Next 15 buys B2B digital agency Velocity Partners

AIM-listed digital communications group Next 15 announced the acquisition of UK-based B2B digital agency Velocity Partners for an initial consideration of £5.9m.

Next 15 said around £4.9m of the consideration will be satisfied in cash, with the balance to be satisfied through the issue of 251,966 new ordinary shares in the company. Further consideration may become payable based on the average profits of Velocity for the years ending 31 April 2018, 31 January 2019, 31 January 2020, 31 January 2021 and 31 January 2022.

Velocity was founded in 2000 by Doug Kessler and Stan Woods, who will remain at the business following its acquisition, which is is expected to be earnings-enhancing in the current financial year.

Clients include multi-national technology groups such as Sprint, Xerox and Informatica, and around 70% of Velocity's revenues came from US-based clients in the financial year ended 30 April 2017, during which it reported net revenues of £5.2m, adjusted pre-tax profit of £1.35m and net assets of £2.1m.

Next 15's chief executive officer Tim Dyson said: "Data-driven content marketing is the fastest growing part of the marketing mix right now. This is a key area of investment for us going forward. Velocity has built an impressive business with a strong B2B focus that means it will placed to achieve its ambitions in the US and UK markets. At its core is a strong management team that shares our vision and values. We are very excited to work with them to help them achieve their plans.”

Velocity founder Stan Woods said: "Velocity has always been fiercely independent. But as soon as we met the team at Next 15, we could see that this was the right home for us. We’re thrilled to be a part of such a strong group.”

At 0850 BST, Next 15 shares were up 2.2% to 421p.