Ascential to buy US-based MediaLink for up to $207m

FTSE 250 business-to-business media company Ascential has agreed to buy US-based media advisory and business services provider MediaLink for an initial cash consideration of $69m and future earnouts, in a deal that is expected to enhance earnings per share in the first full year of ownership.

Founded in 2003, MediaLink serves the consumer goods and services segment, which Ascential already addresses through products such as WGSN, Cannes Lions and Money20/20. It has worked with Cannes Lions' customers since 2011 where it hosts content and client-oriented meetings and events as part of the official fringe.

Founder Michael Kassen will continue to run the business.

Ascential said MediaLink will further strengthen and accelerate its strategy of owning market-leading brands in selected complementary marketplaces and offer trusted information and valuable connections to businesses.

In 2016, MediaLink generated unaudited revenue of $54m and adjusted pre-tax profit of $14m, with year-on-year growth of 29% and 24% respectively, and gross assets of $11m at the end of the year.

The initial consideration will be funded from Ascential's cash reserves and existing borrowing facilities and futures earnouts will be payable over the period to February 2021 based on the adjusted core earnings of the business for the three years 2017 to 2019 and are expected to total between $42m and $62m.

The total aggregate consideration, including initial consideration and earn out payments, is capped at $207m in the event that stretching profit targets are reached.

Chief executive officer Duncan Painter said: "MediaLink is a leader in its industry, with a strong and very visible brand presence in the US. MediaLink is an excellent fit with our existing Ascential offering and I am confident we can help accelerate MediaLink's business into new markets by using our assets and infrastructure over the coming months and years. I see synergies between MediaLink and our portfolio of products to significantly help accelerate our existing businesses and create additional value for shareholders."

The deal is expected to complete within the next month.

At 1252 GMT, the shares were up 1.7% to 294.90p.