- EQT Expansion Capital backs merger of nine German digital communication and marketing agencies
- Enterprise value of EUR 97 million
- New agency, UDG United Digital Group GmbH, to be German leader in digital communication and marketing
EQT Expansion Capital II (“EQT Expansion Capital”) has agreed to back the creation of a leading agency in the field of digital communication and marketing in Germany. The new company, UDG United Digital Group GmbH (“UDG United Digital Group”), is formed through the acquisition of nine independent digital agencies, namely Bassier, Bergmann und Kindler Group, eWolff, Jaron, kmf Group, MP Newmedia, New Identity AG, Nonstop Consulting, SF eBusiness and SUMO.
The nine agencies will maintain their operating independency while simultaneously work as a group to achieve marketing synergies and gain size and reach to present larger clients with a comprehensive digital offering.
“UDG United Digital Group will be capable of delivering tailor-made solutions relevant to the digital future. It is also important to point out that while the combined strength of UDG United Digital Group is crucial, it consists of individual market leaders which are founded and developed by true entrepreneurs”, says Michael Riese, CEO and founder of UDG United Digital Group.
The enterprise value of UDG United Digital Group amounts to EUR 97 million. EQT Expansion Capital will provide different types of loans as well as regular equity. Current owners of the nine agencies will reinvest a substantial part of the proceeds in UDG United Digital Group. The funds provided by EQT Expansion Capital will be used to finance the acquisitions as well as capitalizing UDG United Digital Group for future expansion.
The new combined group will have pro forma sales of around EUR 89 million. It will be headquartered in Hamburg and employ around 500 people.
Jointly, the agencies will be able to cross-sell services and address larger and more complex projects than before. They will also make an attractive partner to large customers seeking a one-stop solution for their digital marketing. The Board of Directors as well as the broader EQT Industrial Network will also be able to create additional opportunities for the company in a fast growing market.
The amalgamation of nine specialized digital services providers makes it possible for UDG United Digital Group to offer a diversified range of digital services that both optimizes communication with the end consumer and supports all aspects of the client’s value chain. Besides services in the areas of Search Engine Marketing (SEM), Search Engine Optimization (SEO), eCRM, Social Media, Affiliated Marketing, eLearning and eBranding, the spectrum of services includes equipping clients with IT-systems or integration of these systems with those of the client (IT Services).
Following the transaction, which is subject to cartel approval, EQT Expansion Capital will hold a minority stake in the equity of UDG United Digital Group with current shareholders, the merging agencies, the Board and management holding the majority.
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EQT Expansion Capital II
EQT is the leading private equity group in Northern Europe with more than EUR 13 billion in raised capital and multiple investment strategies. Together with a superior network of Industrial Advisors, EQT implements its business concept by acquiring or financing good medium-sized to large companies in Northern and Eastern Europe, Asia and the United States, developing them into leading companies. Development is achieved by applying an industrial strategy with focus on growth. Since inception, EQT has invested EUR 9.7 billion in more than 85 companies and exited more than 40. EQT-owned companies have more than 500,000 employees.
EQT Expansion II is a EUR 474 million fund providing capital for privately owned mid-market companies. The core investment focus of the Fund is businesses in need of capital for growth. The financing solutions have equity characteristics, while the owner normally maintains control over the company.
EQT Partners, acting as investment advisor to the managers of each EQT fund, has more than 100 investment professionals with an extensive industrial and financial competence. EQT Partners has offices in Copenhagen, Frankfurt, Helsinki, Hong Kong, Oslo, London, Munich, New York, Shanghai, Singapore, Stockholm, Warsaw and Zurich.
More information can be found on www.eqt.se