DATING website operator Cupid has sealed a deal to buy rival site Uniform Dating for £7 million.
The Aim-quoted company, run by serial technology entrepreneur Bill Dobbie, will issue £3.6m of shares to help pay for the acquisition, with the rest of the cash coming from existing reserves.
Cupid will pay £3.6m up front and a further £3.4m depending on Uniform Dating’s performance.
Shares in the Edinburgh-based firm jumped by up to 4 per cent in early trading.
Dobbie said: “We are very pleased to add a further high-quality business to the Cupid family of dating sites. Uniform Dating is a fast growing, profitable business, which is a dominant player in the uniformed personnel dating niche and fits perfectly into our portfolio of sites.
“We look forward to driving Uniform Dating’s growth further through our international footprint and marketing expertise. The acquisition further demonstrates our ongoing plan to drive earnings and shareholder value both organically and through strategic acquisitions.”
Paul Morland, an analyst at house broker Peel Hunt, said: “Cupid is acquiring a high-growth online dating business in the UK which offers significant scope for overseas expansion.”
Numis Securities analyst Ivor Jones added: “Uniform Dating has recently launched in the US, Canada and Australia. Cupid will be able to accelerate growth in those territories and expand the brand across the its geographical footprint in due course.”
Anna Brown, an Edinburgh-based partner at law firm Pinsent Masons, which advised Cupid on the deal, said: “At a time when many Aim-quoted companies are searching for growth, Cupid continues to attract significant backing to fund its impressive programme of expansion.”
The latest takeover follows July’s £2.9m acquisition of French peer Assistance Genie Logiciel, which operates websites including Amour.com
Chairman George Elliot had told investors at the firm’s annual meeting in June that further purchases were on the horizon.
His comments followed a deal struck with Dundee-based Beano publisher DC Thomson to take over the running of sites such as Friends Reunited Dating, Friends Over Fifty and Swoon.
Last year Cupid snapped up a number of Portuguese-language website operators in Brazil.
The string of acquisitions helped the firm – which owns brands including Be Naughty, Flirt and Girls Date For Free – to last week post an interim profit of £5.9m, which was flat year-on-year but beat house broker Peel Hunt’s expectations for £5.5m.
The company was founded in 2005 by Ukrainian doctor Max Polyakov, who left the business in March to set up an online social gaming firm in California.
Polyakov reduced his holding in the firm to 15.4 per cent from 23 per cent to fund his new venture but signed a deal preventing him from selling further shares until next spring.
Cupid which joined Aim in 2010 as Easydate before changing its name following a row with EasyJet founder Sir Stelios Haji-Ioannou.
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Weather for Edinburgh
Saturday 18 May 2013
Temperature: 9 C to 13 C
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Temperature: 9 C to 18 C
Wind Speed: 8 mph
Wind direction: North east