Cream Group to take full ownership of Creamfields UK Festival
16 December 2011
Ingenious Media Active Capital Limited (“IMAC” or the “Company”) today announces that its board has approved the purchase by C.I. (Events) Ltd (a wholly owned subsidiary of Cream Holdings Limited (“Cream”)), of the ownership position of Ingenious Live VCT 1 plc and Ingenious Live VCT 2 plc (collectively “the Ingenious Live VCTs”) and The Young Vic Company in the Sunday (“Day 2”) of the Creamfields UK festival (“the Transaction”).
On completion of the Transaction, which is subject to the completion and execution of legal documents which is expected to take place in January 2012, Cream will operate and own all of the Creamfields UK festival. Cream is an investee company of IMAC through IMAC’s limited partnership holding (90 per cent) in Ingenious Ventures Limited Partnership (“IVLP”). IVLP has a 46.9 per cent interest in Cream.
The Creamfields UK festival has performed strongly over the last few years, and completion of the Transaction will allow Cream to participate fully in the future growth of this event.
IMAC’s manager is Ingenious Ventures, a trading division of Ingenious Asset Management Limited, and part of the Ingenious Group, one of the UK’s leading media investment and advisory businesses. Ingenious Ventures is also the manager of the Ingenious Live VCTs. The directors of IMAC consider the Transaction to be a Related Party Transaction under the AIM rules.
The Transaction will involve the purchase by C.I. (Events) Ltd of both the Ingenious Live VCTs’ aggregate 49.9 per cent holding and The Young Vic Company’s 0.02 per cent holding in CFDT Ltd. CFDT Ltd was funded by C.I. (Events) Ltd, The Young Vic Company and the Ingenious Live VCTs to run Day 2 of the Creamfields UK festival in July 2008.
Upon completion of the Transaction, C.I. (Events) Ltd, will hold a 100 per cent interest in CFDT Ltd. The consideration for the Transaction, to be paid in cash, is £1.08m. In addition, the loan notes held by the Ingenious Live VCTs in CFDT Ltd will be repaid in accordance with the original Loan Note Agreements for an aggregate amount equal to £1.7m. In the event of a sale of Cream during a two year period following the completion of the Transaction, further contingent deferred consideration may also be payable to the Ingenious Live VCTs dependant on the sale value of Cream.
CFDT Ltd is entitled to 40 per cent of the proceeds from Day 2 of Creamfields UK. CFDT Ltd recorded turnover of £1.93m and gross profit of £232,030 in the year ended 31 May 2011. As at 31 May 2011, CFDT had current net assets of £1.7m. The Creamfields UK festival in August 2011 again sold out in advance of the event, despite increasing capacity to 50,000 per day, up from 45,000 per day the previous year.
The board of IMAC consider, having consulted with its nominated adviser, that the terms of the Transaction are fair and reasonable in so far as the shareholders are concerned. Patrick McKenna (who is a shareholder and on the board of the Ingenious Live VCTs and a director and chairman of The Young Vic Company); Mike Luckwell (who is a shareholder of the Live VCTs); and Neil Blackley (who is a shareholder of the Live VCTs) abstained from voting at the meeting of the board of the Company at which the Transaction was considered.
Enquiries:
IMAC Patrick McKenna/ Patrick Bradley - 020 7319 4000
Canaccord Genuity Limited
Bhavesh Patel - 020 7050 6500