(London, 5th May 2015): The Vendor of Inside Mobile, now re-named M&C Saatchi Mobile, has completed the sale of the business to M&C Saatchi PLC with the sale of the final 10% holding for 1,019,267 shares in M&C Saatchi PLC (current price £3.26) which were subsequently placed in the market with institutional investors. This follows the purchase of a 20% holding in M&C Saatchi Mobile for 2,030,131 shares on 2nd May 2014 (prevailing price: £2.90).
These transactions complete a highly successful sale process which started with the original sale of 60% of Inside Mobile in June 2010 for £2m, advised by D5 Capital. At the time of the deal, the Vendors clearly saw that their market was shifting from corporate ‘app development’ towards mobile advertising, but that a major international partner was needed to support the internationalisation of the business in order to secure a leading position in that market. Management believed that M&C Saatchi PLC had the right reach, brand and culture to support the growth plan and worked with D5 Capital to structure an earn-out that would reward that partnership.
The transaction was modified in 2013 to accommodate the early retirement of one of the Vendors and to provide added incentive for the management to grow the business across the M&C Saatchi network. A novel profit participation model was also created to reward both the local offices and the M&C Saatchi Mobile ‘hub’ for sharing the risk of this expansion. As a result, M&C Saatchi Mobile opened offices in Cape Town, Los Angeles, New York, San Francisco and Sydney during the earn-out period and grew profits of the core UK business to over £3m – an 8x increase of over the period compared to pre-acquisition profits.
Since the acquisition, M&C Saatchi Mobile has become an industry leader, winning Mobile Agency of the Year 2014 (The Drum Awards) and Best Agency for Mobile 2014 (iMedia Awards). I