REG - Ascential PLC - Proposed sale of Digital Commerce and WGSN

AscentialAnnouncement

30/10/2023 07:15

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RNS Number : 6863R  Ascential PLC  30 October 2023

 

 

FOR IMMEDIATE RELEASE

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH
JURISDICTION

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

30 October 2023

 

Ascential plc

 

Proposed sale of Digital Commerce and WGSN for a combined enterprise value of
£1.4 billion and cash proceeds of £1.2 billion

 

-      Conclusion of managed separation, announced in January 2023, to
create the optimal structure for three distinct businesses and maximise
shareholder value

-      Intention to distribute approximately £850 million to
shareholders

-      Ascential's world-leading Events business to continue as an
independent, UK-listed company

 

Ascential plc ("Ascential" or the "Company", and together with its
subsidiaries, the "Ascential Group"), today announces that it has entered into
agreements, subject to shareholder approval, to sell its digital commerce
business((1)) ("Digital Commerce") to Omnicom Group Inc. ("Omnicom") (the
"Digital Commerce Sale"), and its product design business ("WGSN") to Wind UK
Bidco 3 Limited ("Bidco"), a newly-formed company established by funds advised
by Apax Partners LLP (the "Apax Funds") (the "WGSN Sale") (and together with
the Digital Commerce Sale, the "Transactions") for a combined enterprise value
of £1.4 billion and cash proceeds of £1.2 billion. Following completion of
the Transactions, the Company intends to distribute approximately £850
million to Ascential shareholders.

 

Highlights

 

·     Agreement to sell Digital Commerce to Omnicom for a total enterprise
value of $900 million (approximately £741 million((2))). After customary
closing adjustments, including earnout obligations assumed by Omnicom,
expected proceeds from Omnicom are $835 million (approximately £688 million)
and also taking account of certain early earnout settlements by Ascential of
approximately $50 million and other customary closing adjustments, proceeds
are expected to be approximately $775 million (approximately £638
million((2))).

 

·     Agreement to sell WGSN to Bidco for a total enterprise value of up to
£700 million which includes contingent consideration payable based on the
ultimate return achieved by the Apax Funds on their investment. After
customary closing adjustments (including in respect of approximately £61
million of deferred income), proceeds from Bidco are expected to be
approximately £572 million payable on completion.

 

·     The Transactions are expected to realise combined proceeds of
approximately £1,210 million ((2)) representing 126% of Ascential's market
capitalisation immediately prior to this announcement, and 132% of Ascential's
market capitalisation immediately prior to 25 January 2023, when Ascential
announced the conclusion of the Strategic Review.  For the twelve-month
period ended 30 June 2023, Digital Commerce and WGSN, in aggregate,
represented 63% and 46% of the Ascential Group's revenues and Adjusted EBITDA,
respectively (before allocation of corporate costs).

 

·     Following completion of the Transactions, Ascential expects to return
approximately £850 million to shareholders. This represents 89% of
Ascential's market capitalisation immediately prior to this announcement
((3)), and 93% of Ascential's market capitalisation immediately prior to 25
January 2023 ((4)), when Ascential announced the conclusion of its review of
strategic options. The Board expects to implement the return of value to
shareholders by way of a special dividend, although the quantum, timing and
form of the return of value will remain at the discretion of the Board.

 

·     The balance of the proceeds after return of value to shareholders
will be used to pay taxes, transaction and separation costs incurred in
relation to the Transactions of approximately £143 million and to repay drawn
amounts under Ascential's current debt facility.  New debt facilities are
expected to fund Ascential's standalone Events business, which will target a
Net Debt to Adjusted EBITDA ratio of 1-2x over the medium term.

 

·     Following completion of the Transactions, the Ascential Group will be
composed substantially of Ascential's world-leading Events business, which is
positioned for continued success as a high quality, independent UK-listed
business. For the twelve-month period ended 30 June 2023, Events delivered
revenues of £213 million and Adjusted EBITDA of £85 million((5)) (before
allocation of corporate costs).

