TIDMDATA
RNS Number : 3282J
GlobalData PLC
29 March 2018
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
29 March 2018
GlobalData Plc
(the "Company")
Proposed acquisition of Research Views Limited,
approval of substantial property transaction and
publication of Circular and Notice of General Meeting
Further to the Company's announcement of 26 February 2018, the
Company announces that it has conditionally agreed to acquire the
entire issued share capital of Research Views Limited, a company
controlled by Michael Danson and Wayne Lloyd (and other minority
shareholders).
Under the terms of the Acquisition, 15,957,447 new Ordinary
Shares will be issued to the vendors of Research Views Limited
(15.6% of the Existing Ordinary Shares), which equates to GBP90.0
million based on the volume weighted average price of an Existing
Ordinary Share of 564 pence over the 30 days prior to the
announcement of the possible acquisition. GlobalData's share price
at the close of business on 23 February 2018, the last business day
before the announcement of the possible acquisition, was 547.5
pence.
In addition, net debt of GBP9.8 million will be assumed by the
Company on Completion, which includes shareholder debt of GBP8.4
million. The Company will procure that the shareholder debt is
repaid by the Research Views Group to Michael Danson and his
associated companies on completion (such repayment to be funded by
the Company's existing banking facilities).
Completion is expected to occur following the General Meeting on
24 April 2018.
The Acquisition is expected to:
-- further advance the Group's transformation into a global data
and analytics business with a truly differentiated multi-industry
offering;
-- add the energy industry to the Group's industries and
complement its existing offering in the healthcare, financial
services and construction industries;
-- generate economies of scale within the Group's enlarged operations; and
-- improve both the quality and visibility of earnings as the
Group increases the subscription mix and focuses on scale
industries.
In FY17 the Research Views Group generated pro forma revenues of
approximately GBP27.0m (an increase of 18.8% over the prior year)
and EBITDA of GBP2.1 million.
It is expected that the trend in the Research Views Group's
revenue growth will continue and that annualised synergies of
approximately GBP1.0 million are achievable following
rationalisation of central costs of the Research Views Group.
Completion of this exercise is anticipated before the end of
December 2018, after which it is expected that an adjusted EBITDA
margin of between 20% and 25% will be achievable by the Research
Views Group on an annualised basis before considering any available
revenue synergies.
The Acquisition is expected to be earnings accretive in the
first full year of ownership.
Commenting on the Acquisition, Bernard Cragg, Chairman of the
Independent Committee of GlobalData, said:
"This transaction consolidates the Group's transformation into a
global data and analytics business with a truly differentiated
multi-industry offering. It is consistent with our focusing on data
and analytics by strengthening our existing industry offerings and
expanding the industries we cover.
The market outlook for data and analytics is encouraging with
real and achievable opportunities for profitable growth."
The Acquisition constitutes a related party transaction for the
purposes of Rule 13 of the AIM Rules and a substantial property
transaction for the purposes of section 190 of the Companies Act
2006. The Independent Directors consider, having consulted with the
Company's nominated adviser, N+1 Singer, that the terms of the
Acquisition are fair and reasonable insofar as Shareholders are
concerned and accordingly intend to recommend unanimously that
Shareholders vote in favour of the Resolutions to be proposed at
the General Meeting as they intend to do so in respect of their own
beneficial holdings of Ordinary Shares.
The Circular is expected to be published later today and will
shortly be made available on the Company's website:
http://www.globaldata.com/. Capitalised terms used but not defined
in this announcement have the meanings set out in the Circular.
Further details of the Acquisition, extracted from the Circular,
are set out below.
GlobalData Plc
Bernard Cragg, Executive
Chairman
Graham Lilley, Chief
Financial Officer 0207 936 6400
N+1 Singer
James Maxwell
James White 0207 496 3000
Hudson Sandler
Nick Lyon 0207 796 4133
Set out below is a reproduction, without material adjustment, of
the key sections of the Chairman of the Independent Committee's
letter to Shareholders and a summary of the principal terms of the
Acquisition Agreement and Reorganisation Agreements, which are
contained within the Circular:
Introduction and summary
Further to the Company's announcement of 26 February 2018, the
Company announces that it has conditionally agreed to acquire the
entire issued share capital of Research Views, a company controlled
by Michael Danson and Wayne Lloyd (and other minority
shareholders).
Under the terms of the Acquisition, 15,957,447 new Ordinary
Shares will be issued to the Vendors (15.6% of the Existing
Ordinary Shares), which equates to GBP90.0 million based on the
volume weighted average price of an Existing Ordinary Share of 564
pence over the 30 days prior to the Announcement. The Company's
share price at the close of business on 23 February 2018, the last
business day before the Announcement, was 547.5 pence.
