Completion of Kantar transaction
December 05 2019 - 2:10PM
Business Wire
Kantar transaction completed; leverage
reduced to lower end of target range; share buyback to commence
shortly
WPP (NYSE:WPP) today announces that it has completed the
transaction to sell 60% of Kantar, its global data, research,
consulting and analytics business, to Bain Capital Private Equity,
with respect to approximately 90% of the Kantar business, and that
the proportionate transaction proceeds have been received.
Following final completion in respect of the remaining Kantar
business in the first half of 2020, total aggregate net proceeds
after transaction costs, tax and WPP’s continuing investment in 40%
of the equity of Kantar are expected to be approximately $3.1bn
(approximately £2.4bn1).
The Kantar transaction was originally announced on 12 July 2019
and further details were included in a circular sent to WPP’s
shareholders on 7 October 2019. As previously set out, WPP intends
to retain approximately 60% of the net proceeds (approximately
$1.9bn or £1.4bn) to reduce debt to the low end of the target
leverage range of 1.5 – 1.75x average net debt/EBITDA2 for 2020,
and to return approximately 40% of the net proceeds (approximately
$1.2bn or £950m) to shareholders. WPP today announces that the
return to shareholders will be executed via a share repurchase
programme, which we expect to commence shortly, with an initial
tranche of approximately £250m, of the total £950m, planned to be
completed by March 2020.
Mark Read, Chief Executive Officer, WPP, said:
“The completion of the Kantar transaction, earlier than
anticipated, achieves the objective we set out in December 2018 to
strengthen our balance sheet, and substantially completes our
disposal programme. It is a major step in simplifying and focusing
WPP, and we intend to return around 8% of our share capital to
shareholders through a buyback programme. The partnership with Bain
Capital means that we will participate in the future growth of
Kantar as well as allowing our clients to continue to benefit from
Kantar’s services.”
1 All $ values are translated into £ at an exchange rate of
£1:$1.31 2 Net debt/EBITDA ratio calculated excluding impact of
IFRS 16: Leases
This announcement contains inside information. The person
responsible for arranging the release of this announcement on
behalf of WPP is Marie Capes, Company Secretary.
wpp.com/investors
This announcement is being distributed to all owners of Ordinary
shares and American Depository Receipts. Copies are available to
the public at the Company’s registered office.
The following cautionary statement is included for safe harbour
purposes in connection with the Private Securities Litigation
Reform Act of 1995 introduced in the United States of America. This
announcement may contain forward-looking statements within the
meaning of the US federal securities laws. These statements are
subject to risks and uncertainties that could cause actual results
to differ materially including adjustments arising from the annual
audit by management and the Company’s independent auditors. For
further information on factors which could impact the Company and
the statements contained herein, please refer to public filings by
the Company with the Securities and Exchange Commission. The
statements in this announcement should be considered in light of
these risks and uncertainties.
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