TIDMNWOR

RNS Number : 3276K

National World PLC

31 December 2020

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, THE UNITED STATES OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

National World plc

("National World," or the "Company")

Acquisition of JPI Publishing Limited and its Subsidiaries ("JPI Group") and

Directorate Change

National World, (LSE:NWOR) is pleased to announce that it has acquired JPI Media Publishing Limited ("JPI") and its subsidiaries ("JPI Group") from JPI Media Limited for GBP10.2 million with completion on 2 January 2021.

Highlights

-- The JPI Group is the third largest local news publisher in the UK and its iconic titles and websites include: The Scotsman, The Yorkshire Post, Belfast News Letter, Sheffield Star, Edinburgh Evening News, Portsmouth News and Lancashire Evening Post.

-- In the year ending 2 January 2021 the JPI Group is estimated to have revenue of GBP85.0 million and EBITDA (before exceptional costs) of GBP6.0 million.

-- The JPI Group will provide a platform for National World to implement its strategy of creating a sustainable local online news publishing model. In the year to 2 January 2021 the JPI Group is estimated to have digital revenue of GBP17.0 million.

-- Acquisition of JPI for GBP10.2 million with GBP5.2 million satisfied in cash on completion and two deferred payments of GBP2.5 million each on 31 March 2022 and 31 March 2023.

-- The Company will provide GBP6.5 million working capital facilities to JPI Group post completion.

-- National World has funded the acquisition from its own cash resources and by the issue of GBP8.425 million of loan notes. National World is seeking to issue further loan notes during January 2021 and has also entered a committed obligation with one of its shareholders to issue a further GBP2.0 million of loan notes during January 2021.

-- The loan notes pay interest at 10% and are convertible into shares in National World, subject to certain conditions.

-- Trading in the shares of National World will remain suspended until such time as the Company has published a prospectus relating to the JPI Group (approved by the FCA) and the shares are re-admitted to trading on the Standard List of the London Stock Exchange.

-- On 1 January 2021, Mark Hollinshead will be appointed Chief Commercial Officer and Daniel Cammiade will be appointed as a non-executive director.

Commenting on the acquisition, National World's Chairman, David Montgomery, said:

"JPI 's historic publishing brands represent the best in journalism and have reliably served their communities and supported local businesses, in some cases for centuries, and never more than in the last year. National World will uphold this tradition and implement modern technology to grow the business across a wider footprint based on high quality, unique content.

"I am pleased with the appointment of Mark as Chief Commercial Officer and welcome Daniel to the Board. We have a very experienced Board with extensive knowledge in digital and print publishing to deliver our transformational strategy for growth."

For further information please contact:

 
 National World plc c/o Montfort Communications 
  David Montgomery                                 +44 (0)77 3970 
  Vijay Vaghela                                     1634 
 Dowgate Capital Limited - Financial Advisers 
  and Brokers                                      +44 (0)20 3903 
  James Serjeant                                    7715 
 Alvarium MB (UK) Limited - Financial Advisers     +44(0)20 7195 
  Zeph Sequeira                                     1400 
 Stanhope Capital LLP - Financial Advisers 
  Nigel Spray 
  Rakesh Sharma                                    +44 (0)20 7725 
  Emmanuel Daïen                               1800 
 
 Montfort Communications - Financial PR &            +44 (0)77 3970 
  IR                                                 1634 
  Nick Miles                                         +44 (0)78 1234 
  Olly Scott                                         5205 
 

Further information on National World and JPI Group

Introduction

The Company listed on the standard section of the London Stock Exchange in September 2019 to create a modern platform for news publishing by implementing a new operating model using the latest technology. Its strategy involves consolidation and change by combining digital innovation and traditional print assets to grow revenue by aggregation of audiences and reduce costs via shared services.

On 2 December 2019 the Company announced that it was contemplating several acquisitions and had approached JPI Media Limited following speculation about the sale process for its regional titles. Since that date there have also been discussions involving several potential acquisitions, some of which are ongoing.

On 2 January 2021 the Company will complete the acquisition JPI Media Publishing Limited ("JPI") and its subsidiaries ("JPI Group") from JPI Media Limited.

JPI Group

The JPI Group is the third largest publisher of regional newspapers and websites in the UK with over 100 newspapers including 13 daily newspapers. Iconic brands and websites include: The Scotsman, The Yorkshire Post, Belfast News Letter, Sheffield Star, Edinburgh Evening News, Portsmouth News and Lancashire Evening Post.

In the year ending 2 January 2021 the JPI Group will have estimated revenues of GBP85 million and EBITDA (before exceptional costs) of GBP6 million. Estimated digital revenue for the period to 2 January 2021 is GBP17 million.

The business will be acquired with no debt and has no historic defined benefit pension obligations.

Reasons for the acquisition of the JPI Group

JPI Group provides a portfolio of iconic brands spanning across the UK, which provides a strong base from which to implement the National World strategy of creating a modern platform for news publishing with a new operational model supporting local sites across the entire UK.

