ESPI 11/2021 Signing of an agreement containing framework conditions of transaction regarding acquisition of an entity from the Issuer’s industry

Management Board of IMS S.A. (“Company”, “Issuer”) announces that today it signed an agreement setting out the framework conditions for a transaction (“term sheet”) concerning the acquisition of 100% of the shares of Audio Marketing Sp. z o.o. with its registered office in Koszalin (“AM”). The parties to the term sheet are: IMS S.A. as the purchaser and five natural persons holding jointly 100% of the shares in AM as the transferor and AM itself.

AM is a company which has been operating for several years in the audio-marketing industry, whose business model is based on delivering music services to points of sale. AM has over 6,000 locations to which it delivers subscription audio services. Following the acquisition, the Issuer’s Capital Group will have a total of approximately 26,000 subscription locations, significantly increasing the number of locations it owns and diversifying its subscription revenue sources. The acquisition of AM is a very important step for the Issuer aiming at consolidation of the sensory marketing market in Poland and even stronger strengthening of the Issuer’s position as the market leader in Poland. The Management Board of the Issuer sees numerous synergies resulting from the acquisition of AM. These synergies include first of all the possibility to introduce to some of AM’s clients a wide portfolio of IMS Group services – aromamarketing, Digital Signage, audio advertising services (revenue synergies). There are also significant opportunities for cost savings (cost synergies).

The acquisition of 100% of shares in AM will be made under the earn-out model. A very significant part of the consideration to the existing owners of AM depends on the profits that AM will generate for the IMS Group after the acquisition. The key provisions of the term sheet are as follows:

  1. The Issuer shall pay to the existing owners of AM, by virtue of the acquisition, by July 1, 2021 (the agreed maximum date for signing the final investment agreement), all the Shares (representing 100% of the share capital of the Company) – a total gross price of PLN 4,250,000.00. The parties agree that the whole or part of the above amount may be settled in shares of IMS.
  2. Additional payment for shares depends on the net profit earned in one of the periods (“settlement period”): 01.07.2021-30.06.2022 or 01.10.2021-30.09.2022 or 01.01.2022-31.12.2022. The choice of the period will be made by the existing owners of AM before signing the investment agreement. In each of the above periods AM will already be within the structures of the IMS Group. This payment varies between PLN 1,550,000.00 gross to be distributed to all existing owners of AM with a net profit of at least PLN 750,000.00 to PLN 6,500,000.00 gross to be distributed to all existing owners of AM with a net profit of at least PLN 1,750,000.00.

For the purposes of the calculations indicated in para. 2 above, to determine the net profit, calculated in accordance with IFRS, all cost synergies following the acquisition by IMS of shares in AM are taken into account, as well as the part of the profit resulting from the sale of products and services of the existing IMS Group, i.e. from the sale of advertising, aromamarketing and digital signage services. The portion of the net profit derived from the sale of products and services of the existing IMS Group may not exceed 20% of the net profit derived from the existing operations of AM.

The Management Board of the Issuer estimates that the sum of payments mentioned in points 1 and 2 will amount in total to approximately 5-8 times AM’s net profit for the IMS Group in the settlement period.

  1. In case when AM does not generate in the settlement period at least PLN 750,000.00 net profit calculated according to the rules described above but at the same time generates net profit equal or higher than PLN 500,000.00, the existing shareholders of AM will pay to IMS a guarantee amount of PLN 500,000.00 in total. In case of generating the net profit in the settlement period lower than 500,000.00 PLN the existing shareholders of AM will pay to IMS the guarantee amount in total amount of 1,000,000.00 PLN. All the aforementioned amounts are secured by notarial statements on submission to enforcement.
  2. In order to further motivate the existing shareholders of AM to achieve the best possible financial results in subsequent years, the Issuer will make an additional payment for the previously acquired Shares, for the periods specified below, to be distributed among the existing shareholders of AM:

i.       01.01.2023-31.12.2023 – 17,5% of AM net profit for this period,
ii.       01.01.2024-31.12.2024  – 17,5% of AM net profit for this period,
iii.      01.01.2025-31.12.2025  – 17,5% of AM net profit for this period,
iv.      01.01.2026-31.12.2026  – 17,5% of AM net profit for this period,

Net profit means net profit calculated in accordance with IFRS, without the exclusions described in para 2 above.

  1. The existing shareholders of AM are guaranteed employment, regardless of its legal form, for a period of 5 years from the signing of the relevant investment agreement. Two existing members of the Management Board of AM (who are also existing shareholders) are guaranteed a seat on the Board for the aforementioned period of 5 years. The Issuer has the right to appoint a majority of the Management Board in AM. The remuneration of the existing partners after the merger is determined based on the average remuneration of these persons for the years 2019 and 2020.
  2. In the event that AM or any of the existing shareholders does not proceed with the conclusion of the relevant investment agreement on the terms agreed in the term sheet document for any reason, each of the existing shareholders of AM shall pay, independently of the others, to the Issuer a guarantee penalty of PLN 150,000.00. The total guarantee penalty payable by all existing shareholders amounts to PLN 750,000.00. The above claims are secured by notarial statements on submission to execution. Additionally, the above claims are guaranteed for the total amount of PLN 750,000.00 by AM company (notarial statement on submission to enforcement).
  3. Signing of the final investment agreement by the Issuer will depend on the absence of any irregularities during due diligence, absence of any material adverse change in the operations of AM at the time of signing the final investment agreement and approval of the transaction by the relevant corporate authorities of the Issuer. The Issuer may withdraw from the transaction without any consequences if the Management Board of the Company does not obtain appropriate corporate approvals (approval of the Supervisory Board for the aforementioned transaction) or if the due diligence examination reveals material irregularities in the operations of AM or material inconsistencies between the information and documents provided to the Issuer to date and the actual state of affairs. In case of resignation for any other reason, the Issuer is obliged to pay the total guarantee amount to the existing shareholders of AM in the amount of PLN 750,000.00. The Issuer did not make a statement on submitting to execution.

Selected financial data of Audio Marketing Sp. z o.o. (prepared in accordance with the Accounting Act, not audited) for the last two completed balance sheet years, i.e. 2020 and 2019, are as follows:





in thousands of PLN

in thousands of PLN




























The acquisition of Audio Marketing Sp. z o.o. fits perfectly into the development strategy of the Issuer’s Capital Group. It will add over 6,000 subscription locations to the Group’s customer portfolio, largely medium- and small-format FMCG locations not significantly affected by COVID-19 restrictions.  AM has done very well – as did APR Sp. z o.o., which was acquired by the Issuer in October 2018. – has coped with the coronavirus crisis, posting earnings growth at every level and very good liquidity in 2020. The AM acquisition itself is completed on a model and terms almost identical to those of APR Sp. z o.o.

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