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ISG Completes TPI Buy, Reports 7% Revenue Growth
In the US, acquisition firm Information Services Group (ISG) has concluded its deal to acquire outsourcing advisory firm TPI, and reported 2007 pro forma revenues up 7% to $172.7m.
With the acquisition only effective from November, the actual revenue figure for TPI-as-part-of-ISG was $18.9m, comprising six weeks of trading. For the periods prior to the acquisition, as a special purpose acquisition company ISG had no operations, and consequently no reported revenue in 2006.On a pro forma basis, the group's revenues were up $11.2m from $161.5m in 2006.
The growth came despite the impact of a $10.7m project conducted by TPI for its largest client in the first half of 2006, for which there was no equivalent sale during the first half of 2007. Excluding this, TPI pro forma revenues would have increased $21.9m or 15% (up 11% in North America and 20% elsewhere).
ISG reported an operating loss of $1.7m in 2007, compared with an operating loss of $0.1m in 2006. Pro forma operating income during 2007 aggregated $10.1m, up 18% from the previous year. Proforma EBITDA totalled $20.1m in 2007, an increase of 16%.
ISG Chairman and CEO Michael Connors, who was previously Chairman and CEO of VNU's MMI Group, says he expects to accelerate the group's progress during 2008 as it implements its three-year Value Creation Plan, designed to build additional revenue streams and achieve 'best-in-class' operating efficiencies. He adds: 'Our plan calls for increasing our revenues and EBITDA margins by approximately 50% and 500 basic points over 2007 levels'.
When ISG announced the TPI acquisition last April, as part of the agreement, TPI's management team agreed to invest 30% of the proceeds in ISG stock (www.mrweb.com/drno/news6715.htm ). During the year, ISG significantly reduced the number of shares of its common stock through a combination of its share repurchase program and redemptions of this stock for cash in connection with the TPI acquisition.
Based in Stanford, Connecticut, ISG (www.informationsg.com ) was founded in 2006 to build an information-based company by acquiring and growing companies specializing in data, business and media information services. TPI supplies data, research, and knowledge to help clients evaluate their outsourcing strategies, and is online at www.tpi.net.
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