TIDMASCL
RNS Number : 0493O
Ascential PLC
15 May 2018
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (IN WHOLE OR IN
PART) IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO
CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE
REGULATIONS.
FOR IMMEDIATE RELEASE
15 May 2018
Ascential plc
Proposed Sale of Ascential Exhibitions to ITE Group plc for
GBP300 million
HIGHLIGHTS
-- Ascential plc (LSE: ASCL.L), the global, specialist
information company, announces that it has entered into a
conditional agreement to sell its Exhibitions business (comprising
Spring and Autumn Fair, Bett (including The Education Show),
CWIEME, Pure, Glee and BVE) to ITE Group plc for an aggregate cash
consideration of GBP300 million on a cash and debt free basis.
-- As announced on 26 February 2018, the Group has undertaken a
strategic review of the Exhibitions business to assess all options.
The Board has concluded that a sale is in the best interests of all
shareholders in order to allocate capital to higher growth areas of
the business that enable customers to succeed in the rapidly
changing digital economy.
-- The sale of the Exhibitions business to ITE will allow these
brands to prosper under the ownership of a specialised exhibitions
organiser.
-- The Continuing Group is well-positioned to execute on its
strategy and drive growth by prioritising services that help
customers succeed in the digital economy in the disciplines of
Product Design, Marketing and Sales. This sale will also enable
further steps in simplifying the way our organisation works to
drive efficiency and synergies.
-- Ascential has ambitious growth plans involving continued
investment in its core capabilities and value accretive
acquisitions. It is therefore intended that, in the short to medium
term, the net proceeds of the disposal will be utilised to realise
the strategic priorities of the Continuing Group, including the
pursuit of further M&A opportunities.
-- The disposal constitutes a Class 1 transaction for the
purpose of the Listing Rules and is conditional upon, inter alia,
the approval of Shareholders at a General Meeting. The transaction
is expected to complete in July 2018.
-- In the financial year ended 31 December 2017, the Ascential
Exhibitions business generated revenues of GBP82.9 million (or,
adjusting for discontinued and sold events, GBP78.5 million) and
Adjusted EBITDA of GBP23.3 million. Following the disposal, central
costs previously allocated to the Exhibitions & Festivals
segment of approximately GBP3 million will be eliminated as the
relevant transitional services agreements come to an end over the
coming year.
Duncan Painter, Chief Executive Officer of Ascential, said:
"The strategic review of the Exhibitions business was undertaken
to ensure that we prioritize our time and capital on enabling our
customers to succeed in the digital economy. We are therefore
pleased to have found a good home and achieved a fair price for the
Exhibitions business. Winning in the digital economy is one of the
biggest challenges our customers face and we want to ensure we are
at the forefront of helping them achieve this."
Contacts
Chief Executive
Ascential plc Officer
Duncan Painter Chief Financial +44 (0) 20
Mandy Gradden Officer 7516 5000
Media enquiries
Edward Bridges, Matt
Dixon, FTI Consulting +44 (0) 20
Jamie Ricketts LLP 3727 1000
Goldman Sachs International
Anthony Gutman, Chris
Emmerson, Alex Garner, +44 (0) 20
Duncan Stewart 7774 1000
About Ascential
Ascential (LSE: ASCL.L) is a global, specialist information
company that informs and connects the business world in 150
countries. In an increasingly complex, digitally-driven world, we
help our customers understand what's important and how to act on it
- today, and in the future.
Ascential powers the global trend forecasting service WGSN,
environmental risk data business Groundsure, e-commerce analytics
providers One Click Retail and Clavis, the prestigious Cannes Lions
festival for the branded communications industry, the world's
premier payments and financial services congress Money20/20 and
MediaLink, a U.S.-based advisory and business services firm.
Ascential's premium products enable focus, growth and value. The
company provides customers with world class content and connections
empowering their businesses to be the best informed and best
connected.
www.ascential.com
ADDITIONAL INFORMATION
1. Background to and reasons for the Disposal
Ascential's goals are to be a leading, specialised, global
information company that enables customers to excel in the rapidly
changing digital economy and to deliver strong organic revenue
growth whilst optimising margins and profits. The Company's tightly
focused capital allocation process concentrates investment on the
highest returning products and segments to maximise value creation
for shareholders.
