emitch Buys New Zealand’s Largest On-Line Agency
EMITCH BUYS NEW ZEALAND’S LARGEST ON-LINE MEDIA AGENCY
emitch Limited has purchased The Internet Bureau, New Zealand’s largest on-line media buying business for the sum of $NZ8.9m ($A7.2m). The consideration will consist of $NZ6.8m ($A5.5m) in cash and 3m shares.
The purchase of The Internet Bureau is expected to add an estimated $NZ20m ($A16.3m) to gross billings of emitch in FY07, and approximately $NZ1.5m ($A1.2m) to profit after tax and be strongly EPS accretive.
The NZ on-line display market is expected to exceed NZ$40m in 2006 (source ACNielsen) of which The Internet Bureau has a market share of over 40 per cent.
emitch CEO Mr Lee Stephens said that “As is the case with Australia, Internet advertising in New Zealand has been experiencing strong compound growth of about 50 per cent. While NZ had lagged somewhat behind some developed countries in on-line advertising share, this was now changing rapidly, partly due to accelerating broadband adoption.
“The Internet Bureau had established a major competitive advantage and strong market position in its market, having placed on-line advertising for over 300 companies on behalf of over 25 of New Zealand’s leading advertising agencies, a number of which have signed exclusive supplier agreements with The Internet Bureau. Following the acquisition, emitch will be the largest online agency in Australia and New Zealand”.
He said that “emitch intends to build on this leadership position by leveraging emitch’s competencies in search advertising, ROI management and electronic direct marketing to further strengthen relationships with agencies, clients and on-line publishers”.
He paid tribute to Mr John Stewart, who had founded The Internet Bureau business in 2000, and said emitch intended to retain the services of The Internet Bureau’s 12 staff. Mr John Schofield, the current Sales Director, will continue in the business and has been appointed General Manager.
emitch Chairman Stuart Simson said The Internet Bureau represents an exciting and first class acquisition for emitch in terms of a very close fit with its core business, its geographical proximity, and the high potential value it offered shareholders.
Mr Simson said that following the purchase emitch will have sufficient cash reserves to fund all known requirements including on-going dividend payments.