Acquity Group (NYSE AMEX:AQ)

NEW YORK & CHICAGO--(BUSINESS WIRE)--Accenture (NYSE: ACN) and Acquity Group Ltd. (NYSE MKT: AQ) have entered into a definitive agreement under which Accenture will acquire Acquity Group, a leading digital marketing and eCommerce company. The acquisition will further strengthen and expand the broad range of digital marketing services that Accenture provides to clients.

Accenture has agreed to pay $13.00 per outstanding American Depositary Share, each of which represents two ordinary shares ($6.50 per ordinary share), or a total of approximately $316 million, in cash for Acquity Group. The acquisition is subject to Acquity Group shareholder approval as well as other customary closing conditions.

Acquity Group provides strategy, digital marketing, and technical services to hundreds of companies to enhance their brand experiences and eCommerce performance. The acquisition will broaden Accenture’s own services in these areas, which the company provides through Accenture Interactive, its group that offers chief marketing officers (CMOs) and brand leaders a comprehensive suite of marketing, technology and analytics solutions to help them improve their marketing performance.

The addition of Acquity Group’s skills and capabilities in eCommerce and leading digital platforms such as Adobe and hybris, supported by Accenture’s industry depth and global delivery capability, will help Accenture Interactive further address the most pressing needs of today’s CMO in the midst of a digital transformation in marketing.

Acquity Group is the second-largest independent digital marketing company in the United States. It has grown rapidly in recent years, with revenues of $141 million for 2012, an increase of 32 percent over 2011. Once the acquisition is complete, Acquity Group’s more than 600 employees are expected to join Accenture Interactive.

“Chief marketing officers and brand leaders are looking for a new type of service provider that can blend the creative process with analytics and enabling technologies to engage consumers and deliver compelling user experiences across channels,” said Brian Whipple, global managing director of Accenture Interactive. “The acquisition of Acquity Group will expand our capabilities in key areas of digital marketing and eCommerce, complementing our strengths in strategy, analytics, scaled technology enablement and marketing operations.”

Chris Dalton, CEO of Acquity Group, said, “As one of the pioneers in eCommerce and digital marketing services, Acquity Group is pleased to be joining forces with Accenture, one of the largest and most successful consulting, technology and outsourcing companies in the world. Our combined expertise will allow us to deliver transformational ebusiness solutions for our clients at scale and attract the best talent in the industry.”

Kirkland & Ellis LLP is acting as Accenture’s legal adviser with regard to the transaction. Goldman Sachs (Asia) L.L.C. is acting as financial adviser to Acquity Group and Shearman & Sterling LLP is acting as its legal adviser with regard to the transaction.

CHICAGO, March 7, 2013 /PRNewswire/ -- Acquity Group Limited ("Acquity" or the "Company") (NYSE MKT: AQ), a leading global Brand eCommerce� and digital marketing company, announced that, as indicated in the previous quarterly announcement, it has been exploring strategic options relating to the joint ventures.  Since the Company's initial public offering in April 2012, Acquity has not made further investments into the joint ventures. As of February 18, 2013, shareholders of Digital Li-Ning Company Limited entered into an agreement to terminate the joint venture. The Huaren Kudong joint venture has been a passive investment in which the Company did not have management involvement since inception. Acquity has taken steps to explore the delegation of divestment rights to management, with the Company retaining a right to the proceeds.

Separately, the Company has received non-binding indications of interest relating to possible strategic transactions and the board of directors has retained professional advisors to evaluate such indications. There can be no assurance that such non-binding indications will result in any specific action or transaction. The Company does not intend to comment further unless a definitive agreement for a specific transaction is entered into, the process is concluded, or it otherwise deems further disclosure is appropriate or required.

CHICAGO, December 18, 2012 /PRNewswire/ -- Acquity Group (NYSE AMEX: AQ), a leading global Brand eCommerce® and digital marketing company, announced today it was named Business Digital Marketing Partner of the Year by Adobe Systems Incorporated. This is the second consecutive year that Acquity Group has been recognized at Adobe's annual worldwide sales kick-off.