 

·     The Board of Ascential also reports today that the Board of Hudson
MX has initiated a sale of the Hudson MX business, a US provider of SaaS media
buying and media accounting solutions in which Ascential is a 36.5%
shareholder, which the Board believes could unlock further shareholder value.
Omnicom, the proposed acquirer of Digital Commerce, has confirmed its
participation in the sale process for Hudson MX.

 

·     As both the Digital Commerce Sale and the WGSN Sale are "Class 1"
transactions for Ascential under the Listing Rules, the Transactions will be
subject to approval by Ascential shareholders and the resolutions will be
inter-conditional. A circular containing further details of the Transactions
and a notice convening a general meeting of Ascential will be sent to
shareholders in due course.

 

·     The Transactions are also subject to the satisfaction of certain
conditions, including in relation to regulatory matters.

 

·     The Transactions are expected to complete by the end of Q1 2024.

 

Leadership

 

·     On completion of the Digital Commerce Sale, Duncan Painter, currently
Chief Executive Officer of Ascential, will join Omnicom and take on a new role
as CEO of Flywheel Digital, a newly created practice area of Omnicom, which
will operate the Digital Commerce business. Accordingly, Duncan Painter will
step down from the Board of Ascential on completion of the Digital Commerce
Sale.

 

·     As previously announced, Philip Thomas, currently Chief Executive
Officer of Ascential Intelligence and Events, will be appointed as Chief
Executive Officer of Ascential and will join the Board of Ascential on
completion.

 

·     Scott Forbes and Mandy Gradden, currently Chairman and Chief
Financial Officer of Ascential, respectively, will continue in their roles.

 

·     Independent non-executive directors Joanne Harris and Charles Song
will step down from the Board of Ascential on completion of the Digital
Commerce Sale. All other Ascential independent non-executive directors will
continue in their roles.

 

·     The Ascential Board will continue to ensure that it has the right
balance of skills and expertise to meet the needs of the Ascential Group as it
enters its new strategic phase.

 

Scott Forbes, Chairman, Ascential plc, said:

 

"The Board firmly believes that the proposed sales of Digital Commerce and
WGSN represent excellent value for shareholders, including the return of a
significant portion of the combined proceeds. Furthermore, these actions are
compelling in that they will enable us to achieve the objectives of the
strategic review, addressing the distinct investment propositions of
Ascential's three businesses, while also better positioning each business to
achieve their growth ambitions."

 

Duncan Painter, CEO, Ascential plc, said:

 

"We are delighted that we have found excellent owners for both Digital
Commerce and WGSN that will allow each business to flourish and take the next
steps to pursue their own individual ambitions. Omnicom's and Digital
Commerce's complementary technology and data platforms, together with their
strong client relationships will be instrumental in accelerating the
realisation of Digital Commerce's strategy, and WGSN is also well set for its
next chapter of growth under new ownership. Ascential's continuing business
with its world-leading Events brands remains well-positioned to succeed as a
high quality, independent UK-listed business."

 

Notes

(1)   Rebranded as "Flywheel" from 24 October 2023

(2)   Based on a GBP to USD exchange rate of 1.21 as at close of business on
27 October 2023.

(3)   Based on a closing share price of 215.6 pence on 27 October 2023 and
shares outstanding of 444,570,568.

(4)   Based on a closing share price of 208.0 pence on 24 January 2023 and
shares outstanding of 440,212,104.

(5)   Excludes RWRC, disposed of in December 2022

 

 

J.P. Morgan is acting as Lead Financial Adviser, Joint Sponsor and Joint
Corporate Broker to Ascential. Deutsche Numis is acting as Joint Financial
Adviser, Joint Sponsor and Joint Corporate Broker to Ascential. Rothschild
& Co is acting as Independent Financial Advisor to Ascential. Slaughter
and May, Fried, Frank, Harris, Shriver & Jacobson LLP and Travers Smith
LLP are acting as legal counsel to Ascential. Latham & Watkins (London)
LLP is acting as legal counsel to J.P. Morgan and Deutsche Numis in their
capacity as Joint Sponsors.

