Bain Capital acquires majority stake in Kantar from WPP valuing the data and research firm at EUR 3.54 billion

Bain Capital acquires majority stake in Kantar from WPP valuaing the data and research firm at EUR 3.54 billion

Bain Capital acquires majority stake in Kantar from WPP valuing the data and research firm at EUR 3.54 billion

(PRESS RELEASE) LONDON, 15-Jul-2019 — /EuropaWire/ — Kantar, WPP’s global data, research, consulting and analytics business, will be acquired by Bain Capital according to an agreement signed by WPP and Bain Capital. The deal sees Bain Capital taking over the majority stake (60%) in Kantar putting an enterprise value of it at approximately $4.0 billion (~ £3.2 billion / ~ €3.5 billion). The deal was envisaged back in October 2018 when WPP’s board considered that the best way to unlock Kantar’s potential and maximise shareholder value was to find a strategic or financial partner. Today’s acquisition will create a strong partnership for the development and growth of Kantar.

Since then there has been significant levels of interest in Kantar from potential financial partners with Bain Capital winning the deal. The partnership, according to the WPP Board, will allow Kantar to strengthen its industry-leading position through the combined expertise and resources of Bain Capital and WPP. The deal also brings significant value to WPP’s shareholders while giving them continued exposure to an attractive business with the potential for further value realisation in the future.

The acquisition is expected to complete in early 2020 and is subject to the satisfaction of certain conditions. First, since the deal is a Class 1 transaction for WPP under the Listing Rules, the acquisition needs to be approved by WPP’s shareholders. Second, the parties will have to obtain antitrust approvals for the transaction from regulators in the European Union, the United States, Brazil, China, Russia, Turkey, South Korea, South Africa and Mexico. And third, completion of such proportion of the Kantar Reorganisation such that prior to First Completion, WPP is in a position to complete on the sale of Kantar entities representing not less than 90% of the total FY18 EBITDA of the Kantar business. WPP may waive this threshold down to 86% of the total Fiscal Year 2018 EBITDA of the Kantar business.

Following the completion, the proceeds to WPP after tax and further investment in Kantar expected to be around $3.1 billion (~ £2.5 billion / ~ €2.75 billion). WPP plans to retain approximately 60% of the net proceeds to reduce debt to the low end of the target leverage range of 1.5 – 1.75x average net debt/EBITDA for 2020. Approximately of $1.2 billion (~ £1.0 billion / ~ €1.06 billion) is planned to be returned to shareholders. The way these proceeds will be returned to the shareholders will be communicated in separate announcements.

The impact of the deal and the use of proceeds is expected to be mid single digits % dilutive to headline earnings per share in 2020 and marginally dilutive to headline earnings per share in 2021.

No change in WPP’s dividend policy as a result of this deal.

Commenting on the WPP / Bain Capital deal, Mark Read, Chief Executive Officer, WPP, said:

“Kantar is a great business and we look forward to working with Bain Capital to unlock its full potential. As a strategic partner and shareholder in Kantar, WPP will continue to benefit from its future growth while our clients continue to benefit from its services and capabilities. I would like to thank Eric Salama, his team and everyone at Kantar for their tremendous contribution to WPP – a contribution that will continue as we develop the business together. This transaction creates value for WPP shareholders and further simplifies our company. With a much stronger balance sheet and a return of approximately 8% of our current market value to shareholders planned, we are making good progress with our transformation.”

Commenting on the Kantar acquisition, Luca Bassi, a Managing Director at Bain Capital Private Equity, said:

“Kantar is a market leader in many areas and we are excited to be partnering with its management team and WPP to build on this remarkable platform for growth. We see many opportunities for expansion and will invest in technology to expand the company’s capabilities and reinforce its global leading position.”

Commenting on driving Kantar’s business forward, Christophe Jacobs van Merlen, a Managing Director at Bain Capital Private Equity, said:

“We believe that we are well-positioned to support Kantar, alongside WPP, in driving forward the business in a rapidly changing industry. Our deep sector knowledge, operational expertise and strong track record of partnering with management teams to accelerate growth gives us confidence that we can help Kantar grow both organically and by acquisition.”

Commenting on Kantar’s new ownership, Eric Salama, CEO, Kantar, said:

“Our new ownership structure presents a great opportunity for Kantar, our employees and our clients. In Bain Capital we have a partner who shares our ambition, brings relevant expertise and – with WPP – can help us accelerate our growth and impact for clients. We are focused on delivering ‘human understanding at scale and speed’ and the ‘best of Kantar’ more consistently. We will do so by investing more in talent and by becoming a more technology-driven solutions provider.”

Media, investor and analysts contacts:

WPP:

Peregrine Riviere +44 7909 907193
Lisa Hau +44 7824 496015
Fran Butera (US) +1 914 484 1198

Chris Wade +44 20 7282 4600
Kevin McCormack (US) +1 212 632 2239
Juliana Yeh (Asia) +852 2280 3790

Richard Oldworth, +44 20 7466 5000
Buchanan Communications +44 7710 130 634

Goldman Sachs International:

Anthony Gutman
Devin Wilde
+44 20 7774 1000

Ardea Partners:

James Del Favero
Will Skolnik
+44 20 3848 8700

BofA Merrill Lynch:

Ian Ferguson
Richard Abel
+44 20 7628 1000

Lazard: