QUEBEC CITY and LONDON, U.K., July 4 /PRNewswire-FirstCall/ -- Cossette Communication Group Inc. today announced that it is acquiring Dare Digital Limited, a leading interactive marketing agency based in London (U.K), in a six-year, three-part deal, whereby Cossette initially acquires a 65.4% ownership stake in Dare.
"Dare has a proven track record for creativity and effectiveness, and is recognized as a leader in its field," said Claude Lessard, Chairman of the Board, Chief Executive Officer and President, Cossette Communication Group. "This is an important and strategic addition to our U.K. operations where we can now boast a strong and innovative digital offering as part of our Convergent Communications(TM) services. While Dare will spearhead our digital offering in the U.K., they will also have the opportunity to collaborate with companies from different marketing disciplines within the Cossette group."
"We are genuinely excited at the prospect of building our relationship with the Cossette Communication Group," said Mark Collier, Dare's Managing Partner. Not only do Cossette recognize the increasing importance of interactive marketing within the overall communications mix, they also have an enviable track record of encouraging collaboration between different disciplines. We are greatly looking forward to working with Cossette to help take Dare to the next stage of its development."
Dare is a creative digital agency that specializes in the areas of website development, online advertising, interactive content, e-mail marketing, digital outdoor, and mobile marketing. It has a total gross income of approximately (pnds stlg)9.8 million (C$20 million) in its fiscal year 2007 and a staff of 130. Dare has enjoyed rapid growth since inception from both a revenue and profit standpoint.
Dare is led by Mark Collier, Managing Partner, John Owen, Planning Partner, Lee Wright, Managing Director and Creative Director's Flo Heiss and James Cooper. The company's Non-executive Chairman is John Bartle, former founder of leading advertising agency Bartle Bogle Hegarty. Dare clients include, Vodafone, Barclays, Sony Europe, ITV and Sony Ericsson. The agency has been the recipient of a number of prestigious creative awards including Campaign's Digital Agency of the Year for three years running (2003, 2004 and 2005), Revolution's Agency of the Year in 2005, the Interactive Marketing and Advertising Awards' (IMAA) Creative Agency of the Year in 2006 and the Revolution Awards Grand Prix in 2007.
Dare is the fourth London acquisition for Cossette. In December 2003, the Company acquired Identica, a leading brand consultancy, and in September 2004, the Band & Brown Group, a public relations company. These were followed by the acquisition of advertising agency Miles Calcraft Briginshaw Duffy (MCBD) and its promotional, direct and digital marketing subsidiary Elvis Communications in August 2005.
"Today's transaction is about delivering innovative solutions for our clients in key markets and across all communications disciplines. The addition of Dare is fundamental to achieve this," concluded Mr. Lessard.
In the first part of the transaction, effective July 3, 2007, Cossette acquires 65.4 % of Dare. This represents 100% of the holdings of BBH Communications Limited and 50% of the remaining shares. This initial transaction, comprising the closing payment and the purchase price adjustment based on the level of shareholders' funds in the closing financial statements, is estimated at (pnds stlg)10.0 million (approximately C$21 million). In addition, the first part comprises an earn-out component, the value of which will be based on the financial performance of Dare in the first two fiscal years following the closing of the transaction.
Regarding parts two and three of the deal, the acquirer has call options and the sellers have put options, allowing for either party to trigger the acquisition of the remaining 34.6% of Dare by Cossette. The first call/put may be exercised after the third year following the closing of the transaction (at the earliest) and applies to 17.3% of the outstanding shares, allowing Cossette to increase its ownership of Dare to 82.7 %. The second call/put option may be exercised after the fifth year following the closing of the transaction (at the earliest) and applies to the remaining 17.3% of the outstanding shares, at which point Cossette will have 100% ownership of Dare. The acquisition price of these remaining equity portions will be based on future financial performance, using an agreed upon formula. The deal is uncapped and the total valuation will be determined based on future growth and profit margins.
