Be Heard Group PLC (LON:BHRD), the digital marketing services group, has today announced changes to the earn-out arrangements (the “Earn-Out”) in regard to MMT Limited (“MMT”); the user experience, design and build agency, originally acquired by the Company in May 2016 (the “Acquisition”).
The terms of the Earn-Out have been changed from a performance basis to fixed annual payments of £3.233m for each of the years 2017, 2018 and 2019, subject to MMT’s revenue in each of the respective years being greater than that of 2015, with such amounts remaining payable as to 65% in cash, 35% in shares. Be Heard has the option to substitute loan notes repayable after 12 months in place of any share consideration. All other material terms of the original Acquisition agreement remain unchanged.
Any shares due to be issued will be priced at the higher of 3.55 pence and the average of the middle market closing prices in the 12-month period prior to the relevant payment date.
Consideration paid to date totals £7.8m, comprising initial consideration of £5.1m paid upon original completion of the Acquisition and an additional payment of £2.7m. The effect of the amendment of the Earn-Out is to bring the total deal cap down from a maximum potential consideration of £20.5m to a fixed consideration of £17.5m.
In the year to 31 December 2016, MMT generated profit before taxation of £700k.
The adjustment to the Earn-Out constitutes a related party transaction under Rule 13 of the AIM Rules for Companies. The directors consider having consulted with N+1 Singer, as the Company’s nominated adviser, that the terms of the transaction are fair and reasonable insofar as the Company’s shareholders are concerned.
Peter Scott, Executive Chairman of Be Heard, commented:
“We see this as a very positive move that benefits both our shareholders and our partners at MMT.”
Gresham House Strategic PLC has a total interest of 10.6% in Be Heard Group PLC correct as of 31 July 2017 month end NAV announcement, released 01 August 2017