Adobe's Business Digital Marketing Partner of the Year designation recognizes a company for its outstanding delivery at every level of partnership. Acquity Group has driven millions of dollars in sales and introduced Adobe products to a variety of Fortune 500 companies. Expertise in Adobe® Marketing Cloud, including Adobe® CQ part of Adobe Experience Manager, generated more revenue for Adobe than any other company in the North American partner ecosystem.

"Acquity Group's consistent performance and commitment over the past year has made the company a valuable component in generating quality business for Adobe," said Bill Rusitzky, global vice president, Strategic Alliances, at Adobe. "With the power of Adobe Marketing Cloud solutions and Acquity Group's expertise, our joint customers continue to thrive and increase profitability through digital initiatives."

For more than a decade, Acquity Group and Adobe have maintained a close relationship, supporting B2B and B2C organizations across a variety of industries. Joint clients include Avery Dennison, Alamo, and D&B.

"Our partnership with Adobe allows us to deepen digital service offerings for our clients and keep pace with the evolving digital marketing industry," said Chris Dalton, CEO of Acquity Group. "We are committed to combining our resources and expertise to equip joint clients with the most innovative software and technology for an effective omni-channel presence."

Aside from extensive experience with Adobe Marketing Cloud, Acquity Group has been actively engaged with Adobe CQ for more than a decade.

Premium alert sent to members on 12/4/2012:

Acquity Group (NYSE:AQ) entered our radar on May 8, 2012 at $6.25. Here is a note we sent to our premium members:

“This company develops programs to help its clients market their products through mobile devices and social media. The Company’s revenues have grown from $61 million in 2008 to $107 million in 2011 and reported 2011 EPS of $0.46. Given the industry the company operates in we presume it could achieve a trailing PE of 25, translating into a near term price target of $11.50.”

In short, AQ has a singular focus of being a leading brand e-commerce and digital marketing company that leverages the internet, mobile devices and social media to enhance its clients' brands, price competitiveness and e-commerce performance.

The company completed its IPO in late April 2012, priced at $6.00.  The stock also opened at $6.00, or 9 times the fully-taxed 2012 EPS (ADR) analyst estimate of $0.66.

We went on to code the stock as a GeoBargain on the Radar and did go long this name for a period of time as we probed deeper into the story.  The stock eventually attained a high of $11.01 on October 18, 2012. On November 16, 2012 we informed our premium GeoInvesting members that:

“…despite our initial bullish outlook we are now short AQ, the stock was trading at around $7.20 at the time of this alert.  What looks like an American company on the surface is actually a company controlled by a few Chinese players…”

We have been curious for some time now about how China-based executives accused of exploiting U.S. investors in the reverse merger market might evolve and become more sophisticated in their deceptive practices, a notion posed by GeoInvesting in past reports and research notes.

Unfortunately, during t the due diligence process we have uncovered red flags associating AQ with China-based company issues that we can’t ignore and hypothesize played a part in AQ’s weak IPO debut.

Please see the rest of our report here.

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Premium alert sent to members on 11/16/2012

Acquity Group (NYSE:AQ) entered our radar on May 8, 2012 a $6.25. Here is a note we sent to our premium members:

“This company develops programs to help its clients market their products through mobile devices and social media. The Company’s revenues have grown from $61 million in 2008 to $107 million in 2011. Reported 2011 EPS of $0.46, given the industry the company operates in we presume it could achieve a trailing PE of 25, translating into a near term price target of $11.50.”

The stock eventually attained a high of $11.01 on 10/18/2012.

Unfortunately, we feel we have to reverse our positive sentiment and are now short AQ.  Through our due-diligence process we have uncovered red flags that can not be ignored.   More details to come soon.

