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Aegis Group plc acquires 100% of Moscow based Master Ad

Aegis Group plc, the marketing communications group, Wednesday announced that it has signed an agreement to acquire 100% of the share capital of the holding company of Master Ad LLC, a full-service out-of-home agency based in Moscow, Russia.

Master Ad is the leading specialist in the Russian outdoor media market enjoying consistent growth since forming in 2004. In recent years, Aegis Media Russia has worked closely with Master Ad which has significant expertise in crafting and delivering innovative out-of-home solutions.

Its reputation is based on a strong client focus and market experience, servicing large national and international clients within the outdoor planning, buying, creative and management process. Master Ad works with every key outdoor operator and more than one thousand contractors across Russia.

Following the acquisition, Master Ad will become part of Aegis Media’s global Posterscope network.

The consideration for 100% of the share capital of the holding company of Master Ad will include an initial upfront payment of €15 million. There is also an earn-out based on achieving certain annual profit targets from 2011 to 2014.

If Master Ad significantly outperforms the forecast market growth, total consideration could reach the maximum amount payable of €100 million. All consideration payments will be satisfied in cash.

The audited profit after tax of Master Ad for the year ended 2010 was €4.9 million and the value of the gross assets at that time was €21.4 million. The acquisition will be earnings accretive for Aegis with Master Ad expected to enhance the return on invested capital in its first full year in Aegis Group.

The vendor is Chart Finance Limited and Danil Pershin is the existing and future CEO of Master Ad. Completion of the acquisition is contingent on approval from the competition authority in Russia, which Aegis expects to obtain within the next two months.

Jerry Buhlmann, Chief Executive of Aegis Group noted that Master Ad boasts an enviable track record combining Out of Home advertising expertise with strong client service delivery.

This acquisition will immediately deliver Posterscope a No1 market position in Russia, enhancing Aegis’ overall presence in the market. The move demonstrates Aegis’ clear strategy of strengthening its services in faster-growing regions, extending its key networks, while providing its clients with increased capabilities and opportunities, said Buhlmann.

Master Ad specializes in planning and buying of outdoor media campaigns, creating innovative non-standard Out of Home solutions. The company has approximately 80 employees.

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