Ascential believes that greater value will be realised through a
simpler and more streamlined business targeted at services that
support our customers' success in the digital economy. To ensure
our capital allocation mirrors that objective, it was announced on
26 February 2018 that a strategic review of the Ascential
Exhibitions business (comprising Spring Fair, Autumn Fair, Bett
(including The Education Show), CWIEME, Pure, Glee and BVE,) would
be undertaken to consider a variety of options to maximise the
future value of these brands.
This strategic review has now been completed and the Board has
concluded that the disposal of the Exhibitions business will
enhance Ascential's ability to allocate capital to focus on higher
growth digital brands that support our customers to succeed in the
digital economy. Furthermore, the sale of the Exhibitions business
will allow these brands to prosper under the ownership of a
specialised exhibitions organiser.
Ascential has therefore entered into a conditional agreement
with ITE to sell the Ascential Exhibitions business for an
aggregate consideration of GBP300 million in cash. The Board
believes that this is a fair value for the business, which fully
recognises the Exhibitions brands' market positions, track record
of organic growth and positive cash characteristics.
2. Summary of key terms and conditions of the Disposal
A sale and purchase agreement ("Disposal Agreement") between
Ascential and ITE was entered into on 15 May 2018.
Under the terms of the Disposal Agreement, the Company has
agreed to dispose of its Exhibition businesses to ITE for a
headline consideration, payable in cash on Completion, of GBP300
million. The final consideration payable under the Disposal
Agreement will be adjusted upwards or downwards on a GBP-for-GBP
basis by reference to completion accounts of the disposed business
which will be prepared within 45 business days of Completion to
reflect the difference between estimated and actual working
capital, cash, net third party debt and intercompany payables or
receivables, each as at the date of Completion.
The Disposal is conditional upon, inter alia, approval by
Shareholders and of ITE's shareholders. The Sale and Purchase
Agreement is terminable in certain circumstances, including in the
event that the conditions are not satisfied by 31 July 2018. Both
Ascential and ITE have agreed to pay a break fee to the other in
certain circumstances, including in the event that the required
shareholder approvals are not obtained or, in the case of ITE, the
agreements required for the underwritten rights issue by ITE to
fund the cash consideration, are terminated or fail to become
unconditional.
The Board expects that, subject to the approval of the Disposal
by the Shareholders at the General Meeting, the conditions will be
satisfied and that Completion will occur in July 2018.
The Board considers the Disposal to be in the best interests of
Ascential and its Shareholders and intends to recommend that
Shareholders vote in favour of the resolution to approve the
Disposal at the General Meeting. The Board has received financial
advice from Goldman Sachs International in relation to the
Disposal. In providing financial advice to the Board, Goldman Sachs
International has relied on the Board's commercial assessment of
the Disposal.
3. Information on Ascential Exhibitions
Ascential Exhibitions organises large-scale exhibitions and
congresses where customers come together to form business
relationships and transact. Ascential Exhibitions comprises a
diversified portfolio of number one position brands:
Brand End Market
--------------------- --------------------------
Bett (including The Education Technology
Education Show)
--------------------- --------------------------
CWIEME Electric Motor, Generator
and Transformer
--------------------- --------------------------
Spring & Autumn Fair Home & Gift Retail
--------------------- --------------------------
Pure Fashion Retail
--------------------- --------------------------
Glee Gardening Retail
--------------------- --------------------------
BVE Entertainment and Media
Technology
--------------------- --------------------------
In the financial year ended 31 December 2017, the Ascential
Exhibitions business generated revenues of GBP82.9 million (or,
adjusting for discontinued and sold events, GBP78.5 million) and
Adjusted EBITDA of GBP23.3 million. Following the disposal, central
costs previously allocated to Ascential's Exhibitions &
Festivals segment of approximately GBP3 million will be eliminated
as the relevant transitional services agreements come to an end
over the coming year.
As at 31 December 2017, the Ascential Exhibitions business had
gross assets of GBP58 million.
4. Use of Proceeds and Financial Effects of the Disposal on the Company
The Company expects to receive net cash proceeds of
approximately GBP284 million (after deductions, transaction
expenses and separation-related costs).
