Saatchi to Buy Brand Research Agency for £18.4 Million

Ad giant M&C Saatchi has acquired Surrey-based brand research and consultancy agency Clear Ideas for an initial consideration of £18.4 million.

Clear Ideas - which employees 80 staff at its offices in Richmond, New York and Amsterdam - had 2006 revenues and operating profit of £12.7 million and £3 million respectively.

The firm's five founding directors Melvin Jay, Alistair Moore, Jonathan Williams, Steven Melford and James Osmond will remain as directors, while M&C Saatchi CEO David Kershaw and Finance Director Jerry Wales will join the company's board.

M&C Saatchi anticipates that the acquisition will contribute revenues of £6 million and operating profits of £1.3 million in 2007.

The deal will be paid for by issuing £3.4 million shares and a cash payment of £13.6 million funded via a new debt facility. A further £2.5 million will be paid if Clear Ideas makes more than £3 million profit in the year to end-March 2008.

Kershaw said that the deal is part of a drive to diversify its services, adding that more than half of its business will now come from areas outside traditional advertising.

M&C Saatchi was founded by brothers Maurice and Charles Saatchi in 1995 and currently operates from 18 offices across 13 countries. The group employs more than 750 people was listed on AIM in July 2004. The companies are online at www.mcsaatchi.com and www.clear-ideas.com.