In addition, the Net Debt will be assumed by the Company on
Completion, which includes the Shareholder Debt. The Company will
procure that the Shareholder Debt is repaid by the Research Views
Group to Michael Danson and his associated companies on Completion
(such repayment to be funded by the Company's existing banking
facilities).
Following completion of the Re-organisation, Research Views is
the parent company of the Research Views Group, which comprises the
RVL Group, the SportCal Group and the Timetric Group. Further
information on the Research Views Group is set out below.
Due to Michael Danson's interests in the Proposals, he is not
considered independent in regards to the Proposals. Accordingly,
the Board has established the Independent Committee, chaired by
Bernard Cragg and solely comprised of Independent Directors, for
the purposes of evaluating the merits of the Proposals and
reporting thereon to the Independent Directors.
Further details of the Acquisition and the Acquisition Agreement
are set out below.
The Acquisition constitutes a substantial property transaction
under section 190 of the Act and consequently requires the approval
of Shareholders.
Additionally, the Acquisition constitutes a related party
transaction for the purposes of Rule 13 of the AIM Rules. The
Independent Directors, having consulted with the Company's
nominated adviser, N+1 Singer, consider the terms of the
Acquisition to be fair and reasonable insofar as Shareholders are
concerned.
Background to and reasons for the Proposals
Background
Acquisitions form an important part of the Company's overall
strategy for growth. The Company seeks out strategic acquisition
opportunities which extend client reach and product coverage within
the Company's markets. Over a reasonable time frame the Company
aims to increase total returns through leveraging existing content
across multiple formats (subscriptions, reports and research
engagements) and geographies.
For example, the Company successfully acquired and integrated
the healthcare business information provider, GlobalData Holding
Limited, a company owned by Michael Danson and Wayne Lloyd (and his
connected parties) in January 2016. This GBP66.5 million
acquisition added a third global industry vertical to the Group's
existing business information proposition and brought management
and operational scale in the important North American market. The
healthcare information business has now been fully integrated and
is being exploited for the benefit of the Enlarged Group.
Information on the Research Views Group and the Acquisition
The Research Views Group is owned by Michael Danson (CEO,
GlobalData) and a number of other minority shareholders including
Wayne Lloyd (Managing Director, GlobalData US).
Following the Re-organisation, the Research Views Group
represents the amalgamation of three data and analytics provider
groups: the RVL Group (energy industry); the Timetric Group
(financial services and construction industry); and the SportCal
Group (consumer industry).
Each of the businesses is underpinned by a subscription model
providing durable revenue streams with opportunities to cross and
upsell. In the year ended 31 December 2017, the Research Views
Group generated pro forma revenues of approximately GBP27.0 million
and EBITDA of GBP2.1 million. As at 31 December 2017, the pro forma
gross assets of the Research Views Group was GBP47.8 million. Pro
forma revenues for the Research Views Group grew by 18.8% in the
year ended 31 December 2017.
Whilst the products of each business deliver industry specific
data and analytics, each business provides its corporate
client-base with the following common features:
a) Analysis of market dynamics - analysis of the sizes and
trends in the markets covered;
b) Information on revenue opportunities - information on
specific revenue opportunities, either as a size of a segment or
product, or via analysis of specific contracts or events;
c) Information on and analysis of key stakeholders - analysis of
competitors, suppliers and other key stakeholders;
d) Commentary on key issues - fact-based analysis of key issues
of interest in the respective sectors, for example, change in
technology or regulation; and
e) M&A and deal analysis - the RVL Group and the Timetric
Group also cover deal activity.
The Acquisition is commercially aligned to the Group's primarily
subscription based model and is operationally complementary
especially in the context of the Group's existing analyst and
client service operations. Following the Acquisition, the Group
addresses at least eight major global industries with a global team
of experts operating in 23 offices worldwide.
Rationale for the Acquisition
The Independent Directors believe that the Acquisition will
further advance the Group's transformation into a global data and
analytics business with a truly differentiated multi-industry
offering, significantly increasing its addressable markets and
enhancing the Company's long term growth opportunities. The
Acquisition adds the energy industry to the Group, and
significantly bolsters the recently formed construction business,
following the Group's recent acquisition of MEED Media FZ LLC. It
will provide complementary intelligence assets and capabilities
relevant to existing healthcare, consumer and financial services
industries and is consistent with the Group's strategy.
