REG - GlobalData PLC - Investment in Healthcare Division by Inflexion

GlobalDataAnnouncement

21/12/2023 07:15

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RNS Number : 5942X  GlobalData PLC  21 December 2023

21 December 2023

 

 

FOR IMMEDIATE
RELEASE
 
 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (596/2014/EU) AS THE SAME HAS BEEN RETAINED IN UK
LAW AS AMENDED BY THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI
2019/310) ("UK MAR").

 

GlobalData Plc

(AIM: DATA; "GlobalData", "the Company", "the Group")

 

GlobalData announces a Group reorganisation and enters into a transformational
investment agreement with Inflexion for a significant minority stake in its
Healthcare division

 

Highlights

·      Launch of new growth plan and Group reorganisation to operate
across three customer-focused divisions - Healthcare, Consumer, and
Technology.

·      Inflexion acquires a 40% shareholding in GlobalData's Healthcare
division at a valuation of £1,115m, which represents a 22x multiple of June
2023 LTM EBITDA for the division (on a standalone basis).

·      This compares to a market capitalisation of £1,352m for the
entire GlobalData Group (at the close of market on 20 December). The
Healthcare division represented 36% of GlobalData Group's June 2023 LTM
revenue.

·      GlobalData Plc expects to receive net cash proceeds of
approximately £434m, which will provide flexibility for accelerated
value-creating M&A across the Group.

·      GlobalData Plc will own the remaining 60% of GlobalData
Healthcare, which will continue to be a fully consolidated subsidiary of
GlobalData Plc.

·      Transaction is expected to close during Q2 2024.

 

Mike Danson, CEO of GlobalData, said: "This is a significant milestone in
GlobalData's evolution, and we are delighted to welcome Inflexion as a
shareholder in our Healthcare division. The investment highlights the
significant value in our unique data platform and gives us the flexibility to
launch a more ambitious approach to growth investment across our portfolio. We
believe that we can create substantial value for all shareholders and
accelerate GlobalData's profitable growth over the coming years."

 

David Whileman, Partner and Head of Partnership Capital at Inflexion, said:
"GlobalData is renowned for creating data and analytical insight for its
clients across many verticals. We are really excited about our partnership
with them to carve out and expand an independent Healthcare division. This is
a tried and tested strategy we've successfully pursued many times and another
example of Inflexion being the leading minority investment partner."

 

 

Group Reorganisation and Investment by Inflexion

 

Background

 

Fuelled by the Growth Optimisation Plan, GlobalData Group revenues have grown
by more than 50% over the last five years, from £178m in 2019 to over £270m
expected in 2023. GlobalData now serves more than 4,700 customers with its
world class multi-industry platform. The Group has been strategically
transformed with significant organic investment across technology and AI,
enhanced go-to-market capabilities, as well as an excellent track record of
value creating M&A.

 

One of the most important pillars in the Growth Optimisation Plan is Customer
Obsession. The focus has been to 1) develop a trusted, global brand synonymous
with delivering exceptional customer value and service; 2) build a global
community of engaged industry professionals; and 3) maintain a
customer-centric culture that informs the Group's strategy, operating model,
and business decisions. The success of GlobalData's Healthcare division
highlights the tremendous growth and value opportunity from a focused approach
to Customer Obsession. Under the new growth plan, GlobalData will elevate its
customer-focused approach throughout the group, driving value-enhancing
revenue and margin expansion.

 

GlobalData will host a capital markets event in Q1 2024 to provide further
detail on the new growth strategy.

 

Investment by Inflexion

 

Monument Bidco Limited (an investment vehicle wholly owned by funds managed or
advised by Inflexion Private Equity Partners LLP ("Inflexion")) has agreed to
acquire a 40% minority shareholding in Washington Topco Limited ("Topco"), a
new entity established as the holding vehicle for GlobalData's Healthcare
division. GlobalData expects to receive net cash proceeds of approximately
£434m. The investment by Inflexion, a leading investor in the sector,
represents a strong endorsement and provides a meaningful partner to drive the
Healthcare division's growth. The majority shareholding of 60% in Topco will
remain with GlobalData, and Topco and its subsidiaries will continue to be
fully consolidated subsidiaries of GlobalData. The Transaction is expected to
close during Q2 2024 and is subject to regulatory clearance and completion of
the reorganisation of the Healthcare division into a separate corporate group
headed by Topco.

 

GlobalData Healthcare's subscription service offers a one-stop solution for
over 2,000 global customers across large global pharma, pharma & biotech,
pharma suppliers, professional services and medical devices manufacturers. The
proprietary Intelligence Centre platform that the business has developed
provides actionable insights into trends related to drugs, trials and
therapeutic reports, supporting research and development of pharmaceuticals,
and ultimately informing business intelligence decisions. The division
generated June 2023 LTM EBITDA of £50m (on a standalone basis).

 

The Transaction represents a compelling crystallisation of value for
shareholders, with the Group receiving a significant cash injection to fuel
growth and demonstrates the significant value of its mission-critical data.
The implied value for the Healthcare division on a debt free, cash free basis
is £1,115m, which compares to a market capitalisation of £1,352m for the
entire Group (as at close of market on 20 December).

 

Following the completion of the Transaction, it is anticipated that
GlobalData's balance sheet will go from net debt of £230.8m (as at 30 June
2023), equivalent to 2.3x leverage, to being debt-free and net cash. As well
as improving the profitability and cash flow of the Group, the de-levered
balance sheet allows management additional flexibility to accelerate
value-creating M&A across the Group.

 

GlobalData and Inflexion have entered into a shareholders' agreement, which
will take effect from completion of the transaction, in order to govern the
relationship between them. GlobalData will, save in very limited
circumstances, have a majority of the voting rights on the Board of Directors
of GlobalData Healthcare. Furthermore, in addition to his role as CEO of
GlobalData, Mike Danson will serve as Executive Chairman of GlobalData
Healthcare.

 

GlobalData and Inflexion have also agreed to certain customary provisions in
relation to minority protections, shareholder consent rights and exit
provisions, including drag rights for either shareholder in certain
circumstances (subject to a customary right of first offer for the other
shareholder).

 

 

ENQUIRIES

 

 GlobalData Plc
 Mike Danson, Chief Executive Officer                                    0207 936 6400
 Graham Lilley, Chief Financial Officer

 J.P. Morgan Cazenove (Nomad, Joint Corporate Broker and Sole Financial  0203 493 8000
 Advisor)
 Bill Hutchings
 Mose Adigun
 Alex Bruce

 Panmure Gordon (Joint Broker)                                           0207 886 2500
 Rupert Dearden
 Dougie McLeod

 Deutsche Numis (Joint Broker)                                           0207 260 1000

 Nick Westlake

 Iqra Amin

 FTI Consulting (Financial PR)                                           0203 727 1000
 Edward Bridges
 Dwight Burden
 Emma Hall

 

 

J.P. Morgan Cazenove is acting as Sole Financial Advisor to GlobalData Plc.
Reed Smith LLP is acting as legal counsel to GlobalData.

 

J.P. Morgan Securities plc, which conducts its UK investment banking
activities as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), and which is
authorised in the United Kingdom by the Prudential Regulation Authority and
regulated in the United Kingdom by the Financial Conduct Authority and the
Prudential Regulation Authority, is acting exclusively as sole financial
adviser for GlobalData Plc and no one else in connection with the Transaction
and shall not be responsible to anyone other than GlobalData Plc for providing
the protections afforded to clients of J.P. Morgan Cazenove or its affiliates,
nor for providing advice in connection with the Transaction or any other
matter referred to herein

 

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