Navis acquires marketing units from Australia's Photon Group

Navis will acquire five of Photon's agencies - Demonstration Plus, Club Sales & Marketing, Powerforce, Ausrep and REL- as well as two closely-related businesses - Artel and Retail Insight - leaving the holding group with 14 agencies and an excess cash balance of more than $15 million. Remaining in its portfolio are prized advertising and marketing firms including Naked, BMF and BWM.

ASX-listed Photon has sold 13 businesses in the past year, including its deal with Navis. The collective transactions have generated $233 million, with assets sold at an average of 7.5x EBITDA. These divestments were made in an effort to minimize the group's debt, and took place alongside a recapitalization process and a corporate restructure.

"At the beginning of the 2011 financial year, Photon was an eclectic mix of 45 highly uneven business units in five divisions. The company carried an entirely unsustainable debt load of $450 million," Photon CEO Jeremy Philips said in a statement. "During the course of the past year Photon has been transformed through this transaction, other divestments, a recapitalisation, and a corporate restructure. We have now transformed Photon into an unleveraged, focused, transparent company."

The seven businesses that Navis will acquire collectively contributed $115 million of net revenue and $21 million of EBITDA in the 12 months to 30 September 2011, the company noted. They contributed 35% of Photon's 2011 fiscal year pro forma net revenue, and 39% of pro forma operating company EBITDA.

The deal is slated to be completed on November 30, pending approvals.

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• Topics
• Australasia
• Media
• Navis Management
• Australia
• TMT