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Future Plc

Future plc Acquisition of SmartBrief for an initial sum of $45 million

The Board of Future plc (LON: FUTR), the global platform for specialist media, has today announced the acquisition of SmartBrief, Inc., a leading US based digital media publisher, for an initial sum of $45 million.

The initial $45 million will include a cash consideration of $32.2 million funded from the Group’s existing debt facilities, with a further $12.8 million to be satisfied through the issue to the vendors of 1,027,492 new ordinary shares. The agreement also includes a deferred consideration based on certain financial targets achieved over the year ending 31 July 2020, which is subject to a cap of $20 million.

SmartBrief, headquartered in Washington DC, is a digital media publisher of targeted business news and information, combining technology and editorial expertise to deliver relevant industry news curated from over 1,500 sources. SmartBrief operates in partnership with trade associations, professional societies, non-profits and corporations across a range of verticals including business, education, finance, health care, marketing & advertising, retail and food & travel.

Transaction highlights and rationale

· The Acquisition enhances Future’s proprietary technology stack through the addition of automated email marketing, enhancing Future’s operations as follows:

o Increases scale and product capabilities of B2B division

– Improves B2B market share, more than tripling the subscriber database

– Access to new vertical markets

o Provides access to CRM and email marketing as potential new audience drivers for B2C

o Provides opportunity to utilise the CRM solution for Future’s existing B2B and B2C customers

· Strong financial rationale

o Stable annual revenues of $35.1 million and adjusted EBITDA of $5.0m

o Transaction expected to be earnings enhancing in the current financial year and in the first full year following completion

· Total consideration of up to $65 million

o Initial cash consideration of $32.2 million, with further $12.8 million in shares

o Further variable deferred consideration up to total value of $20 million, subject to achievement of gross contribution target based on the year ending 31 July 2020. Deferred consideration to be in shares or a mixture of cash and shares

o The shares issued in consideration will be subject to lock-up restrictions for a period of six months from the date of issue

o Initial cash consideration funded via Group’s existing debt facilities

Zillah Byng-Thorne, CEO of Future plc, said:

“This acquisition will substantially boost our presence and market position in the B2B sector and enhance our proprietary technology capabilities.

“SmartBrief is a leading, respected provider of sector-focused newsletters and daily email briefings covering a range of key verticals. The addition of SmartBrief’s must-read information products to our portfolio will further extend the reach of our B2B operations.

“The acquisition of SmartBrief will be earnings enhancing and we have identified a number of exciting opportunities to leverage SmartBrief’s proprietary technology in both our B2C and B2B business.”