Published : July 12, 2019 03:15 PM
WPP has today announced that it has entered into an agreement to sell 60% of Kantar, its global data, research, consulting and analytics business, to Bain Capital (the "Proposed Transaction"). The Proposed Transaction creates a strong partnership for the development and growth of Kantar and values the whole of Kantar at a headline enterprise value of c.$4.0bn (c.€3.2bn)
On 25 October 2018, WPP highlighted the significant opportunity to develop Kantar into the world's leading data, insights and consulting company. The Board considered that the best way to unlock Kantar's potential and maximise shareholder value was with a strategic or financial partner. It was envisaged that WPP would remain a share owner with strategic links to ensure that the benefits to clients were realised.
Kantar has attracted significant levels of interest from potential financial partners, leading to the agreement today with Bain Capital. The WPP Board believes that the Proposed Transaction will allow Kantar to strengthen its industry-leading position through the combined expertise and resources of Bain Capital and WPP. It also crystallises significant value for WPP's shareholders, while giving them continued exposure to an attractive business with the potential for further value realisation in the future.
• Bain Capital Private Equity's ("Bain Capital") acquisition of 60% of Kantar creates a strong partnership with WPP to accelerate the development of Kantar
• Further simplifies and repositions WPP for growth, whilst unlocking significant value for shareholders
• Kantar valued at c.$4.0bn (c.€3.2bn1) in the proposed transaction, equivalent to a multiple of 8.2x 2018 Kantar headline EBITDA2
• Proceeds to WPP on completion after tax and continuing investment in Kantar expected to be c.$3.1bn (c.€2.5bn)
• Potential value upside for WPP shareholders from 40% equity stake in Kantar
• WPP to retain c.60% of net proceeds to reduce debt to the low end of the target leverage range of 1.5 - 1.75x average net debt/EBITDA3 for 2020
• Balance of proceeds, c.$1.2bn (c.€1.0bn), to be returned to shareholders
• Impact of proposed transaction and use of proceeds expected to be marginally dilutive to headline EPS in 2021
• Completion and associated proceeds relating to no less than 86% of Kantar expected in early 2020, subject to approval by WPP shareholders and other customary regulatory and legal approvals
Mark Read, Chief Executive Officer, WPP : "Kantar is a great business and we look forward to working with Bain Capital to unlock its full potential. As a strategic partner and shareholder in Kantar, WPP will continue to benefit from its future growth while our clients continue to benefit from its services and capabilities. I would like to thank Eric Salama, his team and everyone at Kantar for their tremendous contribution to WPP - a contribution that will continue as we develop the business together.
"This transaction creates value for WPP shareholders and further simplifies our company. With a much stronger balance sheet and a return of approximately 8% of our current market value to shareholders planned, we are making good progress with our transformation."
Luca Bassi, Managing Director, Bain Capital Private Equity: "Kantar is a market leader in many areas and we are excited to be partnering with its management team and WPP to build on this remarkable platform for growth. We see many opportunities for expansion and will invest in technology to expand the company's capabilities and reinforce its global leading position."
Christophe Jacobs van Merlen, Managing Director at Bain Capital Private Equity : "We believe that we are well-positioned to support Kantar, alongside WPP, in driving forward the business in a rapidly changing industry. Our deep sector knowledge, operational expertise and strong track record of partnering with management teams to accelerate growth gives us confidence that we can help Kantar grow both organically and by acquisition."
Eric Salama, CEO, Kantar : "Our new ownership structure presents a great opportunity for Kantar, our employees and our clients. In Bain Capital we have a partner who shares our ambition, brings relevant expertise and - with WPP - can help us accelerate our growth and impact for clients. We are focused on delivering 'human understanding at scale and speed' and the 'best of Kantar' more consistently. We will do so by investing more in talent and by becoming a more technology-driven solutions provider."
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