TRS Tarsus Group Plc

TIDMTRS

RNS Number : 6534Z

Tarsus Group PLC

20 March 2012

20 March 2012

Tarsus Group plc

Acquisition of 70% of leading Turkish exhibition company Life Media

Tarsus Group plc (LSE: TRS, "Tarsus" or the "Group"), the international business-to-business media group, has agreed to acquire 70 per cent. of leading Turkish exhibition organiser Lifemedia Fuarcilik A.S. ("Life Media"), in a significant step toward its Project 50/13 target to derive 50 per cent. of its revenues from emerging markets by 2013.

Tarsus will pay an initial consideration of TL30.0 million (equal to approximately GBP10.6 million) for the 70 per cent. interest, with estimated deferred payments of approximately GBP5 million due in 2013, for a total estimated payment of approximately GBP15 million (the "Consideration").

In addition, Investec Bank plc ("Investec") has today conditionally placed 8,086,228 new ordinary shares of 5 pence each ("Ordinary Shares") with new and existing institutional investors at the placing price of 135.0 pence per Ordinary Share (the "Placing Price") to raise approximately GBP10.9 million (approximately GBP10.6 million net of expenses) to part fund the Consideration (the "Placing").

Acquisition highlights

-- Acquisition of 70 per cent. of Life Media for an aggregate cash consideration estimated at GBP15 million (the "Acquisition")

-- Significant step towards achieving Project 50/13 goal, boosting emerging markets pro-forma revenues to 43 per cent. of total revenues

   --      Expected to be earnings accretive in current financial year and 2013 

-- Acquisition represents the further consolidation of Tarsus' position as one of the largest international exhibition businesses in Turkey, following acquisition of IFO in 2011

   --      Life Media, established in 1997, has a leading position in Turkey's housewares and gifts business-to-business exhibition sector 

-- Life Media owns and organises two annual exhibitions in Istanbul, Zuchex (September) and Ideal Home Fair (April), and publishes related trade journals - one English and two Turkish language

   --      Founder Irfan Tiras will continue to manage the business after its acquisition 

-- Put and call options between Tarsus and Mr Tiras are in place in relation to the remaining 30% shareholding in Life Media at various points between 2015 and 2018

-- The aggregate consideration payable for acquiring 100 per cent. of Life Media is capped at TL78.0 million (approximately GBP27.5 million).

Placing highlights

-- 8,086,228 new Ordinary Shares placed by Investec with new and existing institutional investors at the Placing Price of 135.0 pence per Ordinary Share, representing a discount of approximately 3.5 per cent. to the closing price on 19 March 2012

-- To raise approximately GBP10.9 million (approximately GBP10.6m net of expenses) for the Company

-- Placing Shares will rank pari passu with the existing Ordinary Shares including the right to the proposed final dividend of 4.2 pence per Ordinary Share for the financial year ended 31 December 2011 and payable on 12 July 2012.

Douglas Emslie, Tarsus Group Managing Director, said:

"The Turkish exhibition market is one of the fastest growing in the world. The acquisition of Life Media, coupled with our acquisition of IFO last year, means that we now have one of the largest international exhibition businesses in Turkey.

"Life Media's exhibitions are the market leaders, not only in the domestic Turkish market but in the wider region.Given Turkey's unique geographic position on the crossroads between East and West, we believe there is a significant opportunity to develop the existing Life Media portfolio into world leading events.

"In executing our 50/13 strategy we have a number of opportunities under review, including certain exhibition businesses in China. Our flexible balance sheet means that we are able to move swiftly in securing assets should the opportunity arise."

 
 
  For further information contact: 
 
 Tarsus Group plc 
 Douglas Emslie, Group Managing Director    020 8846 2700 
 Dan O'Brien, Group Finance Director        020 8846 2700 
 
 College Hill: 
 Adrian Duffield/Kay Larsen                 020 7457 2020 
 
 Investec Investment Banking: 
 Patrick Robb/David Anderson                020 7549 5970 
 

There will be an analyst conference call at 8.00am - please contact Lucy Moseley at lucy.moseley@collegehill.com or on telephone 020 7457 2020 for details.

Strategic rationale

Life Media is wholly owned by Mr Irfan Tiras and his family (the "Vendors"). Life Media, established in 1997, has a leading position in Turkey's business-to-business housewares and gifts exhibition sector. Life Media currently owns and organises two large market-leading annual exhibitions in Istanbul, Zuchex (September) and Ideal Home Fair (April), and publishes one English and two Turkish language trade related journals.

Zuchex and Ideal Home host trade buyers and sellers of housewares, homestyle, household electrical appliances, gifts and premium products. When last held in 2011, Zuchex, the larger and more established event, had 564 exhibitors occupying all 12 halls of Istanbul's Tuyap Fair & Congress Centre, delivering 41,600 net square metres and attracting approximately 28,000 visitors. Following its acquisition by Tarsus, Zuchex will be the largest show by square metres in Tarsus's portfolio. Ideal Home Fair 2011, which takes place at the same venue, delivered 18,400 net square metres from 236 exhibitors and was attended by approximately 21,000 visitors.

Acquisition

The Consideration comprises an initial payment of TL30.0 million (equal to approximately GBP10.6 million) payable in cash at completion of the Acquisition and adjusted for Life Media's net cash position, and a deferred element to be paid in the first quarter of 2013. The Consideration, which the Directors estimate to be approximately GBP15 million, represents 7 times Life Media's adjusted profit before interest and tax for the year ending 31 December 2012.