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Financial highlights for the three month period ended September 30, 2012

• Revenues increased by $7.7 million, or 26.0%, to $37.3 million, compared to $29.6 million for the three month period ended September 30, 2011.
• IFRS operating profit increased by $0.8 million, or 15.1%, to $6.4 million, or 17.2% of revenues, compared to $5.6 million, or 18.8% of revenues, for the three month period ended September 30, 2011.
• IFRS operating profit, excluding costs associated with our recent initial public offering and amortization of purchased intangible assets, increased by $0.1 million, or 1.3%, to $7.1 million, or 18.9% of revenues, compared to $7.0 million, or 23.5% of revenues, for the three month period ended September 30, 2011. Refer to the "Reconciliation of Non-IFRS Financial Measures to IFRS Profit" in the tables that follow for additional details for all non-IFRS financial measures.
• IFRS profit attributable to equity holders of the Company increased by $0.1 million, or 1.0%, to $3.2 million, or $0.14 per American depositary share ("ADS"), compared to $3.1 million, or $0.17 per ADS for the three month period ended September 30, 2011.
• Non-IFRS adjusted profit attributable to equity holders of the Company decreased by $0.7 million, or 17.1%, to $3.6 million, or $0.15 per ADS, compared to $4.3 million, or $0.23 per ADS for the three month period ended September 30, 2011.
• Non-IFRS adjusted EBITDA increased by $0.1 million, or 2.4%, to $7.6 million for the three month period ended September 30, 2012, compared to $7.5 million for the three month period ended September 30, 2011.

"It was yet another strong quarter for the Company in the face of challenging macro-economic conditions for our clients," said Christopher Dalton, President and Chief Executive Officer of Acquity Group. "Our deep, and strengthening, work with recognized global clients is a critical component of our success. We have been able to sustain our current level of growth with a diligent focus on executing our business strategy. We are capturing market share in both the business-to-consumer and business-to-business spaces and our clients continue to turn to Acquity Group to help them reinvent their digital Brand e-Commerce� business models in the face of secular industry changes, changing demographics, and a new era of mobile, social, analytics and digital technologies. "

Paul Weinewuth, Chief Financial Officer of Acquity Group, said, "Our utilization remains strong, driven by deepened client relationships and robust interest in our expertise in Brand eCommerce� and Digital Marketing services. Our performance strength continues to bump up against continued economic headwinds, and as a result we are maintaining a cautious outlook for the fourth quarter. We are also looking towards conversion to U.S. GAAP next year, which will also include implementation of a new enterprise resource planning (ERP) system. In addition, we are looking to simplify our corporate structure by exploring strategic options in relation to our joint ventures."

Fourth Quarter 2012 Outlook

The Company currently expects the following financial results for the fourth quarter of 2012:

• Revenues are expected to be in the range of $36 million to $40 million; and
• IFRS operating profit margin, excluding amortization of purchased intangible assets, is expected to range from 14% to 16%.

Second Quarter 2012 Results

• Revenues increased by $10.7 million, or 43.5%, to $35.5 million, compared to $24.7 million for the three month period ended June 30, 2011.
• IFRS operating profit increased by $0.4 million, or 10.7%, to $4.2 million, or 11.8% of revenues, compared to $3.8 million, or 15.3% of revenues, for the three month period ended June 30, 2011.
• IFRS operating profit, excluding costs associated with our recent initial public offering and amortization of purchased intangible assets, increased by $2.4 million, or 52.7%, to $6.8 million, or 19.3% of revenues, compared to $4.5 million, or 18.1% of revenues, for the three month period ended June 30, 2011. Refer to the "Reconciliation of Non-IFRS Financial Measures to IFRS Profit" in the tables that follow for additional details for all non-IFRS financial measures.
• IFRS profit attributable to equity holders of the Company decreased by $1.1 million, or 48.4%, to $1.2 million, or $0.04 per American depositary share ("ADS"), compared to $2.2 million, or $0.12 per ADS for the three month period ended June 30, 2011.
• Non-IFRS adjusted profit attributable to equity holders of the Company increased by $0.9 million, or 29.8%, to $3.8 million, or $0.18 per ADS, compared to $2.9 million, or $0.16 per ADS for the three month period ended June 30, 2011.
• Non-IFRS Adjusted EBITDA increased by $2.6 million, or 53.3%, to $7.4 million for the three month period ended June 30, 2012, compared to $4.8 million for the three month period ended June 30, 2011.
• As of June 30, 2012, the Company had unrestricted cash and cash equivalents of $32.6 million.

