NEWS4 April 2011

YouGov makes US acquisition as first-half revenue grows


US— YouGov has acquired Oregon-based market research consultancy Definitive Insights in a deal that could eventually be worth £3m.

Definitive Insights was formed in 2009 by former Research International USA chief executive Doss Struse and specialises in providing research services to companies in IT, energy, pharmaceutical, and financial services. Struse and the firm’s other 14 staff will all become part of YouGov’s US team.

YouGov said that the deal would result in increased earnings in the first full year after the acquisition and give access to new blue chip clients in “key” sectors.

Struse said: “YouGov has demonstrated internationally its leadership in online research quality and accuracy and has created a platform for research excellence. Becoming part of YouGov gives Definitive Insights scale and global reach, which are important to our key clients.”

YouGov CEO Stephan Shakespeare (pictured) added: “The excellent reputation of the founders and their staff and the high quality of their work is reflected in a superb client list which they have built up rapidly since DI was set up.”

The acquisition’s initial price is £0.6m, but will rise to £3m depending on Definitive Insights’ performance over the next two years.

News of the deal coincided with the release of YouGov’s interim results for the six-month period ending 31 January.

Turnover was up 27% to £27m and adjusted operating profit jumped 57% to £2.2m. Adjusted profit before tax was up 64% to £2.3m, while reported profit before tax was up to £0.4m following a loss of £0.5m last year.

The firm said that the US business accounted for 26% of group turnover, making it the firm’s largest region with revenue totalling £7.1m. Revenue was up 19% in the UK to £6.4m and by 18% to £3.9m in Scandinavia.

In the Middle East, revenue fell 3% to £3.7m from £3.8m as a long-term contract was scaled down. The firm said that although the current political situation across the region “clearly makes the outlook more uncertain”, the value of its ability to provide fast information on the views of Middle Eastern citizens would be beneficial.

The German business saw revenue fall 12% from £7.3m to £6.4m, which was attributed to increased competition in the financial services sector. YouGov said that the sale of employee research subsidiary Great Place to Work to former Germany CEO Andreas Schubert gave the firm the opportunity to re-assess its leadership in the country, and that the appointment of a new CEO for Germany was imminent.

Reflecting on the results, Shakespeare said: “YouGov has grown revenue and profits during the first six months of this financial year, as expected. Harrison, our recent US acquisition, has performed very well, extending our reach into the US corporate research market and helping to make the USA our largest market by revenue. Our UK, Middle Eastern and Scandinavian businesses have also gained market share and increase profits and we expect these positive trends to continue. In Germany the planned performance improvement programme is under way with a new CEO to be appointed soon but we recognise that it’s challenging.”