Financing for the acquisition of JPI

National World is acquiring JPI for a total consideration of GBP10.2 million. The consideration is to be satisfied by GBP5.2 million in cash at completion and two deferred payments of GBP2.5 million each on the 31 March 2022 and 31 March 2023.

The Company will provide GBP6.5 million working capital facilities to JPI Group post completion.

National World has funded the acquisition from its own cash resources and by the issue of GBP8.425 million of loan notes. National World is seeking to issue further loan notes during January 2021 and has also entered a committed obligation with one of its shareholders to issue a further GBP2 million of loan notes during January 2021

The loan notes:

   -     pay interest at 10% per annum payable twice annually on 30 June and 31 December; 

- are redeemable on 31 December 2023 or on 31 December 2021 and 31 December 2022 at the option of the Company;

- are convertible into ordinary shares of the Company at a conversion price of 11p per ordinary share when trading in the ordinary shares on the London Stock Exchange resumes; and

- on conversion the loan note holders are entitled to receive a bonus payment equal to 10% of the amount of loan notes subscribed for, payable in ordinary shares in the Company at 11p per ordinary share.

Conversion of the loan notes are conditional, inter alia, upon:

   -     approval of the shareholders of National World at a general meeting; and 

- admission of the ordinary shares to trading on the Official List of the London Stock Exchange.

As conversion of the loan notes may result in one or more of the loan note holders owning more than 30% of the issued share capital of the Company the right to convert the loan notes is subject to the publication of a circular to the shareholders of National World (approved by the Takeover Panel) and the approval of the shareholders of National World at a general meeting.

The GBP8.425 million of loan notes issued in December 2020 were subscribed for by shareholders of National World. The Company intends to make further issues of loan notes (on the same terms) to provide further capital for its strategy in advance of re-admission of the ordinary shares to trading on the Official List of the London Stock Exchange and may also consider a further issue of ordinary shares at that time.

The loan notes have been subscribed for by:

- the directors of the Company: David Montgomery GBP100,000; Vijay Vaghela GBP100,000; Mark Hollinshead GBP25,000; John Rowe GBP100,000 and Steve Barber GBP100,000;

- Mediaforce (Holdings) Limited ("Mediaforce") a company controlled by Malcolm Denmark, GBP6 million. As part of the agreement to subscribe for loan notes the Company has agreed that Mediaforce may appoint two directors to the board of National World if they have a shareholding of more than 20%; and

- Alasdair Locke GBP2 million. Alasdair Locke owns 5,000,000 ordinary shares in the Company (9.26% of the issued share capital). Alasdair Locke has also agreed to subscribe for a further GBP2 million of loan notes during January 2021 should further funding be required.

Changes to the Board of Directors

Following the acquisition of JPI, Mark Hollinshead, who is currently a non-executive director will become Chief Commercial Officer and Daniel Cammiade will be appointed to the Board as a non-executive director.

Daniel Cammiade is the chief executive of Tindle Newspapers Limited. National World confirms that there is no further information to be disclosed under the requirements of Listing Rule 9.6.13 in relation to the appointment of Daniel Cammiade.

Trading in the ordinary shares

Trading in the ordinary shares has been suspended since 2 December 2019. For trading to resume the Company will be required to publish a prospectus, prepared in accordance with the Prospectus Regulation Rules, and setting out information on the JPI Group, the loan notes and any further issue of ordinary shares.

Following publication of the prospectus application will be made for the ordinary shares to be admitted to the standard segment of the Official List and admitted to trading on the Main Market of the London Stock Exchange. Applications will also be made in respect of any future issue of shares in the Company's share capital (including or pursuant to options or otherwise) to be admitted to trading on standard segment of the Official List and to trading on the London Stock Exchange's Main Market.

The Company anticipates that it will publish a prospectus and that trading in the shares will resume in early April 2021. The Prospectus will be available at the Company's website (https://www.nationalworld.com) as soon as practicable following its publication.

General Meeting

The Company intends to convene a general meeting prior to the publication of a prospectus to pass resolutions to approve:

   -     the issue of ordinary shares to the loan note holders on conversion of the loan notes; and 
   -     the issue of further ordinary shares to fund the Company's strategy. 

Issued Shares and Total Voting Rights

As at 6.00pm on 30 December 2020 (being the latest practicable date prior to the publication of this announcement) the Company's issued share capital comprised 54,000,000 ordinary shares of GBP0.10 each. Each Ordinary Share carries the right to one vote at a general meeting of the Company and, therefore, the number of voting rights in the Company as at 6.00pm on 30 December 2020 is 54,000,000.

Expected Timetable for issue of Prospectus

February 2021

   --      Publication of a shareholder circular and notice of general meeting 

March 2021

   --      General meeting of the Company 
   --      Publication of the prospectus 

April 2021

   --      Re-admission of the ordinary shares to trading. 

This announcement contains inside information for the purposes of the Market Abuse Regulation (EU) NO. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain. The person responsible for arranging for the release of this announcement on behalf of National World is Vijay Vaghela, Chief Operating Officer.

- Ends -

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December 31, 2020 08:00 ET (13:00 GMT)