 

Analyst & Investor Briefing

 

Ascential will host a presentation for analysts and investors at 9.30am on 30
October 2023.  This presentation will be webcast on www.ascential.com
(http://www.ascential.com/) and a recording will also be available on-demand
from our website in due course.

 

Conference Call Dial In

 

Operator Assisted Dial-In:

United Kingdom (Local): +44 20 4587 0498

United Kingdom (Toll-Free): +44 800 358 1035

United States (Local):  +1 646 787 9445 / +1 646 664 1960

United States (Toll-Free): +1 855 979 6654 / +1 800 249 2588

 

Access Code: 994758

 

Enquiries:

 

 Ascential plc
 Duncan Painter, Chief Executive Officer   +44 (0)20 7516 5000
 Mandy Gradden, Chief Financial Officer
 Rory Elliot, Investor Relations Director

 FTI Consulting LLP, Media enquiries
 Matt Dixon                                +44 (0)20 3727 1000
 Jamie Ricketts
 Edward Bridges

About Ascential

 

Ascential delivers specialist information, analytics, events, and eCommerce
optimisation to the world's leading consumer brands and their ecosystems. Our
world-class businesses improve performance and solve customer problems by
delivering immediately actionable information combined with visionary
longer-term thinking across Digital Commerce, Product Design, Marketing and
Retail & Financial Services.

 

With more than 3,500 employees across six continents, we combine local
expertise with a global footprint for clients in over 120 countries. Ascential
is listed on the London Stock Exchange.

 

 

ASCENTIAL PLC

 

Proposed sale of Digital Commerce and WGSN

 

1.         Background

 

On 11 April 2022, Ascential confirmed that it was evaluating the optimal
organisational and capital structure for its businesses to successfully
deliver on the Company's strategy and to maximise shareholder value, including
an assessment of the merits of a managed separation of certain assets
comprising the Ascential Group (the "Strategic Review").

 

On 25 January 2023, Ascential announced the conclusion of the Strategic
Review, stating its intention to undertake a series of inter-conditional
transactions intended to recognise the distinct investment propositions of
Ascential's businesses, and better position each of Digital Commerce, WGSN and
Events to independently pursue and achieve their growth ambitions, whilst also
realising the best near- and long-term value for shareholders.

 

At the time, the Ascential Board intended to implement a managed separation of
Digital Commerce into an independent, publicly traded company listed in the
United States, alongside the WGSN Sale, allowing for a significant portion of
the proceeds to be returned to shareholders. Ascential's world-leading Events
business would continue with its existing UK listing as Ascential plc.

 

During the course of this process, Ascential received a compelling offer for
Digital Commerce from Omnicom. The value and greater certainty that the offer
would deliver to Ascential shareholders represents an attractive, credible and
reliable outcome, which the Ascential Board considered superior to pursuing a
public listing of Digital Commerce especially in combination with the WGSN
Sale and the resulting ability of the Board to return significant value to
shareholders. The Digital Commerce Sale does not require Ascential to allocate
substantial working capital to Digital Commerce (which would have been
required had it been separated into an independent, publicly listed company in
the United States).

 

The Transactions are subject to approval by Ascential shareholders and the
resolutions will be inter-conditional. The Ascential Board believes that
presenting shareholders with a comprehensive solution to unlock value across
the Ascential Group is integral to achieving the objectives of the Strategic
Review. Continuing to operate a portfolio of businesses, if either Digital
Commerce or WGSN were retained alongside Events, would result in ongoing
significant organisational and capital allocation challenges for the
continuing listed group, and impact value creation from the Ascential Board's
strategic actions both now and in the future, as well as impacting the amount
of capital to be returned shareholders.

 

2.         Transaction Benefits

 

The Ascential Board believes that the Transactions are in the best interests
of Ascential shareholders, bringing the following benefits:

 

The Transactions realise an attractive valuation for Digital Commerce and
WGSN, unlocking the sum of the parts valuation discount applied to Ascential's
portfolio of businesses

 

The Transactions are expected to realise combined proceeds of approximately
£1,210 million representing 126% of Ascential's market capitalisation
immediately prior to this announcement, and 132% of Ascential's market
capitalisation immediately prior to 25 January 2023, when Ascential announced
the conclusion of the Strategic Review, before taking into account any future
proceeds in relation to the WGSN Sale. In contrast, for the twelve-month
period ended 30 June 2023, Digital Commerce and WGSN, in aggregate,
represented 63% and 46% of the Ascential Group's revenues and Adjusted EBITDA,
respectively (before allocation of corporate costs).

