SPAR Group Completes Acquisition of Wings & Ink
Acquisition Will Add Approximately $3 Million in Annualized Revenue; Represents SPAR's Second Acquisition in 2010
TARRYTOWN, N.Y., Apr 06, 2010 -- SPAR Group, Inc. (Nasdaq:SGRP) (the "Company" or "SPAR"), a leading supplier of retail merchandising and other marketing services throughout the United States and internationally, today announced it has completed the acquisition of Wings & Ink, a leading marketing and merchandising company serving customers throughout Canada. The transaction is expected to generate at least $3 million in annualized revenues.
Wings & Ink marks the second acquisition, including National Marketing Services, which SPAR has made within the last 4 months. The combined acquisitions will add approximately $9 million in total revenue on an annualized basis. The Wings & Ink transaction is in line with the Company's previously announced growth strategy of acquiring synergistic businesses that can be immediately implemented into the Company's core marketing and merchandising business. This acquisition is being funded with existing working capital and a portion of existing debt. The final purchase price of the acquisition is based on a twenty-four month earn out agreement.
Wings & Ink further enhances SPAR's existing presence in Canada through its subsidiary, SPAR Canada. Wings & Ink operates in a similar fashion to SPAR through two divisions, marketing and merchandising services. Wings & Ink was founded in 1994 and has built a reputation and brand name as a quality company in the industry, providing excellent customer service. The transaction adds many new clients to SPAR Canada's customer base which are well known retailers and consumer package goods manufacturers. SPAR Canada welcomes Wings & Ink's core management team, including the managing director, to the SPAR Canada team. The new management team's experience in operating within the merchandising industry in Canada is expected to help grow SPAR's business through new customer relationships and cross selling opportunities.
"Operating in the niche business of marketing and merchandising services and being an industry leader has presented SPAR with the fortunate opportunity to acquire valuable assets at attractive valuations to help fuel the growth of our business," stated Gary Raymond, President and CEO of SPAR Group Inc. "Today SPAR Canada is operating successfully on a national and multi-lingual basis in Canada and continues to enjoy a strong recurring business with existing customers. Wings & Ink not only adds a new retail and manufacturing customer base, but also helps us enhance our market penetration in all geographical regions of Canada through the added workforce and reach of Wings & Ink. We believe the combination of our proprietary technology, the Wings and Ink team and their great customer service is a winning platform for growth and margin improvements. Although the transaction closed on April 1, 2010 both teams have been working diligently over the past several months to ensure that the finalized combination of SPAR Canada and Wings & Ink would make a seamless transition. Going forward we will continue to aggressively evaluate acquisition opportunities such as Wings & Ink and National Marketing Services to help grow our business and further cement ourselves as an industry leader."
About Wings & Ink
Founded in 1994 by Andre Leclipteux and Wendy Golding, Wings & Ink is a communications company with Merchandising and Marketing arms. With a merchandising rep team numbering close to 1,000 and an expanding head office crew, Wings & Ink has grown considerably since inception. Wings & Ink is proud to represent some of North America's most respected corporations. For more information please visit www.wingsink.com.
About SPAR Group
SPAR Group, Inc. is a diversified international merchandising and marketing services company and provides a broad array of services worldwide to help companies improve their sales, operating efficiency and profits at retail locations. SPAR Group provides product services, project services, in-store events, radio frequency identification ("RFID"), technology services and marketing research covering all product and trade classifications, including mass market, drug store, convenience store and grocery chains. Product services include product additions; placement, reordering, replenishment, labeling, evaluation and deletions, and project services include seasonal and special product promotions, product recalls and complete setups of departments and stores. The company operates throughout the United States and internationally in 12 of the most populated countries, including China and India. For more information, visit the SPAR Group's Web site at www.sparinc.com.
Certain statements in this news release and such conference call are forward-looking, including (without limitation) growing revenues and profits through acquisitions, attracting new business that will increase SPAR Group's revenues, continuing to maintain costs and consummating any transactions. Undue reliance should not be placed on such forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond the company's control. The company's actual results, performance and trends could differ materially from those indicated or implied by such statements as a result of various factors, including (without limitation) the continued strengthening of SPAR Group's selling and marketing functions, continued customer satisfaction and contract renewal, new product development, continued availability of capable dedicated personnel, continued cost management, the success of its international efforts, success and availability of acquisitions, availability of financing and other factors, as well as by factors applicable to most companies such as general economic, competitive and other business and civil conditions. Information regarding certain of those and other risk factors and cautionary statements that could affect future results, performance or trends are discussed in SPAR Group's most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings made with the Securities and Exchange Commission from time to time. All of the company's forward-looking statements are expressly qualified by all such risk factors and other cautionary statements.
SPAR Group, Inc.
James R. Segreto, Chief Financial Officer