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UPDATE - Porta Communications welcomes Redleaf Polhill team through acquisition

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Marketing and PR firm Porta Communications (LON:PTCM) has acquired 51% of communications agency Redleaf Polhill in a deal that is expected to be earnings accretive within its first full year.

City based Redleaf, founded in 2000, will become part of Porta's public relations division.

Porta paid for the firm in cash and shares from shareholders Emma Kane, Ian Rosenblatt and Julian Polhil and has an option to acquire the remaining 49% over the following three years.

Porta's chief executive David Wright said: "Redleaf Polhill has an exceptional market reputation and is known for delivering powerful communications and investor campaigns for its clients.

"It brings with it a very strong leadership team and strength and depth in its employees. We are delighted to welcome the team and its strong brand to the group."

Under the terms of the deal, the firm has acquired 51% of Redleaf for £1,795,000, of which £897,500 is in cash and the balance will be settled through the issue of around 6.9mln Porta shares.

Redleaf made an operating profit of around £0.61 million in the financial year to November 30 last year. However, due to an exceptional write down of a related party loan, it made a loss after tax in the period of £0.29 million.

House broker N+1 Singer said the acquisition increased the scale of Porta’s activities and would bolster its client list, adding to its credibility and aid further its new business activity.

Yesterday (Tuesday), Porta announced the launch of Newgate Communications in Doha, Qatar, saying it had already secured its initial retainer contract and was negotiating further ones.

Newgate, in Australia, has also been appointed by the government to handle the second phase of the Medibank privatisation, fees for which (phase 2) were agreed at A$2.42mln.

Porta shares edged up 0.93% to 13.625p.

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