 

Ascential shareholders would also continue to own Ascential's world-leading
Events business, which comprises Lions (including WARC) and Money20/20 and
will be positioned for continued success as a high quality, independent
UK-listed business. For the twelve-month period ended 30 June 2023, Events
delivered revenues of £213 million and Adjusted EBITDA of £85 million((5))
(before allocation of corporate costs).

 

Ascential has engaged in a comprehensive and competitive sale process in
respect of the WGSN Sale, and extensively weighed the merits of the Digital
Commerce Sale against those of an independent listing of Digital Commerce in
the United States, alongside other potential strategic alternatives for
Digital Commerce. The Ascential Board believes the value to be achieved from
the Transactions represents a compelling outcome for Ascential and its
shareholders, unlocking the sum of the parts valuation discount applied to
Ascential's portfolio of businesses, and positioning each of Ascential's
businesses for continued long-term success.

 

The Board intends to return a significant portion of the proceeds of the
Transactions to Ascential shareholders

 

Having considered the capital requirements of Ascential's Events business,
alongside consultation with the Company's largest shareholders, the Ascential
Board intends to return approximately £850 million of the proceeds of the
Transactions to shareholders, representing 89% of Ascential's market
capitalisation immediately prior to this announcement, and 93% of Ascential's
market capitalisation immediately prior to 25 January 2023, when Ascential
announced the conclusion of the Strategic Review and its intention to
undertake a managed separation of the Ascential Group.  The Board currently
intends to return this value to shareholders by way of a special dividend,
although the quantum, timing and form of any return of value remains at the
discretion of the Ascential Board. Further information will be announced in
due course after completion of the Transactions.

 

The balance of the proceeds after return of value to shareholders, will be
used to pay taxes, transaction and separation costs incurred in relation to
the Transactions of approximately £143 million and to repay amounts drawn
under Ascential's current debt facility.  New debt facilities are expected to
fund Ascential's standalone Events business which will target a Net Debt to
Adjusted EBITDA ratio of 1-2x over the medium term.

 

The Transactions will position Ascential's world-class Events business for
continued success as a high quality, standalone UK-listed business, unlocking
significant operational benefits and accelerating its strategy

 

Following the Transactions, Ascential's world-leading Events business will
continue as an independent UK-listed business, with a strong revenue, margin
and cash flow profile. Adjusted EBITDA for the Events business was £85
million((5)) for the 12-month period ended 30 June 2023 (before allocation of
corporate costs). Events comprises some of the best assets in the industry,
delivering premium global business-to-business events for the marketing and
financial technology industries, through LIONS and Money20/20. LIONS also
includes WARC, a global authority on marketing effectiveness, and the recent
addition of Contagious, the creative insights platform.

 

As a standalone, well-capitalised UK-listed business, Ascential's Events
business will be well positioned to execute its own clear strategy of pursuing
organic growth through: (i) greater penetration of existing markets; (ii)
geographical expansion; (iii) pricing optimisation opportunities; and (iv)
product innovation. Ascential will be able to allocate capital and other
resources to Events to meet its distinct needs, driving these organic growth
levers, as well as helping the business utilise identified inorganic growth
levers through bolt on acquisitions and the entry into adjacent markets.

 

Accordingly, Ascential's streamlined and focused Events business will be well
positioned to capitalise on strategic growth opportunities in the markets that
it serves, driving significant long-term value for shareholders.

 

3.         Expected Timetable

 

Each of the Digital Commerce Sale and the WGSN Sale is a "Class 1" transaction
for Ascential under the Listing Rules and is therefore conditional on the
approval of Ascential's shareholders by ordinary resolution.  The resolutions
to approve the transactions will be inter-conditional.