Immediately following completion of the Disposal, the net cash
proceeds arising from the Disposal will be deposited with banks or
other financial institutions. These proceeds would, had the
Disposal occurred on 31 December 2017, have resulted in the then
net debt of Ascential of GBP271.4 million, being extinguished.
Ascential has ambitious growth plans through continued
investment in its higher growth brands and value accretive
acquisitions. It is therefore intended that, in the short to medium
term, the balance of net proceeds will be utilised to realise the
strategic priorities of the Continuing Group, including the pursuit
of further M&A opportunities. The management team and Board
will continue to critically assess all investments against
strategic criteria and the potential for increased shareholder
returns over the medium term.
5. Information on the Continuing Group
The Continuing Group will consist of the Information Services
segment, plus the Cannes Lions, Lions Regionals, Money 20/20, and
World Retail Congress brands:
Brand Description 2017
Revenue(1)
------------------ -------------------------------- --------------
WGSN Global, leading provider GBP73.6m
of intelligence, insight
and trend forecasts.
------------------ -------------------------------- --------------
MediaLink Strategic advisory firm GBP39.7m
and business services provider (Full
to the Media, Marketing, year
Advertising, Technology revenue
and Entertainment industries. GBP47.4m)
------------------ -------------------------------- --------------
One Click eCommerce analytics provider GBP12.1m
Retail for Amazon sales and share.
------------------ -------------------------------- --------------
Clavis Insight eCommerce analytics provider GBP0.3m
for digital shelf. (Full
year
revenue
of GBP13.4m)
------------------ -------------------------------- --------------
Groundsure Provider of environmental GBP17.4m
data, primarily to the
UK residential property
market.
------------------ -------------------------------- --------------
Other Information Glenigan, DeHavilland, GBP35.8m
Services Planet Retail RNG and Retail
brands Week.
------------------ -------------------------------- --------------
Cannes Lions The creative community's GBP65.6m
largest global platform
for benchmarking, networking,
learning and inspiration.
------------------ -------------------------------- --------------
Money20/20 The world's leading event GBP40.5m
for the FinTech eco-system
with editions in US, Europe,
Singapore and China.
------------------ -------------------------------- --------------
Other Exhibitions Lions Regionals (Eurobest, GBP7.9m
and Festivals Dubai Lynx, Spikes Asia)
brands and World Retail Congress.
------------------ -------------------------------- --------------
(1) Where the brand was acquired during the year (MediaLink in
February 2017 and Clavis in December 2017), both
the full year revenue and that relating to the period for which
it was owned by Ascential is provided - see the 2017
Annual Report for further information.
Ascential's strategy is to continue to drive growth through
prioritising our market leading brands, whilst simplifying the way
we work across the organisation to drive further efficiency and
synergies. Following the disposal, the Continuing Group's
priorities will therefore be to:
-- be a market leading global specialist information company,
enabling our customers to excel in the digital economy in the
disciplines of product design, marketing and sales;
-- accelerate the organic growth of our revenues and optimise margins and profits; and
-- apply a tightly focussed capital allocation process, to
achieve our goals and to maximise value creation for our
shareholders.
Specific goals for 2018 include:
-- establishing Money20/20 as the leading financial technology
payments event platform across the four biggest markets of the
United States, China, Europe and South-East Asia;
-- creating the leading enterprise insight platform for market
planning, digital shelf, market share, promotion, content and trade
research worldwide;
-- continuing the evolution of the Cannes Lions platform to
ensure the marketing industry has a consistent measure of
creativity across all digital economies and new media formats,
while accelerating our own digital propositions to further
establish the global Cannes Lions benchmark; and
-- maintaining our market leading customer retention levels across our most important brands.
The Continuing Group brands delivered 78% of Ascential's revenue
for the financial year ended 2017 and grew at a constant currency
organic growth rate of 8.7%.
6. Expected timetable to Completion
A circular, containing further details of the Disposal and the
resolution to approve the Disposal, the Board's recommendation to
vote in favour of the Disposal, and the notice of the General
Meeting, will be sent to Shareholders in early June. Completion of
the Disposal is expected to occur in July 2018.
IMPORTANT NOTICES
Goldman Sachs International, which is authorised by the
Prudential Regulation Authority and regulated in the United Kingdom
by the Financial Conduct Authority and the Prudential Regulation
Authority, is acting exclusively for Ascential plc and for no one
else in relation to the Disposal and will not be responsible to
anyone other than Ascential plc for providing the protections
afforded to its clients or for providing advice in relation to the
Disposal or any other matters referred to or described in this
announcement.
