Agora signed a share purchase agreement to acquire shares of Trader.com (Polska)
14-05-2008
Press release
On May 14th Agora signed a share purchase agreement with Trader Media East Limited controlled by leading Turkish media group Hurriyet, to acquire all of the shares in Trader.com (Polska) for US$ 54.350.000 (equivalent to 119.542.825 PLN). Trader.com runs real-estate and automotive classified advertising through classified Internet vortals and press publications.
- Our investment in Trader.com (Polska) is in line with our growth strategy to further develop our media offer in the fastest growing areas of the advertising market. One of our strategic objectives is to become a leader in the largest and the fastest growing classified categories. We believe that the combination of Agora's strong position in print classifieds and Trader.com's leading classified services online, its proved online technology and diverse client base is a substantial step forward in achieving this goal. We are confident that Trader.com's team experience coupled with Agora's sales, promotion and content potential will help create new value in the advertising market - said Marek Sowa, Agora's CEO.
Agora's investment in Trader.com is in line with the Company's major strategic objectives to further develop its thematic media offer in the fastest growing areas of the advertising market. Real estate and automotive advertising are among the largest and the most accelerating market categories (both in print and online). Agora estimates that the three-year CAGR will amount to about 33% for real-estate and 17% for automotive online advertising (display and classifieds). While Agora's overall position in both categories remains strong, its Internet standing needs further expansion (estimated current market share in online display and classified advertising of 14% and 7%, respectively). In the context of the fast growing Internet advertising market, the Company believes that the acquisition of Trader.com will ensure Agora's long-term leadership in real-estate classifieds and will allow it to build stronger position in the automotive category. This is crucial to achieve Agora's strategic objective of being one of the leading players in each of the key classified categories.
By taking over Trader.com Agora gets access to proved online technology and an experienced and talented team who will play a major role in the process of developing the Company's on- and offline offer in the classified advertising and other market segments. Agora believes that Trader.com product offering will be further leveraged through cross-selling and cross-promotion opportunities created by association with a large multimedia enterprise.
The Company believes that it is uniquely positioned to leverage Trader.com's strengths in order to build long-term shareholder value. The valuation reflects the current conditions in the market for corporate control over interesting Internet assets and takes into account all potential synergies which should arise from a joint co-ordinated development strategy.
Present in Poland since 1991, Trader.com is predominantly active in real-estate and automotive classified advertising through 4 classified Internet vortals and 6 press publications. Over the past few years, the company managed to successfully develop its online activities which currently account for more than a half of its total revenues. Trader.com's key Internet brands include the leading online classified services in the Polish market, i.e. Domiporta.pl (real-estate/home) and Autotrader.pl (automotive), as well as Tabor24.pl (machinery, trucks and utility vehicles) and Kupsprzedaj.pl (general classifieds). The company's print operations comprise local automotive and real-estate publications.
In 2007 Trader.com generated revenues of PLN 18.5 million. It had about 20% and 7% share in total online real-estate and automotive advertising (display and classifieds), respectively. Due to confidentiality obligations, more information on the company may only be revealed after the closing.
The transaction does not entail the acquisition of an international IT competency centre ("ICC") used for TME operations outside of Poland which was separately managed but located within the structure of Trader.com and was transferred to a separate legal entity (TMECC Sp. z o.o.) which is now not related to Trader.com and will remain the property of Pronto Invest. Pronto Invest, as well as TME have given a number of representations and warranties in respect of the state of Trader.com and the extraction of ICC; the breach of some of these representations and warranties can trigger penalties in amounts up to the purchase price, in which case compensation in excess of the amount of the penalty cannot be sought. The Company guarantees payment of the purchase price if all the closing conditions are met.
The share transfer is expected to be completed in the following days, after the parties fulfil the closing conditions stipulated in the SPA, the most significant of which are: (i) signing certain operational agreements and an indemnity agreement regarding the separation of ICC (ii) termination of an agreement regarding confidentiality entered into between TME and Agora, (iii) waiver of Trader.com obligation under a guarantee issued as security for a loan granted to one of the companies of the TME group (iv) no material adverse change in the operations of Trader.com occurring prior to closing. Non-fulfilment of any of the closing conditions by 30 June 2008 shall cause the SPA to expire. No regulatory approvals are required for the transaction. The payment will be made in cash, on the closing date. As a result of the transaction Agora will own 100 % of the share capital of Trader.com, entitling Agora to exercise 100% of voting rights at the general meeting of shareholders.
The purchase price for the shares of Trader.com is in excess of 10% of Agora's equity, thus the SPA meets the criteria of a material agreement.