 

Each of the Transactions are also subject to certain conditions, including in
relation to regulatory matters.

 

A circular containing further details of the Transactions and a notice
convening a general meeting of Ascential will be sent to shareholders in due
course. Completion of the Transactions is expected by the end of Q1 2024, with
the return of value to shareholders expected to follow completion, with a
portion of the return of value subject to the completion of a refinancing of
the Ascential Events business. Further information regarding the quantum,
timing and form of the return of value will be announced in due course
following completion of the Transactions.

 

4.         Information on Digital Commerce

 

Digital Commerce provides a leading cloud-based digital commerce platform
enabling clients, predominantly consumer product brands, to improve their
sales, share and profit in near real-time across the world's leading digital
marketplaces. It provides leading technological capabilities and connectivity
to these and other major digital marketplaces globally, seeking to deliver the
most advanced levels of digital automation, performance, and optimisation for
its clients.

 

Digital Commerce serves a broad spectrum of clients ranging from the largest
global enterprise brands, to smaller, digitally-native emerging brands and
channel partners, who include agencies and specialist outsource partners,
digital-native brand consolidators and software or service partners.

 

Digital Commerce has built, and continues to develop, an industry-defining
platform that enables these brands to grow their sales across this digital
commerce ecosystem. Clients of Digital Commerce use these solutions and
expertise to drive growth and navigate the challenges of selling through
digital marketplaces.

 

For the financial year ended 31 December 2022, Digital Commerce had revenues
of £226 million, Adjusted EBITDA of £21 million (before allocation of
corporate costs) and gross assets of £952 million.

 

5.     Information on WGSN

 

WGSN is a leading global consumer trend forecaster, serving customers across
multiple product design industries, enabling them to understand their future
consumers' changing attitudes and lifestyles and create the exact products and
experiences those consumers will need. WGSN's market and trend expertise,
proprietary data and advanced data science and analytics capabilities enable
it to provide consumer insights and trend forecasts to both global
corporations and small-and-medium-size enterprises in a wide range of
industries, including the fashion, home and interiors, food and drink, beauty,
health and wellness, automotive, finance and lifestyle.

 

WGSN's proprietary methodology allows it to collate thousands of inputs from
quantitative and qualitative sources, to deliver accurate consumer, trend and
product design forecasts ensuring its global client base can anticipate future
needs and adapt their future strategy to create the products, services and
experiences people will want and need.

 

WGSN provides information through its digital subscription platforms to over
6,500 customers in more than 90 countries. WGSN employs a team of over 250
in-house experts and data scientists.

 

For the financial year ended 31 December 2022, WGSN had revenues of £107
million, Adjusted EBITDA of £49 million (before allocation of corporate
costs) and gross assets of £200 million.

 

6.         Information on Omnicom

 

Omnicom is a leading global marketing and corporate communications company.
Its branded networks and numerous speciality firms offer services in
advertising, strategic media planning and buying, precision marketing,
commerce and branding, customer relationship management (CRM), public
relations, healthcare marketing, and other speciality communications services
to over 5,000 clients in more than 70 countries.

 

7.         Information on Apax and Bidco

 

Apax Partners LLP ("Apax") is a leading global private equity advisory firm.
For 50 years, Apax has worked to inspire growth and ideas that transform
businesses. The firm has raised and advised funds with aggregate commitments
of more than US$65 billion. Funds advised by Apax invest in companies across
four global sectors, being Tech, Services, Healthcare, and Internet/Consumer,
and provide long-term equity financing to build and strengthen world-class
companies.

 

Bidco is a private limited company incorporated in England and Wales. Bidco is
a newly-formed company indirectly owned by the Apax Funds. Bidco was formed
for the purposes of the WGSN Sale and has not traded since its date of
incorporation, nor has it entered into any obligations other than in
connection with the WGSN Sale.

 

8.         Trading Updates

 

Digital Commerce's third quarter revenue growth has been very strong, at 27%,
substantially above first half revenue growth of 10%, with brand consolidation
synergies expected to result in improved EBITDA from the fourth quarter.

