Next Fifteen buys stake in market research agency HPI

AIM-listed digital communications group Next Fifteen has bought an 85% stake in London-based market research agency HPI Research through its data and insights subsidiary Morar Consulting, in a deal that is expected to be immediately earnings-enhancing.

The initial consideration is just over £1.28m, which is comprised of £800,000 for the net assets acquired on completion and £482,000 as an upfront payment.

The remaining 15% stake in HPI will be acquired by Morar in June 2018, with the consideration based on HPI’s operating profit for the financial year ending 31 January 2018.

For the year to the end of September, HPI – whose largest clients include Sainsbury’s, Argo and Heineken – generated revenues of £3.405m and adjusted earnings before interest, taxes, depreciation and amortisation of £230,000.

Chief executive officer Tim Dyson said: “This acquisition is in line with Next 15’s strategy of growing its data revenue to 20% of group revenue in the next five years. HPI brings both talent and a history of high quality market research. Meanwhile Morar has developed a technology platform, which provides an end-to-end market research capability for its clients which enables quicker and more accurate research.

“We believe that a combination of HPI’s team and established client base with Morar’s technology platform will create a better solution for HPI’s customers and enable Morar to reach new customer segments.”

At 0938 GMT, the shares were up 4.8% to 330p.