Research Views Group's business will be integrated into the
Group's global platform and infrastructure and will operate under
the GlobalData brand, strengthening and expanding the markets and
geographies the Group serves. With 23 offices located across North
and South America, the United Kingdom, Asia Pacific and the Middle
East, the Independent Directors believe that the Group's global
infrastructure will, when combined with that of the Research Views
Group, provide the opportunity for commercial and operational
synergies. In particular, the Acquisition will consolidate the
Group's expansion of its sales and management infrastructure across
Asia Pacific, providing stronger regional capability and expertise
for the Group to address the increasing growth in the global data
and analytics market.
Following Completion, the Independent Directors anticipate that
the Group's increased subscription revenues will improve visibility
of forward earnings. Furthermore, following Completion and the
subsequent integration, the Independent Directors anticipate being
able to leverage economies of scale from its enlarged operations
and, in particular, in the creation of internally generated
intellectual property which can be sold across multiple geographies
and in multiple formats.
The Independent Directors believe the Acquisition will rapidly
strengthen and expand the Group's industry coverage for its core
corporate clients and enhance the Group's potential to become the
world's leading source of data and analytics for corporates.
Effect of the Proposals on the Group
The expected net effects of the Proposals are to improve both
the quality and visibility of earnings as the Group increases the
subscription mix and focuses on scale industries.
On Completion, the Group will operate in eight key global
business industries: consumer; technology; healthcare;
construction; financial services; professional services; energy;
and communities. This will continue the Group's transformation into
a data and analytics group and is expected to increase its
addressable market.
It is expected that the trend in the Research Views Group's
revenue growth will continue and that annualised synergies of
approximately GBP1.0 million are achievable following
rationalisation of central costs of the Research Views Group.
Completion of this exercise is anticipated before the end of
December 2018, after which it is expected that an adjusted EBITDA
margin of between 20% and 25% will be achievable by the Research
Views Group on an annualised basis before considering any available
revenue synergies.
The Acquisition is expected to be earnings accretive in the
first full year of ownership.
Completion is expected to occur following the General Meeting on
24 April 2018.
Independent financial advice
In order to inform the Independent Committee's commercial
assessment of the merits of the Proposals, the Company engaged a
leading global firm of accountants to provide independent financial
advice to the Independent Directors on the valuation of the
Research Views Group.
Terms of the Acquisition and Lock-in Arrangements
Terms of the Acquisition
Pursuant to the terms of the Acquisition Agreement, the Company
has conditionally agreed to acquire from the Vendors the entire
issued share capital of Research Views.
Under the terms of the Acquisition, 15,957,447 new Ordinary
Shares will be issued to the Vendors (15.6% of the Existing
Ordinary Shares), which equates to GBP90.0 million based on the
volume weighted average price of an Existing Ordinary Share of 564
pence over the 30 days prior to the Announcement. The Company's
share price at the close of business on 23 February 2018, the last
business day before the Announcement, was 547.5 pence.
In addition, the Net Debt will be assumed by the Company on
Completion, which includes the Shareholder Debt. The Company will
procure that the Shareholder Debt is repaid by the Research Views
Group to Michael Danson and his associated companies on Completion
(such repayment to be funded by the Company's existing banking
facilities).
The Acquisition Agreement is conditional upon Resolutions 1 and
2 being duly passed at the General Meeting and Admission. Further
details of the Acquisition Agreement are set out below.
Lock-in Arrangements
On Completion, each of the Vendors will undertake to the Company
and N+1 Singer not to dispose of the Consideration Shares (or any
interest in them) held by each of them following Completion, as
follows:
a) in respect of the first 18 months following Completion, not
to dispose of more than one third of the Consideration Shares
issued to them; and
b) in respect of the subsequent period of 18 months following
Completion, not to dispose of more than two thirds of the
Consideration Shares issued to them (less the number of any
Consideration Shares disposed of by that Vendor under (a)
above),
together, the "Lock-in Arrangements".
The Lock-in Arrangements are subject to certain customary
exceptions, including transfers to family members or to trustees
for their benefit, disposals by way of acceptance of a recommended
takeover offer of the entire issued share capital of the Company or
to satisfy any claim related to the Acquisition or the
Re-organisation.
RBC cees Trustees Limited, acting in their capacity as Trustees
of The GlobalData Employee Benefit Trust, are instructed where
appropriate to acquire Ordinary Shares in the open market to
satisfy the future vesting of share awards under the Group's
employee share schemes. It is therefore possible that RBC cees
Trustees Limited may purchase Consideration Shares in the open
market following Completion as permitted under the Lock-in
Arrangements. Any such purchase would be subject to the
restrictions imposed on RBC cees Trustees Limited acting
independently pursuant to the terms of the GlobalData Employee
Benefit Trust and instructions given thereunder.
Current trading and prospects
The Group is trading in line with the Directors' expectations
and the Directors believe that the prospects of the Enlarged Group
are encouraging. The market outlook for data and analytics remains
positive over the medium to long term, presenting the Group with
real and achievable opportunities for positive growth.