 

For WGSN, growth in subscription billings in the third quarter of 4% was lower
than the 7% growth recorded in the first half, although cost discipline has
ensured the maintenance of strong margins.

 

Within the Events business, Money20/20 held a successful US edition in
October. As previously guided, disruption to the end market funding
environment impacted the revenue of this year's event, which while over 50%
higher than the pre-COVID benchmark in 2019 was down by 8% compared to the
2022 edition. While still very early in the cycle for the 2024 events, Lions'
forward bookings for the June 2024 edition are ahead of the prior year and
bookings for Money20/20 Europe in June 2024 are in line with the prior year.

 

9.         Principal Terms of the Digital Commerce Sale

 

On 30 October 2023, Ascential Financing Limited, a direct subsidiary of
Ascential, ("Ascential Financing") and Ascential entered into a sale and
purchase agreement (the "Digital Commerce Sale and Purchase Agreement")
pursuant to which Ascential Financing agreed, on the terms and subject to the
conditions of the Digital Commerce Sale and Purchase Agreement, to sell
Digital Commerce to Omnicom.

 

The consideration, subject to closing adjustments, for the sale of Digital
Commerce will be $900 million (approximately £741 million) (the "Digital
Commerce Consideration"), which will be paid in cash on completion of the
Digital Commerce Sale (the "Digital Commerce Sale Completion").

 

The Digital Commerce Consideration is subject to customary closing
adjustments, including for: (i) working capital; (ii) cash; (iii) certain
transaction expenses; (iv) debt-like items; and (v) certain other specified
matters, resulting in expected proceeds from Omnicom of $835 million
(approximately £688 million).  In addition, Ascential expects to make
certain early earnout settlements of approximately $50 million prior to
closing.

 

After adjusting for the above, and other customary closing adjustments, the
proceeds from the Digital Commerce Sale are expected to be approximately $775
million (approximately £638 million).

 

Prior to completion of the Digital Commerce Sale, Ascential will complete a
group reorganisation to facilitate the separation of Digital Commerce from the
remainder of the Ascential.

 

In the Digital Commerce Sale and Purchase Agreement, Ascential Financing made
customary representations and warranties to Omnicom for a transaction of this
nature, including customary business warranties in respect of Digital
Commerce. Ascential Financing shall have no material liability in respect of
these general business warranties (save in the case of fraud) as Omnicom has
purchased a representation and warranty insurance policy in respect of the
Digital Commerce Sale.

 

Under the Digital Commerce Sale and Purchase Agreement, Ascential Financing
has agreed to reimburse Omnicom's reasonable fees and expenses incurred in
relation to the Digital Commerce Sale (up to a cap of £4.8 million) in
certain circumstances where the Digital Commerce Sale fails to complete.

 

The Digital Commerce Sale and Purchase Agreement also provides that Omnicom is
to be indemnified for certain matters, including:

 

·     losses Omnicom suffers resulting from any failure on the part of
Ascential Financing or Ascential to comply with its post-completion
obligations, including a three-year non-competition obligation and obligations
relating to tax matters,

·     liabilities relating to Ascential's businesses, other than Digital
Commerce, and

·     pre-closing tax liabilities, including sales taxes and taxes
relating to the pre-closing restructuring steps of the Digital Commerce.

 

The Digital Commerce Sale is conditional upon, among other things:

·     the passing of shareholder resolutions approving the Digital
Commerce Sale and the WGSN Sale at a general meeting of the Company,

·     completion of certain pre-closing restructuring steps, such that, in
accordance with the terms of the Digital Commerce Sale and Purchase Agreement,
the Digital Commerce Sale Completion can occur, and

·     the satisfaction of regulatory related conditions (including from
relevant antitrust authorities).

 

The Digital Commerce Sale and Purchase Agreement is governed by New York state
law.

 

Further detail regarding the terms of the Digital Commerce Sale will be
provided in the shareholder circular.

 

10.       Principal Terms of the WGSN Sale

 

On 30 October 2023, Ascential Financing entered into a sale and purchase
agreement (the "WGSN Sale and Purchase Agreement") pursuant to which Ascential
Financing has agreed, on the terms and subject to the conditions of the WGSN
Sale and Purchase Agreement, to sell WGSN to Bidco.

