Cello acquires iS Healthcare Dynamics

cello-logoCello Group plc, the insight and strategic marketing group, announces the acquisition of iS Healthcare Dynamics Limited (“iS”), an award-winning healthcare communications agency, specialising in medical communication services to UK, European and global healthcare clients.

The initial consideration is approximately £2.5m of which £2.0m is payable in cash, with the balance satisfied by the issue of 567,376 new ordinary shares. Further cash consideration will be paid to vendors on a pound for pound basis to the extent that net current assets are over £500,000 at the date of completion.

In addition, there are payments of up to £3.3m dependent on performance over the period to 31 December 2016. These further payments are in a mixture of cash and new ordinary shares at Cello’s discretion, with a minimum overall cash consideration of approximately 80%.

For the year to 31 March 2014, iS had an unaudited turnover of £6.6m, gross profit of £3.9m and profit before tax of £1.1m. Net assets as at 31 March 2014 were £2.1m, including cash of £2.1m. Operating margins in the future are expected to normalise to around 20% of gross profit. This operating profit is expected to be weighted to the first half of the year, in line with the historical spending patterns of the client base. The transaction is expected to be immediately earnings enhancing.

iS was established by Isaac Batley and Steve Smith in 2003 and is based in Farnham, Surrey. The business employs around 50 people.

iS will join Cello’s healthcare division, Cello Health, and will further complement Cello Health’s insight, advisory and communication based capabilities in the healthcare sector. This is consistent with Cello Health’s aim of becoming a leading global health services company.

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