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Cagney's Readies to Help Tree Branch Out
Marketing services holding company Cagney plc has acquired central London-based research agency Tree for an initial consideration of c.£1m in cash and shares.
Tree, which combines focus group techniques with quant data analysis to give predictive insights into consumer behaviour, was established in 2001 by managing partners Matthew Bayfield and Steve Mattey. Cagney was formed recently by CEO Paul Simons with the aim of buying marketing services firms.
Archibald Ingall Stretton (AIS), a direct marketing agency, was a 40% shareholder in Tree and has sold its share for around £405,000, while the founders will get £395,000 in cash and 5,488,000 new ordinary shares in Cagney, plus additional consideration based on the business's future profit performance.
Tree's unaudited accounts for the year ended 31st December 2006 show a net fee income of £1.8m and profit before interest and tax of £200,000, up from £1.2m and £89,000 the previous year.
Simons says the buy 'significantly strengthens Cagney's offering' and that the market's continuing move towards reliance on quantified consumer intelligence and insight promise strong growth for Tree's 'cutting edge' proposition.
Cagney released a trading update ahead of results this week showing a profitable first year of trading in 2006, with continued improvement in performance in the second half of the year. The board says it plans further acquisitions for 2007 and also anticipates significant growth on a like for like basis.
The firms are online at www.treelondon.com and www.cagneyplc.com .
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