1. Acquisition of the French leader in micro-payments
Hi-Media has just acquired the Eurovox group, owner of the Allopass platform which is a key player in micro-payments. In 2005, Eurovox generated a consolidated sales figure of €28.3 million.
Allopass is the uncontested leader in micro-payments over the Internet in France and Belgium. This micro-payment platform offers its solutions to several tens of thousands of Internet sites and, as such, generates more than 1.8 million transactions each month with approximately 900,000 customers.
The customers of Allopass include such prestigious sites as those of Le Figaroscope , Quid, Infogreffe, Psychologies, as well as those of the La Rivière press group, which generated a sales figure of €22.9 million in 2005
By bringing together Allopass and its own Mediapass solution, developed internally since 2004, Hi‑Media now has more than one million users of its micro-payment solutions, generating more than 2 million transactions each month.
2. Implementation of strong synergies around two main business lines
The merger of the teams will allow for significant and immediate synergies:
- while relying on the geographical establishment of Hi-Media, the group will focus on the international deployment of Allopass-Mediapass;
- as such, all partner sites of the Allopass platform will be proposed the other Hi-Media audience monetization services related to advertising, sponsored links and direct marketing. As such, the Com Click and TKN networks will have a potential of several thousand additional affiliated sites.
Moreover, the Eurovox group is also active in the hosting of interactive voice servers (audiotel) and SMS servers, for example for astrology services or the RATP (Paris transportation authority). These services may be extended and proposed to the Internet sites of Hi-Media customers that wish to offer mobile multimedia services.
This acquisition therefore strengthens Hi-Media’s overall European leadership positioning in audience monetization over the Internet, around its two main activity poles: advertising and micro-payments.
3. A significant change of size and an accretive acquisition
This external growth operation was carried out in cash, in the amount of €18.5 million.
With this acquisition, which will be consolidated in the Hi-Media accounts as of February 2006, the company is more than doubling in size. Indeed, in pro forma, the group generated a sales figure of €53.1 million in 2005. On this basis (while only consolidating the Eurovox activity over 11 months in 2006), the Hi-Media group is now increasing its 2006 sales figure objectives to more than €70 million.
This operation should also be accretive for the Hi-Media shareholders. Indeed, for a sales figure of €28.3 million, the Eurovox group generated net earnings before taxes of €1.8 million, reduced to €0.8 million after taking into account, during the 2005 fiscal year, of a one-time charge related to the change of accounting methods.
In 2006, once the Eurovox teams have been integrated and the economies of scale fully implemented, Eurovox should produce an operating profitability in excess of 10%, i.e. an operating income of more than €3 million.
Hi-Media will give a more detailed update on the group’s 2006 business and profitability prospects at the time of the publication of its annual results (8 March 2006)