Tarsus has entered into certain put and call options with the Vendors over the remaining 30 per cent. of Life Media which it will not own immediately following completion of the Acquisition, which are exercisable at one month's notice by either party within 30 days of the close of the Zuchex show in the financial years from 2015 to 2018. The total consideration payable for acquiring 100 per cent. of Life Media will not exceed TL78.0 million (equal to approximately GBP27.5 million).

On completion of the Acquisition, which is expected to occur at the end of March 2012, the Group will enter into a shareholders' agreement with Mr Irfan Tiras to govern their relationship, rights, obligations and the governance of Life Media following the date of completion of the Acquisition.

For the year ended 31 December 2011 Life Media recorded unaudited revenue of approximately TL12.6 million (equal to approximately GBP4.4 million) and unaudited profit before tax of approximately TL7.0 million (equal to approximately GBP2.5 million). Life Media's adjusted profit before interest and tax for the year ended 31 December 2011 was TL6.2 million (equal to approximately GBP2.2 million). Life Media's unaudited gross assets as at 31 December 2011 were TL14.3 million (equal to approximately GBP5.0 million).

Taking into account the total number of new Ordinary Shares to be issued pursuant to the Placing (details of which are set out below), the Directors of Tarsus expect the Acquisition and the Placing together to be earnings accretive in the current financial year and in the financial year ending 31 December 2013.

Placing

Tarsus today announces a placing of 8,086,228 new Ordinary Shares of 5 pence each at the Placing Price of 135.0 pence per Ordinary Share to raise approximately GBP10.6 million net of expenses. The Placing Shares being issued pursuant to the Placing represent approximately 9.3 per cent. of the existing issued share capital of Tarsus.

The Placing Price of 135.0 pence per share represents a 3.5 per cent. discount to the closing mid-market price of 139.9 pence per Ordinary Share on 19 March 2012, being the latest practicable date prior to the publication of this announcement.

Investec has agreed, pursuant to the Placing Agreement, and subject to certain conditions, to use its reasonable endeavours to procure, as agent for the Company, subscribers for the Placing Shares. The Placing is conditional, inter alia, upon:

-- the Placing Agreement not having been terminated prior to Admission in accordance with its terms; and

-- Admission becoming effective by not later than 08.00 a.m. on 23 March 2012 (or such later time and date as the Company and Investec may agree, not being later than 08.00 a.m. on 30 March 2012).

The net proceeds of the Placing will be used to part fund the consideration payable for the Acquisition. The balance of the consideration will be funded from the Group's existing cash and bank facilities. The Placing is not conditional on the completion of the Acquisition. In the unlikely event that the Acquisition does not complete, the Directors will consider how to apply the proceeds of the Placing.

It is expected that Admission will occur at 08.00 a.m. on 23 March 2012. The Placing Shares will, when issued, be credited as fully paid and rank pari passu with the existing Ordinary Shares, including the right to receive all future declared dividends. The Placing Shares will qualify for the proposed final dividend in respect of the year ended 31 December 2011 as announced by Tarsus on 7 March 2012.

Certain statements made in this announcement constitute forward-looking statements. Forward-looking statements can be identified by the use of words such as "may", "will", "should", "predict", "assurance", "aim", "hope", "risk", "expect", "intend", "estimate", "anticipate", "believe", "plan", "seek", "continue" or other similar expressions that are predictive or indicative of future events. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Group's expectations, intentions and beliefs concerning, amongst other things, the Group's results of operations, financial position, growth strategy, prospects, dividend policy and the industries in which the Group operates, are forward-looking statements. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Group and the Directors, which may cause the actual results, performance, achievements, dividends of the Group or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. As such, forward-looking statements are no guarantee of future performance.

This announcement has been issued by, and is the sole responsibility of, the Company. No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Investec or by any of its affiliates or agents as to or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Investec, which is authorised and regulated by the FSA, is acting exclusively for Tarsus solely in connection with the Placing and for no one else and will not be responsible to anyone other than Tarsus for providing the protections afforded to the customers of Investec or for providing advice in relation to the Placing or any other matter referred to in this announcement.

The distribution of this announcement in certain jurisdictions may be restricted by law. This announcement is for information purposes only and does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States, Australia, New Zealand, Canada, Japan or South Africa or in any jurisdiction in which such offer or solicitation would be unlawful and should not be relied upon in connection with any decision, or as any inducement, to subscribe for or acquire any new Ordinary Shares. In particular, this announcement does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States. No public offer of securities is being made in the United Kingdom or elsewhere.

This announcement is not an offer of securities for sale or a solicitation of any offer to purchase securities in the United States. Placing Shares may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended (the "US Securities Act") or an exemption therefrom. The Company has not and does not intend to register any securities under the US Securities Act and does not intend to offer any securities to the public in the United States. No money, securities or other consideration from any person inside the United States is being solicited and, if sent in response to the information contained in this announcement, will not be accepted. The Placing Shares have not been and will not be registered with any regulatory authority of any state within the United States.

The pound sterling/Turkish Lira rate as published by the Bank of England was 2.8 (rounded down to the next decimal point) as at 19 March 2012 (being the last practicable date before the date of this announcement). Unless otherwise stated, this rate has been applied to references in this announcement where amounts are expressed in Turkish Lira and a pound sterling equivalent.

This information is provided by RNS

The company news service from the London Stock Exchange

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