Public relations and healthcare company Huntsworth Plc (HNT.L), Wednesday said it is buying a US-based lobbying firm Dutko Worldwide Holdings Inc, for an initial payment of US$33.6 million or GBP 20.4 million. The acquisition is expected to be "enhancing" to the company's earnings in its first full year of consolidation.
London-based Huntsworth said the total payment can increase on performance, reaching US$44.6 million for a yearly profit growth of 10% over a three-year period. The initial payment comprises US$22.4 million of Huntsworth's shares at completion and US$11.4 million shares at the end of 2010.
The company will also assume Dutko's net debt of US$9.7 million, according to the terms of the agreement.
The acquisition of Washington-based Dutko, which has a limited overlap with existing Huntsworth clients, would add U.S. lobbying and government relations services to Huntsworth existing public affairs clients.
As both companies share a health-care sector specialization, a timely cross marketing of US lobbying services are expected to help Huntsworth's healthcare clients across the Group.
Dutko's key clients include Abbott Laboratories, GlaxoSmithkline and Johnson Controls, with 90% of its revenues coming from the U.S. For the year to Dec. 31, 2008, Dutko reported pretax profit of US$5.6 million, on revenues of US$33.3 million.
Huntsworth also said the transaction adds a new Chicago- based investor to its portfolio, Lake Capital Partners LP, giving it a 7% of the Huntsworth share capital.
HNT.L last traded at 66 pence, gaining 4 pence or 6.45% on the London Stock Exchange.
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