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ToLuna Buys Greenfield Online
Microsoft has sold the survey division of Greenfield Online to panels specialist ToLuna for a cash consideration of $40m (just over £24m). The french-based company will use a placing and subscription to raise c.£26m net for the acquisition and other investment.
Greenfield bought Ciao Surveys in April 2005 and in 2008 was acquired by Microsoft.The software giant, which paid $486m for the combined group, had signalled its intention to sell the Internet Survey Solutions (ISS) division immediately, keeping its target, the Ciao comparison shopping business, which is now being integrated with search engine debutant Bing. However, an initial deal to sell ISS to ZM Capital fell through.
The deal, which will almost triple ToLuna's headcount, is accompanied by a major share sale and new investment: Verlinvest S.A., a private family-owned investment holding company located in Brussels, will acquire shares from Eurovestech plc, ToLuna's largest shareholder, and will as a result hold 13.38% of ToLuna - Verlinvest's Frédéric de Mevius will join the ToLuna Board. Eurovestech's holding in ToLuna will on completion fall from 50.6% to 29.9%.
ToLuna says the Greenfield buy will make it the largest of the independent online market research panel providers, with a share just over 11% - this includes around 8.6% for the Greenfield ISS Division. Greenfield's North American base will boost Toluna's existing US position and complement its strong pan-European operations, and there will be twin global HQs in Paris, France and Wilton, CT, USA.
ToLuna's Board says it expects several million dollars of synergies, with earnings per share enhanced by the year ending 31 December 2010.
ToLuna founder and CEO Frédéric-Charles Petit comments: 'This is a great step for ToLuna both from a strategic and corporate standpoint as we expand our reach and our shareholder base. We are delighted to have agreed this strategic acquisition, which will form the largest global online panel, communities and technology group servicing the market research industry with a strong market position and prospects for growth in the years ahead. It enables ToLuna to fundamentally improve the stability of supply of online samples to the market research industry. We are also pleased to be expanding our shareholder base and welcoming Verlinvest as a long term strategic shareholder which brings its expertise and network to the Group. The appointment of Frédéric de Mevius as a director will significantly reinforce our corporate structure and the board will propose to appoint and re-elect him for a new term at the next AGM. We look forward to welcoming the ISS team and beginning the work of integration. We are confident that this will be an excellent deal for all our shareholders, employees and clients.'
De Mevius comments: 'The acquisition of the ISS Division of Greenfield Online will give ToLuna a strong position in the US market, which together with its European presence, creates the world's leading company in this growing industry.'
A circular is being sent to Shareholders today to convene a General Meeting on 13th July to consider and, if thought fit, approve the Resolutions. The document is available from web site www.toluna-group.com .
The deal is scheduled to be closed on July 13th. Integration of the two companies begins immediately. The Placing, Subscription and Acquisition are all conditional on the passing of Resolutions by shareholders at the General Meeting and on Admission. However, CEO Petit and Eurovestech have committed to voting in favour and hold c.63.1% of the company's Existing Ordinary Shares; as has Invesco Perpetual which has a further 23.27%.
ToLuna has offices in London, Paris, Frankfurt, New York, Amsterdam, Seattle, Dallas, Haifa and Sydney. In December 2005 it acquired Frankfurt-based Speedfacts Gesellschaft; and in September 2006 it established a US office. In June 2008 it bought US digital data collection company Common Knowledge Inc. for a total consideration of £5.8 million.
The company's panel network currently extends to more than 2.6 million individuals spread across 30 countries; it employs 249 people, of which 70 are based in the US across seven different offices, and has 16 specialist panels and approximately 613 clients across four continents. In April ToLuna reported strong results for the year ended 31 December 2008 with revenue up 74% to £21.7m and EBIT of £4.7 million, on turnover of £21.7 million. As at 31 December 2008, ToLuna had net assets of £16.2 million.
Greenfield Online was co-founded in 1994 by Andrew Greenfield and Hugh Davis, the current executive vice-president of Greenfield Online. It became an independent entity following an MBO in 1999, and in 2004 was listed on Nasdaq via IPO.
The Greenfield ISS Division operates panels in over 28 countries and has offices in 10 countries. Following completion of the Acquisition, the enlarged group will employ over 700 people spread across 11 countries and will have a corporate client base of in excess of 1,000 companies.
The business and assets of the ISS Division include US based assets, together with the shares of subsidiaries incorporated in Canada, India, Germany, Romania, Australia, Japan and France. A break fee of $2 million is payable to Microsoft in the event that the Acquisition does not complete as a result of ToLuna's inability to satisfy relevant conditions.
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