UDG United Digital Group formed with backing from EQT
Fraser has acted as exclusive financial advisor to UDG United Digital Group GmbH on its acquisition of nine digital communications and marketing agencies to form the leading digital marketing group in Germany. The new combined group includes Bassier, Bergmann und Kindler Group, eWolff, Jaron, kmf Group, MP Newmedia, New Identity AG, Nonstop Consulting, SF eBusiness, and SUMO, and will have pro forma sales of around EUR 89 million. It will be headquartered in Hamburg and employ around 500 people.
The transaction was sponsored by EQT Expansion Capital.
Hamburg – May 19, 2011. EQT Expansion Capital II (“EQT Expansion Capital”) has agreed to back the creation of a leading agency in the field of digital communication and marketing in Germany. The new company, UDG United Digital Group GmbH (“UDG United Digital Group”), is formed through the acquisition of nine independent digital agencies, namely Bassier, Bergmann und Kindler Group, eWolff, Jaron, kmf Group, MP Newmedia, New Identity AG, Nonstop Consulting, SF eBusiness and SUMO.
The nine agencies will maintain their operating independency while simultaneously work as a group to achieve marketing synergies and gain size and reach to present larger clients with a comprehensive digital offering.
“UDG United Digital Group will be capable of delivering tailor-made solutions relevant to the digital future. It is also important to point out that while the combined strength of UDG United Digital Group is crucial, it consists of individual market leaders which are founded and developed by true entrepreneurs”, says Michael Riese, CEO and founder of UDG United Digital Group.
The enterprise value of UDG United Digital Group amounts to EUR 97 million. EQT Expansion Capital will provide different types of loans as well as regular equity. Current owners of the nine agencies will reinvest a substantial part of the proceeds in UDG United Digital Group. The funds provided by EQT Expansion Capital will be used to finance the acquisitions as well as capitalizing UDG United Digital Group for future expansion.
The new combined group will have pro forma sales of around EUR 89 million. It will be headquartered in Hamburg and employ around 500 people.
Jointly, the agencies will be able to cross-sell services and address larger and more complex projects than before. They will also make an attractive partner to large customers seeking a one-stop solution for their digital marketing. The Board of Directors as well as the broader EQT Industrial Network will also be able to create additional opportunities for the company in a fast growing market.
The amalgamation of nine specialized digital services providers makes it possible for UDG United Digital Group to offer a diversified range of digital services that both optimizes communication with the end consumer and supports all aspects of the client’s value chain. Besides services in the areas of Search Engine Marketing (SEM), Search Engine Optimization (SEO), eCRM, Social Media, Affiliated Marketing, eLearning and eBranding, the spectrum of services includes equipping clients with IT-systems or integration of these systems with those of the client (IT Services).
Following the transaction, which is subject to cartel approval, EQT Expansion Capital will hold a minority stake in the equity of UDG United Digital Group with current shareholders, the merging agencies, the Board and management holding the majority.
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