both Coca-Cola and Danone.

Worthington is forming a new subsidiary Worthington Media Portfolio Limited (WMP) to hold these investments and further media acquisitions as the group rapidly expands its portfolio. Leading the team joining WMP is event and exhibition veteran Simon Burton. Mr Burton is currently CEO of Exposure Communications and founder of The Great British Entrepreneurs Award; previously Mr Burton created and sold shows including the Exhibiting Show, London Venue Expo and Energy Solutions Expo: buyers included UBM plc. Mr Burton also advises a host of clients on branding and marketing particularly in the sports and business to business sectors.

Commenting on the announcement today Mr Burton said, "Acquisitions form an important part of our growth strategy. The majority of marketers believe that spending on digital marketing will soon exceed their traditional marketing budgets, yet there are a lot of businesses out there, in particular in the exhibition and events industry, where media owners aren't exploiting the relationship they have with the communities they serve. Teaming with Worthington provides us with the access to capital markets that we need to go out on the acquisition trail."

It's this convergence of Content, Community and Commerce that has prompted Mr Burton, leading the new formed Worthington subsidiary to start planning to develop a crowd funding platform. "We engage with thousands of entrepreneurs and investors via our events and publications and we want to create a market place where great businesses can find the funding they need to grow" commented Simon.

Welcoming the acquisition, Doug Ware the CEO of Worthington Group plc said, 'We wanted to do this deal for three reasons. First to give us exceptional financial returns. The second was to bring valuable expertise into the group when it comes to future acquisitions. And thirdly to give us eyes and ears on the ground in new markets where the new team operates. It's like having our own sales force on five continents."

The portfolio of media assets are expected to generate net profits of US $1.5m in 2015 having already generated US $345,000 in the six months to end of June 2014, with further substantial growth in 2016 forecast. The portfolio has offices supplemented by associates in the UK and in Russia, Turkey, Central Europe, Australia and the USA.

Upon completion of the transaction, which is subject to shareholders' approval and the production of a prospectus, the vendors will be issued with 2.5m Worthington ordinary shares.

Developing on the reasons for the deal Mr Ware said, "Digital media has been one of the fastest growing sectors throughout the recession and is set to grow rapidly with the improving economic climate. Advertising and marketing has historically been highly rated by the stock market and, with the advances in technology that creates so many more routes to market for brands and institutions, the media sector is set to grow exponentially over the coming years. Not only do companies within the sector provide excellent long term return on capital potential they can also produce excellent trading profits and cash flow which is essential to balancing our portfolio of assets".

By way of illustration of the growth potential in the market and Worthington's portfolio, writing in Forbes magazine, Michael Brenner, Vice President of Global Marketing at SAP said, "The social, mobile web has digitized information and allowed us all to connect with anyone, anywhere. When we need information, we can find it instantly. But digital disruption is about more than just information. As brands, we need to kill promotional marketing messages and start providing customer-centric information that is helpful to our target customers. But we need to go even further than that if we want to break through all the noise. One of the biggest trends I am seeing involves brands acting as producers - going beyond the publisher mentality and setting up newsrooms and production studios. Netflix ("House of Cards"), Red Bull (Media House) and Amazon (Alpha House) are just the first wave of this emerging trend."

Expanding on reasons for the deal, Mr Ware went on to say, 'In addition to the intrinsic growth potential of the portfolio the team brings many other skills including the ability to spot hidden value in brands and in intangible business assets such as its customer base, reputation and heritage. Our portfolio now brings world class expertise in those areas."

In terms of geographic reach and the ability to find deals in some key market places Mr Ware said,' The acquisition of this portfolio provides Worthington with the eyes and ears that I want us to have out in the market place and it brings with it an extensive network of associated offices including Moscow, Kiev and Istanbul as well as London and the Middle East. Through their offices and contacts we've got feet on the ground in different geographic locations keeping an eye out for opportunities for future investments."

About Worthington Group Plc ("Worthington")

Worthington (Stock Exchange LSE: WRN) is a British investment company that celebrates its 60th anniversary as a London Stock Exchange main market listed company this year. The company has four areas of investment focus: property, litigation claims, new economy and emerging markets. The Company believes that exceptional shareholder returns can be achieved by utilising its main market Sterling paper to acquire investments in these sectors worldwide.

Note: Forward-looking statements contained in this announcement, including descriptions of Equity Media Partners Limited and Worthington Group plc strategy and plans, as well as expectations for future revenue and earnings, reflect Equity Media Partners Limited and Worthington Group plc current views and assumptions with respect to future events and are subject to certain risks, uncertainties and assumptions. There are many factors that may cause actual results achieved by Equity Media Partners Limited and Worthington Group plc to differ materially from expectations for future results and expectations that may be expressed in or form an assumption of such forward-looking statements. Such factors include risks related to the day to day business of both companies, client volatility, sales fluctuations, the general economic climate, political and environment and other risks, cancellation due to weather of events and exhibitions, software failures and interruption to service to customers due to technical problems, acquisition delays and failure as well as other uncertainties related to the results of Equity Media Partners Limited and Worthington Group plc including risks of delays or closure of projects, price falls, currency fluctuations and changes in contract terms, legislation and administrative practices, as well as competition risk and other unforeseen factors. If one or more of such risks or factors of uncertainty were to materialise, or should one or more of the statements provided prove to be incorrect, actual developments may differ materially from the forward-looking statements contained in this announcement. Equity Media Partners Limited and Worthington Group plc are not under any duty to update the forward-looking statements contained in this announcement or to adjust such statements to actual results, except as may be required by law.

Enquiries:

   Charlotte Parham, Media information                           Tel: [phone] 

Or email: [e-mail]

   PD Cosec - Company Secretary                                        Tel: [phone] 

Website: www.worthingtongroupplc.com

 
Statement ends. 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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