Having completed buy-outs of Press Gazette and the New Statesman magazines this year, entrepreneur Mike Danson has announced a reverse takeover bid for AIM-listed digital direct marketing agency TMN Group. Two statements to the market late on Friday confirm that Danson, who runs Progressive Media and made about £100 million from founding and selling Datamonitor, has reached a conditional agreement to take a 85 percent stake in the company.
TMN makes the majority of its revenues from affiliate marketing and email marketing, though it also has digital publishing and research divisions — in 2008 it made revenues of £22.5 million, a 40 percent year on year increase, and profits of £3.6 million (release, pdf). But according to FT.com, Danson reckons TNM could make revenues of between £65 and £70. An extraordinary general meeting will be held on June 24 to vote on the deal — though shareholders representing 47.2 percent of the company have already signalled their approval.
The incentive for TNM directors to give over control? TNM’s statement in the release says the economy has hit it hard and cost-saving measures have “been outweighed by the considerable decline in email display advertising revenues”. So thanks to Danson, TNM hopes to get a broader revenue base, better financial stability and debt flexibilty, faster growth and an “enhanced” management team including Danson.
Danson himself is a rare media owner who seems to be encouraged to seal more M&A deals in the recession. He says in the release that an “enlarged group will be better placed to trade successfully in the challenging market, take advantage of increased scale [and will have] greater financial stability and flexibility…”