Incepta continues global expansion with £17.6m acquisition spree in Italy and US

Incepta group, the international marketing and communications company, yesterday continued its acquisition spree with the purchase of three businesses for up to £17.6m.

The group is taking over the Italian marketing company Gunpowder, MSI Strategic Communications, a Chicago-based communications consultancy, and Admaster, a New York-based marketing communications firm.

Over the last 18 months Incepta has bought businesses in Germany and the US, as well as making in-fill acquisitions in the Netherlands and elsewhere.

Richard Nichols, the chief executive, said Incepta would continue to build the business both organically and through acquisitions. "We are seeking a global footprint routed in local excellence," he said.

David Grimbley, an analyst at UBS Warburg, said the deals were in line with the company's strategy of building up its international network, which ultimately will give it a competitive advantage. But he said: "Incepta will have quite significant earn-out payments to make. In the last recession a number of companies came unstuck with that policy."

Mr Nichols said the company has a strong balance sheet, coupled with a £75m bank facility and a cash generative business. "A lot of businesses entered the last downturn with a stretched balance sheet," he said. "We have managed ourselves to make sure we are not in that position."

Gunpowder, which will trade as Citigate Gunpowder and includes companies such as Cisco Systems, Compaq and Philips on its client list, will be acquired for an initial £5.4m but the figure could rise to £11.9m depending on its performance. The company's turnover has seen compound growth of more than 50 per cent over the last five years and in the year to 31 December 2000, pre-tax profits were 916m Italian lire (£0.3m).

MSI and Admaster will be bought for an initial £2.3m cash. Final consideration will be payable in cash and shares, with a total maximum payable of £5.7m, depending on their future financial performance. Both businesses will be merged with Incepta's existing Citigate offices.