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
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
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.