Tarsus Group plc Completes Two Acquisitions

Posted: 10th February 2014 08:38

Tarsus Group plc (LSE: TRS, "Tarsus" or the "Company"), the international business-to-business media group, is pleased to announce the following acquisitions in two of its key markets. The Company has agreed to acquire 100% of the assets of HealthScienceMedia Inc. ("HSM") in the US and 60% of SADA Uzmanlik Fuarlari A.S. ("SADA") in Turkey (together the "Acquisitions").
The Company has also today announced a placing of 5.0m shares representing approximately 5.2 per cent of the Company's existing issued share capital (the "Placing"). The Acquisitions and the Placing are not inter-conditional and full details of the Placing are contained in a separate announcement released today.
The principal asset being acquired from HSM is the Cardiometabolic Health Congress ("CMHC" or "Cardio"), the largest US event focused on the cardiometabolic field. It is an annual congress which began in 2006 and is held over three days each October in Boston. CMHC's 2012 delegates comprised approximately 1,500 practising clinicians.
Healthcare providers and physicians increasingly understand that integrated management of all aspects of cardiometabolic risk (including obesity and type 2 diabetes) is an important way to deal with this rapidly growing problem area and this field of medicine is attracting significant pharmaceutical company investment.
Cardio is complementary to Tarsus' existing medical business and provides an established audience for the division's recently launched new mainstream product, the Metabolic Medicine Institute. We also believe there will be a number of possible synergies with the Group's existing medical division. HSM is owned by Alex Teperman, who will remain with the business on a consultancy basis.
The unaudited profits attributable to the assets being acquired in the twelve months to 31 December 2012 were US$2.0m (approximately £1.2m) on revenues of US$3.5m (approximately £2.1m) and the gross assets being acquired amount to approximately US$0.5m (approximately £0.3m).
Tarsus is acquiring the assets of HSM for $14 million (approximately £8.5m) of which $10m (approximately £6.1m) is payable in cash on completion with the balance payable in two equal cash payments after the 2014 and 2015 Cardio events respectively.
Established in 1967 and based in Ankara, SADA organises a single event - Komatek - which was first held in 1991. This biennial (odd years) show is Turkey's largest trade exhibition for construction equipment and related products. The last edition was held in May 2013 at the Ataturk Centre in Ankara with combined indoor and outdoor net space of 53,200m2. Over 400 exhibitor companies were present and visitor numbers, at approximately 35,000, were 9% higher than the 2011 event.
Komatek is the largest construction equipment exhibition in Turkey and one of the largest events in Europe. With US$1.0 trillion worth of major construction and investment projects expected to be completed in Turkey between now and 2023, the Group expects strong growth in Turkey's construction market over that timeframe.
SADA's management team has delivered strong performance to date and will continue to run the business post-acquisition. The exhibition also enjoys support from a key industry association.
The purchase of Komatek further strengthens Tarsus' position in the Turkish market and adds scale to our Ankara operations. The city's importance as an exhibition centre is expected to increase when the new Akyurt venue has been built, which is anticipated in 2015. Additionally, the Group believes there are synergies with Tarsus's CYF business, which owns Yapi Decoor (a building interiors event) and the Group's infrastructure event in Indonesia.
Unaudited revenues at Komatek in 2013 were TL3.3m (approximately £0.9m). Tarsus will pay an initial TL5.0m (approximately £1.4m) on completion and two additional payments contingent on the profit performance of the 2015 and 2017 events. The total consideration for 60% of SADA is capped at TL20.0m (approximately £5.6m).
The Acquisitions and the Placing together are expected to be earnings enhancing in the year ending 31 December 2014.
Douglas Emslie, Tarsus Group Managing Director, said:
"The two acquisitions are further steps in the execution of our "Quickening the Pace" strategy. Both are exciting events in markets where we have established a strong presence and which we believe are likely to show further growth. 
"Our focus will be on the effective integration of both businesses as cornerstones of our future organic growth. Cardio will bring greater access to the important US market for our wider medical division and Komatek delivers critical mass to our construction events in Turkey and Indonesia." 

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