The consideration for the WGSN Sale comprises:

 

·     consideration of up to £700 million, which is subject to customary
closing adjustments, including for: (i) working capital; (ii) cash; (iii)
certain transaction expenses; (iv) debt-like items; and (v) certain other
specified liabilities, and which includes contingent consideration payable
whereby if, on the eventual disposal of the majority of shares held by the
Apax Funds in the ultimate holding company of WGSN, an IPO or a disposal of
the majority of the assets of WGSN (an "Eventual Exit"), the Apax
Funds achieve a 3.5x return on their invested capital (the "Threshold
Return"), Ascential will be entitled to a payment equal to 50% of the total
proceeds payable to all shareholders on the relevant Eventual Exit in excess
of the proceeds which would have been required to deliver to the Apax
Funds the Threshold Return only, subject to a maximum amount of £50 million.

 

After adjusting for the above (and assuming no contingent consideration is
paid), the proceeds from the WGSN Sale are expected to be approximately £572
million.

 

Prior to completion of the WGSN Sale, Ascential will complete a group
reorganisation to facilitate the separation of WGSN from the remainder of the
Ascential Group.

 

In the WGSN Sale and Purchase Agreement, Ascential Financing has given
customary warranties to Bidco for a transaction of this nature, including
customary business warranties in respect of WGSN. Ascential Financing shall
have no material liability in respect of these general business warranties
(save in the case of fraud or fraudulent misrepresentation) as Bidco intends
to purchase a warranty insurance policy in respect of the WGSN Sale and
Ascential Financing's liability is limited accordingly.

 

Under the WGSN Sale and Purchase Agreement, Ascential Financing has agreed to
reimburse Bidco's reasonable fees and expenses incurred in relation to the
WGSN Sale (up to a cap of £4.8 million) in certain circumstances where the
WGSN Sale fails to complete.

 

The WGSN Sale and Purchase Agreement also provides that Bidco is to be
indemnified for certain matters, including:

 

·     certain non-tax related losses which arise from certain matters
undertaken in connection with the separation of WGSN;

·     tax arising as a result of the separation of WGSN and certain other
tax related matters; and

·     certain losses that WGSN or Bidco suffers or incurs as a result of a
claim against WGSN under the Digital Commerce Sale and Purchase Agreement.

 

The WGSN Sale is conditional upon, among other things:

 

·     the passing of shareholder resolutions approving the Digital Commerce
Sale and the WGSN Sale at a general meeting of the Company,

·     completion of certain pre-signing restructuring steps, and

·     satisfaction of customary regulatory approvals (including from
relevant antitrust authorities).

 

Ascential Financing's obligations under the WGSN Sale and Purchase Agreement
are guaranteed by Ascential.

 

The WGSN Sale and Purchase Agreement is governed by English law.

 

Further detail regarding the terms of the WGSN Sale will be provided in the
shareholder circular.

 

 

IMPORTANT NOTICES

 

This announcement contains inside information and is issued on behalf of the
Ascential Group by Louise Meads, Company Secretary.

 

This announcement is not intended to, and does not constitute or form part of,
any offer to sell or issue or any solicitation of an offer to purchase,
subscribe for, or otherwise acquire, any securities or a solicitation of any
vote or approval in any jurisdiction. Ascential shareholders are advised to
carefully read the Circular once it has been published. Any voting decision in
respect of the Transactions should be made only on the basis of the
information in the Circular.

 

J.P. Morgan Securities plc, which conducts its UK investment banking business
as J.P. Morgan Cazenove ("J.P. Morgan"), is authorised in the United Kingdom
by the Prudential Regulation Authority (the "PRA") and regulated in the United
Kingdom by the Financial Conduct Authority (the "FCA") and the PRA. J.P.
Morgan is acting Lead Financial Adviser, Joint Sponsor and Joint Corporate
Broker exclusively for the Company and no one else in connection with the
Transactions and the matters set out in this announcement and will not regard
any other person (whether or not a recipient of this announcement) as its
client in relation to the Transactions and will not be responsible to anyone
other than the Company for providing the protections afforded to clients of
J.P. Morgan or its affiliates, or for providing advice in relation to the
Transactions or any other matters referred to in this announcement.

