St Ives has announced the acquisition of a majority stake in The App Business (TAB) in a deal that could be worth around £50m as the marketing services group bolsters its digital credentials.
The initial agreement will see the acquisition of 82.16 per cent of the mobile agency by St Ives for an initial £22.3m, of which £16.7m will be paid in cash and the rest through an issue of around 2.6 million shares in the group to vendors.
The intention is to purchase the remaining 17.84 per cent of the business through a call option exercised by St Ives and with the consent of the seller during a one-week period of 11-18 February. However, it may also be purchased by the group with £3.7m in cash and a further share issue of 0.6 million St Ives stock.
A deferred consideration of £27.8m may also be payable, with at least 75 per cent being made in cash and 25 per cent in shares, depending on product perform he over the financial year ends of 30 April for this year until 2018.
Matt Armitage, chief executive of St Ives, said: "This acquisition further strengthens St Ives' digital credentials, and, coupled with the recent acquisition of US based Solstice Mobile in 2015, significantly increases the Group's mobile strategy and product development engineering capabilities."
Along with news of the acquisition, St Ives also issued a trading update, with group revenue expected to be 5 per cent ahead of last year and organic growth for its half year set at around 15 per cent as a result of international expansion and business collaboration and acquisition growth of 20 per cent.
It was also revealed that revenue within the grocery retail segment was expected to be down by 10 per cent year-on-year.