Alterian to pay £18m for web content management firm

by Paul McNally, Brand Republic 19-May-08, 14:10

LONDON - Marketing software firm Alterian has confirmed it is to buy web content management provider Mediasurface in a cash and stock deal worth around £18m.

The boards of the two companies said on Friday they had agreed an offer for Mediasurface, priced at 15p a share -- a 150% premium on the web firm's 6p price before news of the tie-up emerged last month.

Although the price represents a significant premium, Alterian said the acquisition was an important strategic development for the firm, which is looking to boost the online marketing side of its operations.

The Alterian chairman, Keith Hamill, said today: "The acquisition of Mediasurface will add complementary technology and products, which when integrated would further broaden the Alterian product base and significantly increase the proportion of revenues arising from the online sector.

"The sale of Mediasurface products would also benefit from Alterian's strong distribution in North America. This is an important strategic development for Alterian which the board considers will accelerate its success."

Alterian's client base includes General Motors, HSBC, Dell and Vodafone. The Bristol-based company was founded in 1997 and has offices through North America and Europe.

Mediasurface provides content management services to clients including Philips, Yell and National Express.

The bringing together of the two companies will create a group with annual revenues of around £30m.

In its end of year results, published today and covering the 12 months to the end of March, Alterian said revenue rose 38% to £19.3m; pre-tax profits doubled from £2m to £4m in the same period.

Mediasurface, which put out its half-year results this morning, also saw increases in group revenue, up 16.5% year on year to £7m in the six months to the end of March.

The company made a pre-tax loss of £110,000 -- down from £380,000 in the previous year.

Mediasurface shares rose on Friday on news of the approved deal, which is now subject to a shareholder vote. Its share price closed at 11.25p on Thursday night and climbed as high as 14p on Friday, opening at that level this morning.