Incepta and Sard bosses complete new earn-out deal

NEW YORK and LONDON: Incepta and the management of its Citigate Sard Verbinnen unit are reconfiguring the earn out that was agreed to when the former acquired the latter in August 2000. The agreement has locked in Sard's senior leadership until at least early 2006.

NEW YORK and LONDON: Incepta and the management of its Citigate Sard Verbinnen unit are reconfiguring the earn out that was agreed to when the former acquired the latter in August 2000. The agreement has locked in Sard's senior leadership until at least early 2006.

Under the terms of the revised earn out, Incepta will pay the agency Sard ?8 million ($12.7 million) in cash, and 60 million newly issued Incepta shares in two segments. The first 55 million shares will be issued in March, and the remaining 5 million in 2005. Incepta shares recently traded at 12.75p ($0.20).

The deal prematurely ends what had been a five-year earn out. The original terms were for an all-stock deal with earn-out payments of fixed value, provided that Sard met certain financial targets.

The targets were met, but because Incepta's shares have tumbled over 85% since 2000, Sard's original all-stock payment would have required Incepta to issue a vast amount of new shares, which would have seriously diluted the equity of current Incepta shareholders.

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