Proposed Acquisition of JMI and £25.6m Placing

THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE INFORMATION HEREIN IS RESTRICTED AND NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, OUTSIDE OF THE UNITED KINDGOM, INCLUDING IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, SOUTH AFRICA, OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS AND INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF INFORMATION TO BE CONTAINED IN THE PROSPECTUS. COPIES OF THE PROSPECTUS WHEN PUBLISHED WILL BE AVAILABLE FROM THE REGISTERED OFFICE OF CHIME AT SOUTHSIDE, 105 VICTORIA STREET, LONDON, SW1E 6QT.

Further, this announcement is for information purposes only and shall not constitute an offer to sell or issue or the solicitation of an offer to buy, subscribe for or otherwise acquire any new ordinary shares of Chime in any jurisdiction in which any such offer or solicitation would be unlawful.

This announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notices" section.

Chime Communications PLC
(“Chime” or the “Company")

Proposed acquisition of Just Marketing, Inc. (“JMI”)

Placing to raise approximately £25.6 million

Chime, the international communications & sports marketing group, is pleased to announce the proposed acquisition of JMI, a global marketing firm focused on motorsports (the “Acquisition”), together with, as part of the funding for the Acquisition, a placing of 8,533,334 new ordinary shares to raise approximately £25.6 million (before expenses) (the “Placing” and together with the Acquisition, the “Transaction”).

Hilights of the Acquisition

• Chime has agreed to acquire, through its wholly-owned subsidiary Chime USA. Inc. (“Chime US”), the entire issued share capital of JMI, for a maximum consideration of USD70.6 million (approximately £43.7 million).
• JMI is a global marketing firm focused on motorsports, operating primarily in Formula 1, NASCAR (the National Association for Stock Car Auto Racing) and IndyCar. JMI provides long-term sponsorship management and activation strategies, together with services including large-scale hospitality events, rights sales, and digital and experiential marketing initiatives.
• The directors of Chime believe that the Acquisition will help the Company fulfil its aspiration of becoming a leading sports marketer. In particular, the Acquisition:
  • provides Chime’s sport and entertainment division (“CSM”) with a leading position in motorsports, a sport in which it currently has limited presence;
  • gives CSM a foothold into the United States, one of the world’s largest sports marketing markets;
  • provides CSM with a management team with a collective experience in the motorsports industry of over 100 years in addition to CSM’s existing team;
  • reduces CSM revenue volatility through JMI’s multi-year contracts, longstanding relationships and strong revenue visibility;
  • provides CSM with cross-selling opportunities; and
  • is consistent with CSM’s international, full service and multi-sport strategy.
• The Acquisition is expected to be earnings-enhancing in the first full financial year following completion.
• Zakary C. Brown, the founder and CEO of JMI, has relocated to London and, following completion of the Acquisition, will sit on the boards of both JMI and CSM Motorsport Limited (“CSM Motorsport”) (a newly incorporated wholly owned UK subsidiary of Chime) as President and CEO. It is intended that the JMI business will be operated as a separate division within CSM.

Financing the Acquisition

• The Acquisition and associated expenses will be funded through the Placing and the issue of new ordinary shares in Chime (the “Consideration Shares”), with the balance being satisfied by drawing down on Chime’s increased Revolving Credit Facility.
• The Placing will comprise 8,533,334 new ordinary shares (the “Placing Shares”) being issued to Placees at 300 pence per Placing Share (the “Issue Price”).
• The Issue Price represents a discount of 7.1 per cent. to the Closing Price of 323 pence per Existing Ordinary Share on 24 October 2013.
• The Placing has been fully underwritten by HSBC Bank plc (“HSBC”) and Numis Securities Limited (“Numis”) (each a “Bookrunner”, together the “Joint Bookrunners”).

Commenting on the Acquisition, Christopher Satterthwaite, Chief Executive of Chime, said:

“The acquisition of JMI is an important step in the development of our international, full service and multi-sport strategy. Chime formed its sports and entertainment division in 2007 and since then, the business has grown considerably, building profits to £15.8m in 2012. This acquisition will give us a strong foothold in the United States, one of the largest sports marketing markets in the world, and will accelerate Chime’s strategy of becoming a global leader in sports marketing.”

“Zak Brown is a major figure in the motorsports world and we are delighted that he is bringing his business to CSM and the opportunities for cross selling to both existing and new clients.”

Zak Brown, CEO of JMI , said:

“I am delighted to be joining the Chime group. As part of Chime we can sell other products to our existing clients and I look forward to working with Lord Coe and the entire Chime team across all areas of the sports marketing business.”

The Acquisition is conditional on, among other things, the approval of Chime shareholders at a meeting to take place at 12.00 p.m. on 14 November 2013. Shareholders will be sent a combined prospectus and circular (the “Prospectus”) containing further details of the Transaction later today.

The Placing is not conditional upon completion of the Acquisition. If Completion does not take place, the Placing would still be completed and funds would be raised by Chime. In these circumstances, the Directors will need to evaluate other appropriate acquisition opportunities and/or how best to return surplus capital to Shareholders.

Terms used and not defined in this announcement have the meaning given to them in the Prospectus.

Analyst Presentation

A copy of this announcement, the Prospectus (including the Notice of General Meeting), and the analyst and investor presentation, will be made available on the Company’s website at www.Chimeplc.com.

For further information please contact:

Mark Smith
Chief Operating Officer and Finance Director
Chime
020 7096 5888

James Henderson, Victoria Geoghegan, Elizabeth Snow
Bell Pottinger
020 7861 3925

Charles Packshaw, Mark Dickenson, Keith Welch
HSBC Bank plc
(Sole Sponsor, Joint Financial Adviser, Joint Bookrunner and Joint Underwriter)
020 7991 8888

Christopher Wilkinson, Lorna Tilbian, Nick Westlake
Numis Securities Limited
(Corporate Broker, Joint Financial Adviser, Joint Bookrunner and Joint Underwriter)
020 7260 1000

David Anderson          
EPL Advisory
(Joint Financial Adviser)
07748 776433

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