Forward looking statements
This announcement contains certain forward-looking statements,
beliefs or opinions, including statements with respect to the
Group's or the Continuing Group's business, financial condition and
results of operations. These forward-looking statements can be
identified by the use of forward-looking terminology, including the
terms "believes", "estimates", "plans", "anticipates", "targets",
"aims", "continues", "expects", "intends", "hopes", "may", "will",
"would", "could" or "should" or, in each case, their negative or
other various or comparable terminology or by discussions of
strategy, plans, objectives, goals, future events or intentions.
These statements are made in good faith based on the information
available to the Company at the date of this announcement and
reflect the Directors' beliefs and expectations. By their nature
these statements involve risk and uncertainty because they relate
to events and depend on circumstances that may or may not occur in
the future. A number of factors could cause actual results and
developments to differ materially from those expressed or implied
by the forward-looking statements, including, without limitation,
developments in the global economy, changes in regulation and
government policies, spending and procurement methodologies,
currency fluctuations, the complexity of separating significant
business systems and support services and certain reorganisation
steps as a consequence of the Disposal, potential customer,
supplier and employee reaction to the Disposal, the reduction in
scale of the Continuing Group's business following the Disposal and
other factors discussed in Part 2 (Risk Factors) of the circular to
be distributed to Shareholders.
No representation or warranty is made that any of these
statements or forecasts will come to pass or that any forecast
results will be achieved. Forward-looking statements may, and often
do, differ materially from actual results. Any forward-looking
statements in this announcement speak only as of their respective
dates, reflect the Directors' current view with respect to future
events and are subject to risks relating to future events and other
risks, uncertainties and assumptions relating to the Group's or the
Continuing Group's operations and growth strategy. You should
specifically consider the factors identified in this announcement
which could cause actual results to differ before making any
decision in relation to the Disposal. Subject to the requirements
of the FCA, the London Stock Exchange, the Listing Rules and the
Disclosure and Transparency Rules (and/or any regulatory
requirements) or applicable law, the Company explicitly disclaims
any obligation or undertaking publicly to release the result of any
revisions to any forward-looking statements in this
announcement that may occur due to any change in the Company's
expectations or to reflect events or circumstances after the date
of this announcement.
APPENDIX
Definitions
The following definitions apply throughout this announcement,
unless the context requires otherwise:
"Adjusted EBITDA" earnings before interest, tax,
depreciation, amortisation of
intangible assets acquired through
business combinations, share
based payments, and exceptional
items;
"Ascential" or Ascential plc;
the "Company"
"Ascential Exhibitions" the business comprising Ascential
or "Exhibitions Events Limited and its Chinese,
business" Brazilian and Turkish subsidiaries
that operates the following
exhibitions: Spring and Autumn
Fair, Bett (including The Education
Show), CWIEME, Pure, Glee and
BVE;
"Board" or "Directors" the board of directors of the
Company as at the date of this
announcement;
"Completion" completion of the Disposal;
"Continuing Group" the Group excluding the Disposed
Business;
"Disclosure and the disclosure and transparency
Transparency Rules" rules made by the FCA pursuant
to Part 6 of FSMA;
"Disposal" the proposed disposal of the
Disposed Business by Ascential
to ITE;
"Disposed Business" Ascential Exhibitions;
"General Meeting" the general meeting of the Company
to be convened for the purpose
of asking Shareholders to approve
the Disposal;
"FCA" the Financial Conduct Authority
of the United Kingdom;
"FSMA" the Financial Services and Markets
Act 2000 of the United Kingdom;
"Group" means the Continuing Group and
Ascential Exhibitions;
"ITE" ITE Group plc;
"Listing Rules" the listing rules of the FCA;
"London Stock London Stock Exchange plc;
Exchange"
"Ordinary Shares" means the ordinary shares in
the capital of the Company with
a par value of 1 pence each
in issue as at the date of this
document;
"Shareholder(s)" holder(s) of Ordinary shares;
"United Kingdom" the United Kingdom of Great
or "UK" Britain and Northern Ireland.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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