Acquisition

YouGov PLC
27 July 2007


 

27 July 2007

                                                                               

             YOUGOV EXPANDS INTO EUROPE WITH €21 MILLION ACQUISITION             
                                   IN GERMANY                                   

                                                                             

YouGov Plc ('YouGov'), the online market research agency, today announced its
first acquisition in Europe, having conditionally reached agreement to acquire
psychonomics AG, a German-based market research and consulting agency for an
initial consideration of €20.75 million and a maximum consideration of €23.75
million.

psychonomics was incorporated in 1992 and is headquartered in Cologne with
offices in Berlin. The company offers market research services (including
online) across various industries in Germany, and focuses on the insurance,
financial services and healthcare sectors. YouGov sees considerable
opportunities for the application of its online market research services in
these areas.

As one of Germany's top ten market research agencies, psychonomics has a diverse
client base including blue chip clients such as Allianz, Bayer, L'Oreal and
Siemens. YouGov expects its online-based market research services, such as
Omnibus and BrandIndex, to prove attractive to psychonomics' client base.

In the year ending December 2006, psychonomics grew profit before tax by 48% to
€1.1 million (from €0.7 million) on revenues up 32% to €13.6 million (from €10.2
million), ahead of the German market research market, which grew at 13.1%. The
net assets of psychonomics at the year ended December 2006 were €1.3m. The board
of YouGov believes that the acquisition of psychonomics will be earnings
enhancing in the first full year following completion of the acquisition.

The initial purchase price of €20.75 million includes €5 million payable in
YouGov shares with the balance in cash. Under the terms of the agreement, the
vendors cannot transfer their YouGov shares for at least 12 months following
completion of the acquisition. Of the initial cash consideration €3.15 million
is payable as a non-refundable deposit. Two earnouts have also been put in place
for the years ending December 2007 and 2008 and, based on financial targets
being met, a maximum of a further €3 million would be payable, either in cash or
YouGov shares. In addition to the purchase price payable, YouGov shares to the
value of €500,000 will be issued for a psychonomics employee incentivisation
programme.

The purchase agreement is conditional upon funding by YouGov. YouGov has secured
agreement in principle from The Royal Bank of Scotland for the provision of
finance which may be used for the cash element of the initial consideration
payable.

All YouGov businesses continue to perform well with increased investment in
people and infrastructure. With trading in line with market expectations, the
directors are confident that the 2007 financial year will be another successful
year, both financially and operationally.

 

Commenting on the acquisition, Nadhim Zahawi, CEO of YouGov said:

 

'This is our first acquisition in Europe and gives us a strong foothold in the
world's third largest market research market where psychonomics has a top ten
market position. On completion, YouGov will have a presence in the world's top
three global online market research markets - the US, UK and Germany.
psychonomics focuses on what YouGov sees as growth markets such as insurance,
financial services and healthcare and has a blue chip client base. We believe
that bringing to bear our proven online market research techniques will further
expand its services to clients.

 

'We see a major opportunity to migrate parts of psychonomics' traditional data
collection to our online technology, in addition to transferring its existing
online research to the YouGov platform. YouGov believes that both businesses
have an established presence in organisational consulting which demonstrates the
complementary nature of the companies. We also believe that organisational
consulting offers good opportunities to expand the services of the businesses.
This is an excellent purchase which meets our well defined acquisition
criteria.'

 

Professor Horst Muller-Peters, CEO of psychonomics, said:

 

'We see YouGov as a great fit with ourselves: culturally and organisationally,
particularly given their complementary market research services and their desire
to build a European presence. We operate in high growth markets, and believe
this has been reflected in our strong financial performance over recent years.
We're excited about becoming part of a larger market research group with a
strong presence in online research and expanding our methods into the YouGov
group and promoting YouGov in the German speaking world.'

 

Ends

                                                                                

Enquiries:

 
YouGov plc                                                             
Nadhim Zahawi                       07803 293 019                      
Katherine Lee                       020 7012 6000                      
                                                                       
Numis                                                                  
James Serjeant                      020 7260 1309                      
                                                                       
Financial Dynamics                                                     
Tim Spratt / Nicola Biles           020 7831 3113                      

Note to Editors:

 

Founded in May 2000, YouGov is a market research agency pioneering the use of
the Internet and information technology to collect higher-quality, in-depth data
for market research and public consultation. For the half year to 31 January
2007, YouGov, which lifted UK client numbers 46 per cent to 263, grew pre-tax
profits by 64% to £2.3 million on a turnover of £6.1 million. YouGov's embryonic
Middle Eastern arm was boosted by acquisition last year and grew revenues by 53%
in the first half of the financial year. Through a 32% interest in Polimetrix,
the Group has a presence in the US.

 

 



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