MKM goes global with Leapfrog acquisition

MKM Group, the AIM-listed leading travel, lifestyle and promotions company, has agreed to buy Australian marketing services company the Leapfrog Group.

The merger will create a single global business that can offer bespoke promotional solutions to international clients based on the new company's combined product offering.

The deal, which has a maximum value of GBP9m depending on financial performance, is in line with MKM's objective to expand the group through acquisitions in the marketing services sector.

Leapfrog Group co-founders Brian Smillie and Richard Tenser will join the board of the MKM Group as International Managing Director and International Development Director respectively, bring considerable commercial skills and experience to add further depth to the senior management team.

Chairman Andrew Johnson commented: "This acquisition marks the beginning of a new era for MKM, where we will fulfil our ambitions for a more broad based marketing services business on an international scale.

"We believe that the Leapfrog acquisition is highly complementary and opens the way for significant international expansion.

"This deal represents a great stride in our plans to develop the group, as it adds critical mass to our sales promotion activities, broadens and strengthens our product range and more than doubles the existing business.

"The new business will place considerable emphasis on achieving strong organic growth, building client relationships with global brands, introducing innovative products and entering new geographic markets in Europe and Asia Pacific".

Johnson joined the MKM team as full-time Executive Chairman in December 2005.

Since then, the group has undergone significant restructuring, returning to growth and profitability.

The company has reinforced its existing business, which significantly includes the recent renewal of its partnership agreements with HSBC Bank and First Direct, where the company supports the running of HSBC's "Premier" and "Plus" accounts and the "firstdirectory" account for First Direct.

MKM has also won several new accounts, including The Co-operative Bank, Tesco and RCI, the global leader in non-hotel leisure accommodations.

The last two years have also seen a significant shift towards the provision of more comprehensive solutions and a considerable focus on improving operational delivery and quality control.

As part of the latter, MKM initiated a programme to achieve ISO 9001, receiving accreditation in April 2007.

Over the last year, MKM has invested in the development of StARS, its web-based database programme that allows consumers to find relevant offers more easily and provides clients with management data on campaign results.

This product was launched in the first quarter of 2007 and has been well received by clients.

The MKM product portfolio has recently been further strengthened by the introduction of The Green Suite, a pioneering solution which fulfils market demand for environmentally friendly, green and ethical offers.

In developing this product, MKM has been able to partner with environmentally friendly or ethically led companies that have not previously partaken in sales promotions activities.

MKM was established by Mark Koch in 1989 and has 38 employees based in Cheshire.

MKM Concepts specialises in delivering programmes based around travel, leisure and lifestyle promotions utilising a product range that includes holiday and flight vouchers, experience days, pamper treats and restaurant and hotel offers.

The company works with clients such as First Direct, HSBC, L'Oreal, Sainsbury's, The Co-operative Bank, Tesco and RCI, supplying a range of promotional and loyalty programmes and associated services.

Leapfrog was established by Richard Tenser and Brian Smillie in 1997 in Sydney, Australia, and provides sales promotion programmes to major branded companies in Australasia and the Asia Pacific region.

The business has over 50 employees and provides longer term reward and loyalty consumer programmes together with short tactical consumer campaigns, based on leisure and lifestyle incentives.

Clients include Lufthansa, ANZ, Great Building Society, Procter and Gamble, Nestle and Coca-Cola.

The Leapfrog Group is organised into two divisions - Leapfrog Loyalty and Reward Solutions and Leapfrog Promotions and Incentives Solutions.

The company has an active and proven strategy of international expansion, with a sales operation in New Zealand, and sees significant opportunity to further expand into new geographic territories.

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