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FIND/SVP Buys Two in US
Research and business advisory firm FIND/SVP, Inc. has announced the acquisition of two US agencies, along with mixed operating results for the fourth quarter and year ended December 31, 2004. The acquisitions are Boston-based Atlantic Research & Consulting, Inc. and Washington, D.C.'s Signia Partners, Inc.
Atlantic is a fast-growing quant and qual custom research firm, focusing on the financial services, management consulting, health care and public sectors and established in 1985 by Peter Hooper, Ph.D. 2004 revenues were $5.8m.
Signia provides in-depth business research and fact-based decision support for the financial services, health care and consumer sectors. Founded in 1984, it was acquired by its current CEO, Douglas House, in 1992, and achieved revenues of $4.4m in 2004.
Terms of the transactions include an initial total payment of $7 million in cash and $800,000 in common stock, plus a three-year contingent earnout. Bank of America has issued a commitment to provide $9.0 million of senior debt financing for the transactions. Jefferies & Co. was engaged by FIND/SVP to assist in the securing of the bank financing. Both transactions are scheduled to close early next month.
FIND/SVP CEO David Walke said the acquisitions 'greatly enhance our long-stated commitment to create a leading, single-source provider of business intelligence and research'. Atlantic will add to the company's existing custom MR division, Guideline, 'with no client and little sector overlap... and critical presence in the New England marketplace', according to Walke. Signia's high-impact services will be integrated into and strengthen the group's Strategic Consulting and Research practice, as well as adding presence in the mid-Atlantic region.
Hooper and House will serve as members of FIND/SVP's Operating Management Group, and will lead the Company's respective market research and in-depth business research divisions.
While FIND/SVP's results for the year as a whole were positive, the last three months of 2004 somewhat spoilt the picture. Annual revenues were up 21.8% to $38,437,000 and adjusted EBITDA* up 5.2% to $2,305,000. Fourth quarter revenues were 10% down at $9.2m, with adjusted EBITDA* down to $74,000 from $993,000 in Q4 2003. Net loss attributable to common shareholders for the fourth quarter was $(816,000) or $(.04) per share.
Walke described the fourth quarter as 'difficult' and blamed the results principally on 'continued softness in our on-demand legacy business inquiry service, as well as lower-than-expected recognized revenues at Guideline due to delays in select projects'. Bookings for the latter 'remain excellent' however, having increased 14.3% to $11.5m in 2004 and now on target for around $4m in the first quarter of 2005.
Walke says the company's Teltech division had a strong year, making inroads into R&D and engineering departments of major corporations and launching a new Litigation Support service, while the Strategic Consulting and Research practice improved performance. The continuing 'struggle' faced by the company's original on-demand QCS service is being addressed by repositioning to add value, even as its significance to the overall business is reduced: Walke says that on the completion of the two acquisitions 'the legacy on-demand business will constitute less than 35% of pro forma consolidated revenues, as opposed to over 90% three years ago'.
Founded in 1969, FIND/SVP is the second largest member of the global SVP Group, and is online at www.findsvp.com
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