The 15-year-old Italian firm will be merged into Incepta's Citigate PR network and rebranded as Citigate Gunpowder.
Gunpowder has more than 40 staff and provides public relations, marketing services and advertising to a client list including Cisco Systems, Compaq, Dell, Fujitsu and Sun Microsystems.
Gunpowder has already established a strong working relationship with other Citigate businesses over recent years and will make an immediate contribution to the group's European operations.
In the year to December 31 2000, Gunpowder reported a turnover of Lira 22.7bn (£7.3m). Profits before taxation were Lira 916m (£295,000).
Incepta will pay an initial consideration of £5.4m for Gunpowder, comprising £3.5m in cash and the issue of 4,214,966 new ordinary shares of 1p each in Incepta. Final consideration will be payable in cash or, at Incepta's sole discretion, a mixture of cash and shares, depending on the future financial performance of Gunpowder. The maximum total consideration payable is £11.9m.
In the US, Incepta has acquired MSI Strategic Communications, a Chicago-based communications consultancy, and Admaster, a marketing communications firm based in New York.
Each operation will be merged with existing Citigate offices to enhance the group's client offering throughout the US. Incepta will acquire the entire share capital of MSI and Admaster for an initial cash consideration of £2.3m. Further consideration will be payable in cash and shares, depending on the future financial performances of MSI and Admaster. The total maximum payable under these transactions is £5.7m.
David Wright, executive chairman of Incepta, said, "The acquisition of Gunpowder and the US-based consultancies reflects our commitment to invest in best-in-class businesses. Gunpowder strengthens our presence in a key communications market which we believe is one of the fastest growing in Europe and one in which we have been operating successfully for many years."