SHARES in Communisis, the Leedsbased marketing firm, jumped 2.6 per cent yesterday after announcing it had acquired brand response and customer relationship marketing firm The Communications Agency for £8m.
The takeover of the London-based group is set to broaden Communisis' business operations and its client portfolio.
"The Communications Agency is a long-established, award-winning and well-respected agency that brings an impressive range of new capabilities and experience to the group's design segment," said Communisis chief executive Andy Blundell.
"It will sit at the heart of Communisis' creative offering. The growth prospects are excellent," added Blundell.
The Communications Agency's 42 staff will join Communisis along with chairman Robert Prevezer and chief executive Adam Leigh.
The deal includes £6.55m in cash and Communisis shares worth £1.45m, £0.5m of the cash transaction is subject to The Communications Agency hitting its projected profits for 2014.
The Communications Agency is expected to improve Communisis' profits during its first full year of ownership.
"Communisis will be targeting both cross-selling and synergy benefits from The Communications Agency which brings important new capabilities as well as a complementary list of significant clients," said N+1 Singer analyst Mark Gibbon.
Communisis'FTSE-listed shares closed up at 59.25p yesterday, valuing the firm at around £112m.
BEHIND THE DEAL CAVENDISH CORPORATE FINANCE | LINDA SULLIVAN 1 A law graduate from Exeter University, Linda Sullivan previously worked at London law firm Macfarlanes until 1985.
2 Between 2003 and 2006 Sullivan was a director of Mediafund, specialising in media sector mergers and acquisitions such as the management buy-in of Mining Journal Limited in 2005.
3 Since joining Cavendish in 2011 as partner and head of media and digital she has worked on a string of deals including the £47m sale of Opta Sports to Perform Group last year.
4 This week, Cavendish has worked on three deals which have closed, including the sale of Boardman Bikes, run by former Olympic champion Chris Boardman, to Halfords for around £15m, and the £130m sale of electrical engineering firm Fandstan Electric Group to Wabtec Corporation.