TIDMTLA
RNS Number : 2769J
TLA Worldwide PLC
03 December 2018
3 December 2018
TLA Worldwide plc
("TLA" or the "Company", together with its subsidiaries the
"Group")
Proposed Sale of US Businesses
Further to the announcement on 28 November 2018, TLA Worldwide
plc, a leading athlete representation and sports marketing
business, announces that certain of its subsidiaries, including TLA
Acquisitions Limited and TLA Acquisitions (Number Two) Limited,
have entered into an agreement (the "Agreement") to sell The Legacy
Agency, Inc. and TLA Worldwide Americas, Inc., being the Group's US
businesses and comprising both the baseball and US sports marketing
businesses (together the "US Businesses") to a newly-incorporated
private company, GCM Sports Holdings, Inc., ("Purchaser") a
Delaware corporation, owned by Gatemore Partners LP, a
Guernsey-domiciled fund managed by Gatemore Capital Management LLP
("Gatemore") ("Sale"). On the terms set out below.
Summary of the terms of the Agreement
-- The Purchaser will pay an enterprise value of US$8.5 million
for the US Businesses comprising of US$6.2 million in cash (before
costs), which have been sold on a debt-free basis
-- Net cash proceeds will be used to reduce the amount
outstanding under the Group's facilities with its bank
-- US$2.3 million of additional liabilities, including certain
outstanding earn-out liabilities, will be assumed by the
Purchaser
-- There are customary representations, warranties, covenants
and indemnities for a transaction of this nature (which, for the
avoidance of doubt, the Company itself is not required to give)
-- US$1.08 million will be escrowed until April 2020 to provide
security for the Group's indemnification obligations under the
Agreement
The Company itself is not a party to the Agreement and is not
therefore required to give any of the undertakings, warranties or
indemnities contained therein.
The Sale is conditional, amongst other things, on shareholder
approval under AIM Rule 15 on the basis that, if it completes, it
may constitute a fundamental change of business of the Group. The
ongoing status of this requirement will be confirmed in the
circular to shareholders of the Company to be published shortly
(the "Circular"). As Gatemore is interested in 14.7 per cent. of
the issued share capital of the Company, the Sale is being treated
as a Related Party Transaction in accordance with AIM Rule 13. The
directors of the Company, excluding Mike Principe and Greg Genske
for the reasons set out below ("Relevant Directors"), having
consulted with the Company's Nominated Adviser, consider the Sale
to be fair and reasonable in so far as the Company's shareholders
are concerned for the reasons summarised below and to be further
explained in the Circular. The Relevant Directors did not take part
in this decision as Mr. Principe is expected to have a continued
role in the US Businesses and Mr. Genske is the Head of Baseball
for the US Businesses. Accordingly, whilst the Relevant Directors
are not directly involved in the Sale process, they are not being
treated as independent for the purposes of AIM Rule 13.
In the Company's unaudited interim statement to 30 June 2018,
the US Businesses made a contribution to operating profits of
approximately US$0.2 million and had as at that date net assets
(before indebtedness owing to its bank) of approximately US$21.7
million (audited accounts to 31 December 2017: approximately US$1.8
million and approximately US$21.6 million respectively).
Having considered possible alternatives for realising value from
the US Businesses, further details of which will be provided in the
Circular, the directors of the Company (other than the Relevant
Directors) concluded that the Sale is in the best interests of the
Company and its shareholders as a whole.
Background and Reasons for the Sale
On 24 September 2018, TLA announced that it had appointed FTI
Capital Advisors as financial adviser to the Company to assist in
the sales process for the US Businesses following the receipt of a
number of preliminary approaches. Following this, on 11 October
2018, TLA announced that it had reached an agreement with the
Group's principal banker, SunTrust Bank, to provide additional
working capital headroom through deferment of principal and
interest payments together with the waiver of covenants.
The sales process has now concluded, with the Purchaser's offer
(resulting in the Sale) representing the best offer received for
the US Businesses. The entire proceeds from the Sale, net of costs,
will be used to reduce the indebtedness to the Group's bank.
The Group is making positive progress regarding the sale of its
Australian businesses (comprising the Australian sports marketing
business) and discussions are continuing.
If such a sale of the Australian businesses, which would also
require shareholder approval, were to proceed, and the Sale
completes, then the Company would become a "cash shell" under AIM
Rule 15; but further information on this will be provided as and
when applicable.
Further Information
A further announcement will be made on the posting of the
Circular to shareholders of the Company.
This announcement contains inside information for the purpose of
Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Enquiries:
TLA Worldwide plc
Ian Gray, Executive Chairman +44 20 7618 9100
-----------------
Beaumont Cornish Limited (Nomad and Broker)
Roland Cornish, James Biddle +44 20 7628 3396
-----------------
Luther Pendragon
Harry Chathli, Alexis Gore +44 20 7618 9100
-----------------
About the Group
TLA is a leading athlete representation, sports marketing and
event management group quoted on London's AIM. The Group derives
revenues from long-term agency relationships with many prominent US
and international sports stars, broadcasters and media
personalities associated with major sports including the MLB, NFL,
NBA, PGA TOUR, AFL, Olympians and cricketers. In addition, it also
provides a range of services in respect of media consultancy,
sports sponsorship and event creation and ownership. With over 170
full-time personnel, TLA serves its clients from 10 locations
worldwide including its offices in London, UK; New York, Newport
Beach, Houston, Charleston, San Francisco, USA; Melbourne, Perth,
Adelaide and Sydney, Australia. For more information, please visit
www.tlaworldwide.com.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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