19th Feb 2021 18:00
(Alliance News) - Daily Mail & General Trust PLC on Friday acknowledged "recent media speculation" about online used car platform Cazoo following a statement from Cazoo regarding a possible initial public offering.
Cazoo's statement reads: "As one of the UK's fastest growing businesses, with revenues of over GBP160 million in our first year alone, it is not surprising that there is speculation around whether or when we might IPO but we do not comment on speculation and should we have an announcement to make on this or any other matter we shall do so at the appropriate time."
DMGT - which holds an approximately 20% stake in Cazoo - says that, as a result of the announcement, there is no certainty at present of "any specific outcome for DMGT shareholders" and a further announcement, if appropriate, will be made.
Earlier on Friday, the company said it has agreed to sell its education technology business Hobsons in two separate transactions for USD410 million total.
Hobsons' Naviance and Intersect businesses will be sold to Folsom, California-based K-12 education technology solutions provider PowerSchool Group LLC for USD320 million and will become part of the PowerSchool platform.
Meanwhile, Hobson's Starfish business is being sold to Washington DC-based education company EAB Global Inc for USD90 million.
Naviance is a K-12 college and career readiness solution, Intersect is a higher education student match-and-fit offering, and Starfish is a higher education student retention and success platform.
In DMGT's financial year ended September 30, Hobson generated adjusted operating profit of GBP6 million from revenue of GBP85 million.
The company noted the disposals will increase the focus of its portfolio, resulting in it operating in 4 sectors, compared to 10 in 2016. With education technology removed, these are consumer media, insurance risk, property information, and events & exhibitions.
It added the new cash will be used to strengthen its cash position and enhance its financial flexibility.
"These two transactions mark another major milestone in DMGT's transformation and are a clear demonstration of the benefits of our strategy. Hobsons was restructured in 2017 to focus on high-growth opportunities in Student Success. The combination of operational execution and organic investment drove a significant increase in capital value," said Chief Executive Paul Zwillenberg.
Shares in DMGT closed up 21% on Friday at 946.00 pence.
By Anna Farley; [email protected] and Ife Taiwo; [email protected]
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