Tree set to 'grow' within marketing services group Cagney
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UK research and data analysis firm Tree has been bought by marketing services group Cagney in a £1m cash-and-shares deal.
Founders Matthew Bayfield and Steve Mattey sold their 60% holding for £394,941 cash and 5.48m new Cagney shares. They are also in line for further performance-related payments.
Minority shareholder Archibald Ingall Stretton (AIS) sold its 40% stake for £405,067.
AIS had been an investor in Tree since it was formed in 2001, and Bayfield is a former head of data planning for the marketing communications agency.
Despite working for some major brands, including mobile operator O2, luxury goods store Fortnum & Mason, and car firms Skoda and Volkswagen, Tree is still relatively modest in revenue terms. Unaudited accounts for 2006 show net fee income of £1.8m and profit before interest and tax of £200,000.
Bayfield told Research that gaining access to Cagney's network of agencies – Chick Smith Trott, Brandaid, Cubo, and The Media Foundry – was key to Tree's growth strategy going forward, helping to introduce its work to a wide range of potential clients.
However, Bayfield and Mattey also intend to grow the business non-organically, by making acquisitions or investing in new business ideas.
A business plan for one potential new venture – research viewing labs that have a more natural, homely feel to them, in the vein of Home Sweet Home in London's Oxford Circus – is already before the Cagney board. Bayfield hopes to get the go-ahead to launch this summer.
“We're excited by the opportunities for Tree to grow and expand,” he said.
Cagney was formed in 2005 by chief executive Paul Simons, the former CEO of ad agency Ogilvy & Mather's London office. It was listed on the Alternative Investment Market in November the same year.
Simons said: “The addition of Tree to the group significantly strengthens Cagney's offering to clients. The market environment continues to move towards greater reliance on quantified consumer intelligence and insight.”
Author: Brian Tarran
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