Cello Group consists of Insight, a healthcare market research company, and Scottish advertising agency The Leith, as well as Target Direct.
The initial consideration consists of £3.6m, of which £1.95m is in cash and loan notes and £1.65m in new ordinary shares. In addition, there is a maximum deferred consideration of up to £1m in loan notes and new ordinary shares, dependent on the financial performance of Navigator for the three-year period to December 31 2007.
Mark Scott, Cello Group chief executive, said: "Navigator marries Target Direct's existing strength in direct marketing for charities and the grey market with its equal strength in commercial direct marketing. The combination of the two operations significantly strengthens Cello's capabilities in the direct marketing sector."
Navigator's audited profits before tax for the year ended December 31 2003 were £408,563 on turnover of £5.25m.
Andy Carolan, chairman of Navigator, said: "Three years ago we set to become Scotland's number one direct marketing company and last year we achieved that in terms of sales, staff and clients. This deal opens up a whole vista of new opportunities for us."
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