Date 17/09/2018 Heading IMS in talks to acquire within Poland, elsewhere in Europe – CFO
IMS [WSE:IMS], a Polish sensory marketing company, is in acquisitions talks with domestic and other peers within Europe, according to Chief Financial Officer Piotr Bielawski.
The PLN 105m (EUR 24.4m) market cap company is looking for suitable targets in its core sensory marketing (audiomarketing, aroma marketing and digital signage) segments to scale up. It is in talks with select targets in the Benelux, the Scandinavia and the Czech Republic/Slovakia, aside from domestic ones, he said. While preliminary agreements with one or two Polish prospects are possible this year, talks with foreign targets are not advanced and no international deal is likely this year. Targets abroad have sales in the EUR 2m-EUR 8m range, while the potential Polish add-ons are significantly smaller.
IMS has the capacity to acquire targets with valuation of PLN 50m-PLN 60m. For acquisition financing, the company would rely primarily on bank debt, the CFO said, noting that it is virtually debt-free. IMS also has a stock-swap program in place, allowing it to sell up to 5m new shares, a 15% increase in the number outstanding, to pay for targets. However, its core shareholders prefer not to dilute their stakes excessively and are keen on keeping the existing generous dividend policy in place.
The company wants to acquire more than 50% stakes, with the exception of deals involving smaller, early-stage targets, where it could settle for a smaller stake to limit downside risks. It always insists on earnouts in order to keep ex-owners fully engaged in the business. As for valuation metrics, IMS is looking to make deals at multiples below its own in order not to dilute shareholder value, Bielawski said.
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