 

Numis Securities Limited (which is trading for these purposes as Deutsche
Numis) ("Deutsche Numis") is authorised and regulated in the United Kingdom by
the FCA. Deutsche Numis is acting as acting Joint Financial Adviser, Joint
Sponsor and Joint Corporate Broker exclusively for the Company and no one else
in connection with the Transactions and the matters set out in this
announcement and will not regard any other person (whether or not a recipient
of this announcement) as its client in relation to the Transactions and will
not be responsible to anyone other than the Company for providing the
protections afforded to clients of Deutsche Numis or its affiliates, or for
providing advice in relation to the Transactions or any other matters referred
to in this announcement.

 

Rothschild & Sons Limited ("Rothschild & Co"), which is authorised and
regulated by the Financial Conduct Authority in the United Kingdom, is acting
as Independent Financial Advisor exclusively for Ascential and for no one else
in connection with the subject matter of this announcement and will not be
responsible to anyone other than Ascential for providing the protections
afforded to its clients or for providing advice in connection with the subject
matter of this announcement.

 

Apart from the responsibilities and liabilities, if any, which may be imposed
on J.P. Morgan, Deutsche Numis or Rothschild & Co by FSMA or the
regulatory regime established thereunder or under the regulatory regime of any
jurisdiction where the exclusion of liability under the relevant regulatory
regime would be illegal, void or unenforceable, J.P. Morgan, Deutsche Numis,
Rothschild & Co and any person affiliated with them assumes no
responsibility whatsoever for and makes no representation or warranty express
or implied, in relation to the contents of this announcement, including its
accuracy, completeness or verification or for any other statement made or
purported to be made by it, or on its behalf and nothing contained in this
announcement is, or shall be, relied upon as a promise or representation in
this respect whether as to the past, present or future, in connection with the
Company, or the Transactions. J.P. Morgan, Deutsche Numis, Rothschild & Co
and their respective subsidiaries, branches and affiliates accordingly
disclaims to the fullest extent permitted by law all and any duty,
responsibility and liability whether arising in tort, contract or otherwise
(save as referred to above) which it might otherwise be found to have in
respect of this announcement or any such statement or otherwise.

 

Neither the contents of the Company's website nor any website accessible by
hyperlinks on the Company's website is incorporated in, or forms part of, this
announcement.

 

This announcement contains "forward-looking statements" which includes all
statements other than statements of historical fact, including, without
limitation, those regarding the Company's financial position, business
strategy, plans and objectives of management for future operations, or any
statements preceded by, followed by or that include the words "targets",
"believes", "expects", "aims", "intends", "will", "may", "anticipates",
"would, "could" or similar expressions or negatives thereof. Such
forward-looking statements involve known and unknown risks, uncertainties and
other important factors beyond the Company's control that could cause the
actual results, performance or achievements of the Company to be materially
different from future results, performance or achievements expressed or
implied by such forward-looking statements. Such forward-looking statements
are based on numerous assumptions regarding the Company's present and future
business strategies and the environment in which the Company will operate in
the future. These forward-looking statements speak only as at the date of this
announcement. None of the Company, J.P. Morgan, Deutsche Numis, Rothschild
& Co or their respective affiliates undertakes or is under any duty to
update this announcement or to correct any inaccuracies in any such
information which may become apparent or to provide you with any additional
information, other than any requirements that the Company may have under
applicable law or the Listing Rules, the Prospectus Regulation Rules, the
Disclosure Guidance and Transparency Rules or the Market Abuse Regulation MAR
(EU No. 596/2014) as it forms part of domestic law by virtue of the European
Union (Withdrawal) Act 2018). To the fullest extent permissible by law, such
persons disclaim all and any responsibility or liability, whether arising in
tort, contract or otherwise, which they might otherwise have in respect of
this announcement. The information in this announcement is subject to change
without notice.

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