# Ascential to sell its digital commerce & product design businesses

- Link: https://www.directorstalkinterviews.com/ascential-to-sell-its-digital-commerce-product-design-businesses/4121131271
- Published: 2023-10-30T08:21:17+00:00
- Author: Amilia Stone

**Ascential plc** (LON:ASCL), has announced that it has entered into agreements,
subject to shareholder approval, to sell its digital commerce business^((1)) to 
Omnicom Group Inc., and its product design business to Wind UK Bidco 3 Limited, 
a newly-formed company established by funds advised by Apax Partners LLP 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 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

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