Cossette clients include: Alcan Primary Metal, Bell Canada, BMO Financial Group, Cadbury, Canada Post, Coca-Cola Limited, COI (Central Office of Information), Debenhams, General Mills Canada, General Motors of Canada, KeySpan Energy, McDonald's Restaurants of Canada, McNeil Nutritionals, Memorial Sloan-Kettering Cancer Center, Metro, Mitchells & Butlers, Molson, Nike, P&O Cruises, Perfetti Van Melle, Procter & Gamble, Schering Canada, Shoppers Drug Mart, Sony Ericsson, The Home Depot, The McGraw Hill Companies, Transat Tours, US Coast Guard, Waitrose, and Yellow Pages Group.
Log on to http://www.cossette-dare.com/ to learn more about this transaction
Analyst Conference Call - Financial analysts are invited to participate in a conference call with Claude Lessard, Chairman, CEO and President of Cossette and Jean Royer, Executive Vice-President and Chief Financial Officer of Cossette, today, July 4, 2007, at 11.00 am Eastern Daylight Time (Montreal, Toronto, New York), 4:00 pm British Summer Time (London) and 8:00 am Pacific Daylight Time (Vancouver, Los Angeles). Media can attend in listening mode only. In North America, dial 514-861-2255 or toll free: 1-866-696-5910. Elsewhere, the international toll free number is 00-800-8989-6336. In all cases, the confirmation number is 3227513. The archived call will be available at 1-800-408-3053, access code 3227513 (pound key) until August 3, 2007. The conference call will also be web cast live and available for one year in the Investor Relations section of Cossette's website at http://www.cossette.com/.
International Media Briefing Conference Call - Journalists are invited to participate in a media briefing and Q&A session with Claude Lessard, Chairman, CEO and President of Cossette and Jean Royer, Executive Vice-President and Chief Financial Officer of Cossette scheduled today, July 4, 2007 at Noon Eastern Daylight Time (Montreal, Toronto, New York), 5:00 pm British Summer Time (London) and 9:00 am Pacific Daylight Time (Vancouver, Los Angeles). In North America, dial (514-861-2255 or toll free 1-866-696-5910. Elsewhere, the international toll-free number is (00) 800-8989-6336. In all cases, the confirmation number is 3227518. The call will be archived until August 3, 2007 at 1-800-408-3053, access code 3227518 (pound key). The conference call will also be web cast live and available for one year in the Investor Relations section of Cossette's website at http://www.cossette.com/.
Cossette Communication Group Inc. offers a full range of leading-edge communication services to clients of all sizes, including some of the most prestigious brands in the world. A customer-driven organization built around highly specialized business units, Cossette also offers Convergent Communications(TM), a unique working method that brings added value to the client by integrating various services offered by the Group, including advertising, media planning and buying, sales promotion, database and direct marketing, customer relationship management, interactive solutions, public relations and alliance marketing, brand management and graphic design, strategic planning and research services, ethnic marketing, urban youth marketing, sports marketing, branded content and product placement, business-to-business communications (B2B practices). Cossette now has approximately 1,600 employees and offices in Quebec City, Montreal, Toronto, Vancouver, Halifax, New York, Boston, Irvine, Los Angeles, London, Moscow and Shanghai.
Cautionary note and forward-looking statements - This press release is not an offer of securities for sale. It may contain forward-looking statements concerning the Company's business, operations and strategies, including forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 in the United States. The Company cautions that, by their nature, forward-looking statements involve risks and uncertainties and the Company's actual results may differ materially from those expressed or implied in such statements, due to a variety of factors including downturns in general economic conditions and resulting changes in client business and marketing strategies, consolidation and globalisation of client brand strategies, the highly competitive nature of the communications industry, the greater resources available to much larger global agencies, low entry barriers for new competitors, dependence upon a limited number of clients contributing a significant percentage of income, inability to acquire new clients or new assignments from existing clients due to client policies prohibiting performance of similar services for competing products or companies, our ability to successfully integrate our acquired and to-be-acquired businesses and the retention of key management, creative and technical personnel. Reference should be made to the annual Management's Discussion and Analysis for an in-depth description of major risk factors.
