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International Marketing & Sales Group plc (IMSG) has acquired public relations firm V+O Communication in a bid to strengthen its sales and marketing service. the firm has acquired the Bulgarian agency for €10.7 million (£7.7 million), strengthening its presence in the Balkans.

Approximately 85 per cent of the amount will be paid in cash and the balance by the issue of new shares in IMSG. The exact amount of the purchase consideration, to be paid in three tranches over the next 4 years, will be calculated by reference to the profitability of V+O over this period.

The first tranche of consideration, representing 50 per cent of the purchase price, will be a multiple of 10 or 11 times V+O's net profit after tax for 2007. The second and third tranches of consideration will be paid in 2010 and 2012 respectively and will in each case be based on V+O's performance during the relevant period.

Executive chairman of IMSG, Gregory Thain, said: “We are pleased to announce the acquisition of V+O Communication. The company is a market leader in the Balkans and its acquisition will provide IMSG with the platform for development of high-margin business and marketing communication services across emerging markets and beyond.”

Greek law firm Politis & Partners represented the owners of V+O Communication – Thomas Varvitsiotis and John Olympios.

IMSG was advised by national law firm Bevan Brittan, led by head of corporate Adam Duthie, who said: “Whilst the deal was complex with competition, employment and tax issues that required detailed consideration, the professional handling by both sides ensured that it was completed smoothly and within the required deadline. We are acting for our long standing client on yet another important stage in the development of its business across the emerging markets.”

Established in 2000, V+O has offices in Athens, Sofia and Bucharest and a team of 60 communication specialists. For 2007, V+O's turnover is expected to be some £3.5 million.

After the issue of new IMSG shares as consideration for the acquisition of V+O, and based on the current share price, there will be approximately 46.1 million IMSG shares in issue and the Board of IMSG will have authority to issue approximately 1.3 million further new shares for cash or as consideration for future acquisitions.

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