Cash-rich sports and entertainment management venture CSS Stellar yesterday announced it had completed the acquisition of Craigie Taylor International for an initial £3.45 million in cash and shares.

Craigie, which, depending on its profits performance, could cost a further £3 million, has marketing clients across a wide range of sports. It handled Vodafone's cricket sponsorship and negotiated the telephone group's sponsorship deal with Manchester United.

The purchase should enhance Stellar's earnings in the short term. In the year to December, Craigie made profits of £310,000 on sales of £3.7 million. According to chief executive Julian Jakobi, Craigie will become the European arm of the GEM Group – a profitable US company Stellar purchased last year.

Stellar's shares, recommended at 305p in December's Growth Company Investor, are trading at just 241.5p. The fall is due to a recently completed (and fully underwritten) £9.9 million placing and open offer. The offer was deeply discounted, giving investors the opportunity to subscribe for two new shares of 225p each for every nine ordinary shares held.

With Stellar's cash pile safely tucked away in the bank, and the acquisition having completed another part of its European jigsaw of operations, there is reason to believe the shares will gain momentum yet again.

Dresdner Kleinwort Benson reckons Stellar, which made profits of £2.3 million in the year to December 2001 on £23 million sales, should be able to post profits of around £5.7 million this year, and earnings to 16.4p. For 2003, it is looking for profits of £6.8 million and around 19.5p earnings.

Of course, there will be various charges associated with integrating the various acquisitions, but on these figures the company is trading on a forward p/e of 14.7 for 2002 and 12.3 for 2003.

Definitely one for the long term. Hold.