Issued share capital
Application will be made to the London Stock Exchange for the
Consideration Shares to be admitted to trading on AIM. It is
expected that, subject to the approval of the Resolutions,
Admission and dealings in the Consideration Shares will take place
on or before 30 April 2018.
Following Admission, the Company will have 118,113,869 Ordinary
Shares in issue. Michael Danson and Wayne Lloyd (one of the
principal Vendors), together with his family, will be interested in
82,462,226 Ordinary Shares and 7,250918 Ordinary Shares
respectively, representing approximately 69.8% and 6.14% of the
enlarged issued share capital of the Company respectively.
Following Completion, existing Shareholders will suffer a
dilution of approximately 15.6 per cent. to their Existing Ordinary
Share interests in the Company.
The General Meeting
The General Meeting is to be held on 24 April 2018 at the
offices of the Company at John Carpenter House, John Carpenter
Street, London, EC4Y 0AN at 10.15 a.m. (or as soon thereafter as
the Annual General Meeting convened for the same day shall have
concluded), at which Resolutions will be proposed for the purposes
of implementing the Proposals.
Michael Danson has irrevocably undertaken to vote in favour of
the Resolutions to be proposed at the General Meeting in respect of
his beneficial holdings amounting to 69,604,325 Existing Ordinary
Shares, representing approximately 68.1 per cent. of the existing
issued ordinary share capital of the Company.
Recommendation and voting intentions
The Acquisition, constitutes a substantial property transaction
under section 190 of the Act and, consequently, requires the
approval of Shareholders.
In addition, the Acquisition constitutes a related party
transaction for the purposes of Rule 13 of the AIM Rules.
The Independent Directors, having consulted with the Company's
nominated adviser, N+1 Singer, consider the terms of the
Acquisition are fair and reasonable insofar as Shareholders are
concerned and accordingly recommend unanimously Shareholders to
vote in favour of the Resolutions to be proposed at the General
Meeting as they intend to do so in respect of their own beneficial
holdings amounting, in aggregate, to 475,000 Existing Ordinary
Shares, representing approximately 0.46 per cent. of the existing
issued ordinary share capital of the Company.
In providing its advice to the Independent Directors, N+1 Singer
has taken into account the Independent Directors' commercial
assessments of the Proposals.
In addition, Michael Danson has irrevocably undertaken to vote
in favour of the Resolutions to be proposed at the General Meeting
in respect of his beneficial holding amounting to 69,604,325
Existing Ordinary Shares, representing approximately 68.1 per cent.
of the existing issued ordinary share capital of the Company.
Summary of the Principal Terms of the Acquisition and the
Re-organisation
The Acquisition Agreement
Pursuant to the terms of the Acquisition Agreement, the Company
has conditionally agreed to acquire from the Vendors the entire
issued share capital of Research Views in consideration for the
allotment of the Consideration Shares to the Vendors at Completion.
The Acquisition Agreement is conditional upon Resolutions 1 and 2
being duly passed at the General Meeting and Admission. The Company
will assume the Net Debt on Completion, which includes the
Shareholder Debt. The Company will procure that the Shareholder
Debt is repaid by the Research Views Group to Michael Danson and
his associated companies on Completion.
The Acquisition Agreement contains a tax covenant and certain
warranties and indemnities from Michael Danson and Wayne Lloyd to
the Company which are in a customary form for such a
transaction.
The Acquisition Agreement also contains undertakings and
restrictive covenants from the Vendors to the Company which are in
a customary form for such a transaction.
The liability of each Vendor (which is several) under the
Acquisition Agreement shall not exceed the value of the
Consideration Shares received by that Vendor. This liability cap is
subject to certain de minimis thresholds for warranty claims and
certain indemnity claims.
The Reorganisation Agreements
In connection with the Reorganisation, the Vendors and Research
Views have entered into the Reorganisation Agreements pursuant to
which Research Views has acquired all of the Vendors' shares in
Progressive Media Ventures and Progressive Ventures, including the
outstanding minority interests in SociableData Limited (a
subsidiary of Research Views), in exchange for shares in Research
Views.
The Reorganisation Agreements contain a tax covenant, certain
warranties, undertakings, indemnities and restrictive covenants
from the Vendors to Research Views which are in a customary form
for such a transaction.
The liability of each Vendor (which is several) under the
Reorganisation Agreements shall not exceed the value of the shares
in Research Views received by that Vendor pursuant to the
Reorganisation Agreements. This liability cap is subject to certain
de minimis thresholds for warranty claims and certain indemnity
claims.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQLFFLLVFITFIT
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