London-based Cordiant laps up Lighthouse for dollars 592m in stock, debt

NEW YORK: After spending the past year buying up companies, Lighthouse Global Network was gobbled up last week by Cordiant Communications for dollars 592 million in stock and debt.

NEW YORK: After spending the past year buying up companies, Lighthouse Global Network was gobbled up last week by Cordiant Communications for dollars 592 million in stock and debt.

NEW YORK: After spending the past year buying up companies,

Lighthouse Global Network was gobbled up last week by Cordiant

Communications for dollars 592 million in stock and debt.



Cordiant, a London-based advertising group eager to boost its US

presence, will issue 75 million new shares worth dollars 421 million,

based on last Tuesday’s closing price. Upon word of the deal, Cordiant’s

stock dropped 8.5%.



The deal also includes dollars 100 million in Lighthouse debt and

dollars 53 million in earnouts over the next five years.



The four-month courtship was a ’bumpy ride,’ said Cordiant CEO Michael

Bungey, but it was well worth the trouble: it gives Cordiant a stronger

foothold in North America and makes it a global player on the IR

scene.





Boasting 1,200 employees and 17 companies, Lighthouse is owned by its

management and two private-equity firms. Lighthouse’s operating profits

were dollars 30.7 million last year on dollars 158.9 million in

revenues, for a 19.3% operating margin.



Lighthouse has made several acquisitions over the past year, including

IR shops Morgen-Walke and Financial Dynamics. While execs had been

mulling an IPO, it’s clear they found the acquisition path more to their

liking.



Lighthouse will own about 20% of Cordiant following the merger.



While Lighthouse’s Marketing Services and Design & Development arms will

be merged with Cordiant’s existing operations, the Business

Communications unit (which houses FD and M-W) will stand alone and will

soon anchor a new PR arm, to be bolstered by acquisitions in Asia,

Brazil and Europe.



The price tag comes in at 19 times profits - numbers that shocked some

but are comparable to previous deals, Cordiant execs claimed.



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