IMSG Plc acquires Candid Marketing (India)

International Marketing & Sales Group Plc (IMSG) has an approximate market capitalisation of £70 million. It plans to purchase the entire issued share capital of Candid Marketing in multiple trenches

International Marketing and Sales Group Plc (IMSG), the emerging markets focused sales and marketing company, has acquired a majority stake in Candid Marketing. IMSG will purchase Candid’s entire issued share capital in multiple trenches for an undisclosed amount, the consideration at each stage to be linked to the enterprise value of the company.

IMSG’s clients include multinational and first-tier local companies operating in FMCG, telecommunications, retail trade, banking and finance, automotive, consumer electronics and pharmaceutical industries. The group has an approximate market capitalisation of £70 million.

Candid Marketing is considered a pioneer in the below-the-line marketing services industry and it is also among the leading promotional marketing services companies in India. Candid implements the marketing and sales programmes for international brands and it has a presence in India across 100 cities. It has branches in six major cities in the country.

Candid’s major clients include Motorola, Pepsi, Cadbury, Nokia, ITC Foods, the UB Group, Revlon, Max New York Life, Hutch, Sony Television, Unilever, Castrol, L’Oreal, Glaxo Smithkline, HSBC and ING.

This acquisition will further elevate the expansion of IMSG’s operations in India and will open additional acquisition opportunities in the region. IMSG will also introduce its international products, including Key Account Merchandising (KAM) and Store-wars, in the Indian market with the acquisition of Candid Marketing.

For the record, Key Account Management is a well-organised outsourced sales service that enables suppliers to enhance their efficiency and share costs of retail sales operations. Store-wars is a dynamic, live action business simulation, in which participants take charge of a $100 million virtual company, develop strategies, negotiate and make decisions that determine its success.

Subject to earlier completion in certain circumstances, IMSG will acquire the remaining shares in Candid by 2010. The purchase price for these shares will be based on a multiple of the company’s net profit after an independent International Financial Reporting Standard (IFRS) audit.

Commenting on the acquisition, Gregory Thain, chairman and chief executive officer, IMSG, says, “The decision to acquire Candid Marketing was arrived at after discussions with 25 other Indian businesses and after considering 60 other possible prospects. Candid has a track record of working with high-profile brands. In our long-term strategy for our organisation, it provides the vital building block for growth and emerging markets as a whole.”

Samarjit Singh, founder and managing director, Candid Marketing, says, “Candid Marketing is capable of becoming an exciting growth business in IMSG. With a complementary mix of products and services, both the organisations have strong cultural similarities. We will work closely with IMSG to achieve a smooth integration, with emphasis on realising the benefits of the many synergies existing in the businesses.”

Atul S Nath, chief executive officer and co-founder, Candid Marketing, adds, “This new alliance will furnish insightful learnings with new products fuelling the growth.”

Manish Mehta, chief operating officer and co-founder, Candid Marketing, believes, “With this acquisition, the market will see the emergence of a world-class retail focused dimension that will fundamentally offer better value to the clients. It will also redefine the parameters of promotional marketing in India.”

The transaction for this acquisition was coordinated by Sanjay Sondhi of Pegasus Investments & Advisory in New Delhi. The executives at Candid Marketing will continue in their posts along with three directors to be appointed by IMSG. Gregory Thain, executive chairman, IMSG, will join the board as chairman.

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