Our ongoing business performance solidifies our position as a market leader of Brand eCommerce™ and Digital Marketing solutions," said Christopher Dalton, President and Chief Executive Officer of Acquity Group. "While macro-economic conditions continue to challenge our global clients, we remain encouraged by their ongoing investments in the digital channels, which are critical to their business transformation and competitive position as digital organizations."

Paul Weinewuth, Chief Financial Officer of Acquity Group, said, "We continue to experience strong utilization, driven by interest in our expertise in Brand eCommerce™ and Digital Marketing services. The substantial business growth during the past year has allowed us to gain additional market recognition and positions us as a leader in our category."

Third Quarter 2012 Outlook

The Company currently expects the following financial results for the third quarter of 2012:

• For the third quarter ending September 30, 2012, revenues are expected to be in the range of $37 million to $40 million; and
• IFRS operating profit margin, excluding costs associated with our recent initial public offering and amortization of purchased intangible assets, is expected to range from 16% to 18%.

First Quarter 2012 Results

•  Revenues increased by $12.8 million, or 58.8%, to $34.5 million, compared to $21.7 million in the first quarter of 2011.
•  IFRS operating profit increased by $4.8 million, or 204.2%, to $7.1 million, or 20.6% of revenues, compared to $2.3 million, or 10.7% of revenues, in the first quarter of 2011.
• IFRS profit attributable to equity holders of the Company increased by $2.4 million, or 170.8%, to $3.8 million, or $0.20 per American depositary share ("ADS"), compared to $1.4 million, or $0.08 per ADS in the first quarter of 2011.
• Non-IFRS adjusted profit increased by $2.5 million, or 122.6%, to $4.6 million, or $0.24 per ADS, compared to $2.1 million, or $0.12 per ADS in the first quarter of 2011. Refer to the "Reconciliation of Non-IFRS Financial Measures to IFRS Profit" in the tables that follow for additional details.
•  Adjusted EBITDA increased by $5.1 million, or 154.9%, to $8.4 million in the first quarter of 2012, compared to $3.3 million in the first quarter of 2011. Refer to the "Reconciliation of Non-IFRS Financial Measures to IFRS Profit" in the tables that follow for additional details.
• As of March 31, 2012, the Company had unrestricted cash and cash equivalents of $3.1 million.

"As a Company started in Chicago eleven years ago, we are very proud of the continued growth in our business and our evolution into a leading global Brand eCommerce� service provider," said Christopher Dalton, President and Chief Executive Officer of Acquity Group. "We are seeing expansion in our North America footprint, especially with our recent opening in Canada, and we expect to continue this exciting momentum into international markets. Our recent IPO is the first step in our strategy to build on our track record and success in the U.S. and elevate our service offering into a global leadership position."

"Aside from our revenue growth, we are especially satisfied with the way we have managed our cost structure throughout this growth," said Paul Weinewuth, Chief Financial Officer of Acquity Group. "We are seeing economies of scale that we planned for since the financial crisis, which are starting to show results."

Recent Business Highlights On May 2, 2012, the Company completed the initial public offering ("IPO") of its American depositary shares representing ordinary shares and is now listed on NYSE MKT under the stock symbol "AQ". The net proceeds of our initial public offering of approximately $24.4 million are expected to be used for potential acquisitions, working capital and to maintain existing ownership interests in joint ventures.

 Second Quarter 2012 Outlook The Company currently expects the following financial results for the second quarter of 2012: For the second quarter ending June 30, 2012, revenues are expected to be in the range of $34 million to $36 million; and IFRS operating profit margin, excluding costs associated with our recent initial public offering and amortization of purchased intangible assets, is expected to range from 16% to 18%. GeoTeam calculate fully taxed EPS estimate for Second quarter 2012 is $0.17.