UBC completes the sale of its commercial business to GTN, which sees UBC taking back part of the business which was originally sold last year.
UBC is to receive a further £1,900,000 net from Global Traffic Network, but will pay GTN a cash consideration of £50,000 for the return of the part of the Commercial Division responsible for Sponsorship, Promotions and Interactive Marketing (trading as ‘Intamedia’).
GTN have today agreed to pay to UBC a further cash consideration of £1,950,000 and UBC has agreed to release GTN from its obligations under the earn out contained within the agreement signed by the two parties on February 1 2009.
At the same time, GTN has further agreed to release UBC from those elements of the restrictive covenants that cover this area of business.
In the 11 month period before the original sale of the Commercial Division to GTN, the Intamedia business had a turnover of £1,028,586 and made a contribution to Operating profit of £138,687.
Simon Cole, Chief executive of UBC commented: “This final chapter of our transaction with GTN takes our total net cash receipts for the sale of the Commercial Division to nearly £11 million. The payment to remove the earn out is sensible, providing as it does certainty in an unpredictable advertising market.
"The cash sum paid represents what would have been expected by next year had the business continued to track at its current sales rate. In addition, we are released from part of our restrictions under the original deal and welcome back to UBC the team responsible for Sponsorship and Interactive Marketing. This is the part of the commercial business that always shared the most synergies with our core production businesses and, whilst I can understand GTN’s desire to focus on their core business of airtime sales, we can see opportunities for growth in this area in the future."