Digital communications group Next 15 said it had acquired innovation agency Brandwidth. Group for up to £10.3m. The consideration involved an initial payment of £6.2m, including £4.9m in cash and the rest in shares. Further payments in 2018 and 2020 were conditional on performance. The maximum total consideration of £10.3m represented a 5.5 times multiple of Brandwidth’s adjusted earnings before interest and tax in the year ended 30 June, Next 15 said.
The initial consideration for the acquisition is £6.2 million, which will be settled with £4.9 million of cash and the issue of 292,235 new ordinary shares in Next 15. Further deferred consideration may be payable in September 2018 of up to £3.3 million and April 2020 of up to £0.8 million based on the EBIT performance of Brandwidth in the year ending 30 June 2018. The maximum total consideration of £10.3m represents a 5.5x multiple of Brandwidth’s adjusted EBIT in the year ended 30 June 2017. The acquisition is expected to be earnings enhancing for Next 15 in the year to 31 January 2019.
For the year ended 30 June 2017, Brandwidth reported adjusted net revenues of £7.3 million, adjusted EBIT of £1.9 million and adjusted profit before tax of £1.9 million. The joint CEOs, Phil Goodman and Jason Jones, and the Chairman, Andrew Strange, will continue to lead the business which includes clients such as Toyota, Royal Caribbean, Citroen, Kia and Vodafone.
Tim Dyson, CEO of Next 15, commented: “Brandwidth is a great addition to Next 15. It brings significant digital skills to the Group, in particular we are excited to be able to offer clients its capabilities around the use of voice. We see voice, through platforms such as Google Home and Amazon’s Alexa, as a highly disruptive form of marketing. Their knowledge and experience of working with these technologies are of immense value.”