The acquisition was for the sum of £2.5 million paid in cash on completion yesterday and a further payment in cash subject to FEM's profits in the 12 months ending June 2013. The total purchase price will be capped at £6.75 million.
FEM, which is based predominantly in the UK, has built the leading web-based community of HR professionals responsible for the management of expatriates within international corporates, known as Global Mobility professionals. FEM organises exhibitions and networking events and provides an aggregated web-based information service for this community, which is growing rapidly as the globalisation of markets continues. FEM was established two years ago and has built an international membership of approximately 5500 global mobility professionals and suppliers, organised through regional chapters, which are now operating in twenty locations in the USA, Europe and Asia.
FEM's revenues are currently generated principally through sponsorship of its events and also through supplier-member subscriptions. The business presently runs two major events in the UK and two in the USA, in addition to many smaller regional events run through local chapters. Further major regional events are planned as the membership grows. The two vendors, Brian Friedman and Nigel Ayres, will remain with the business following the acquisition. All staff of FEM will relocate to Centaur offices in London.
In its last financial year, to 31 December 2010, FEM generated revenues of £1.0m and ebit of £0.4m. The value of gross assets of FEM at completion amounted to approximately £1.0 million, including £0.6 million of cash. The acquisition is closely aligned with the Group's previously stated strategy for growth, providing strong sectoral linkage to an existing high value professional market and the opportunity for further international expansion. In addition it is expected to exceed all the financial criteria used by the Board to evaluate acquisition investment including an earnings enhancement in the first full financial year ending June 2012
Geoff Wilmot (pictured), CEO of Centaur said: "FEM is an excellent fit with Centaur and I am delighted to welcome Brian Friedman (Founder and CEO of FEM) and his team to the Group. FEM serves a community which is closely linked to that of compensation and benefits professionals, which is a core market for Centaur, served by our leading brand Employee Benefits. There are also further synergies with our portfolio of Business Travel shows. The importance of both short and long term international management assignments is growing rapidly and FEM is well placed to take advantage of the opportunities this presents. Brian, who was formerly head of Human Capital at Ernst & Young, has done an outstanding job of establishing FEM as the leading international brand in this market and we look forward to working with him to grow FEM and to exploit fully the international growth opportunities of our Employee Benefits portfolio."
Brian Friedman, CEO of FEM said: "The FEM has rapidly established itself as the world's premier networking community for all Global Mobility professionals. We are confident that joining Centaur will provide us with the infrastructure to grow our existing activities and the expertise to expand into new areas of operation. The synergies with Employee Benefits and Business Travel could not be a better fit for our aggressive expansion plans."
