UBM plc announces the sale of PR Newswire to Cision

15 December 2015: for immediate release UBM plc announces the sale of PR Newswire to Cision for $841m and proposes to return £245m to shareholders London, 15 December 2015: UBM plc, one of the world's leading B2B eventsorganisers, today announces that it has reached agreement for the sale of PRNewswire to Cision, a business controlled by GTCR Canyon Holdings (Cayman),L.P., for $841m, comprising $810m in cash and $31m of preferred equity (on afair value basis). The transaction is a significant step for UBM in executing its "Events First"strategy as it increases the Company's focus on the attractive, high growthglobal events sector. Following completion of the transaction, £245m is proposed to be returned toshareholders by way of a special dividend, with the remainder retained toprovide greater financial capacity to drive the strategy through bolt-onacquisitions. Transaction * The total sale price of $841m represents excellent value for UBM's shareholders, being a c.11.2 times multiple of PR Newswire's 2014 adjusted earnings before interest, tax, depreciation and amortisation, while the cash value of $810m represents a c.10.8 times multiple * Net cash proceeds received on completion are expected to be approximately £ 498m after adjustments for transaction expenses, debt-like items, tax and a contribution of £10m to UBM's pension scheme * The agreement is subject to anti-trust clearance in the US. Completion is expected late in Q1 2016 * The transaction requires shareholder approval and a circular is expected to be posted to UBM shareholders shortly Use of proceeds * Shortly after completion, UBM proposes to return £245m to shareholders by way of a special dividend which would be accompanied, subject to shareholder approval, by a share consolidation * The retained net cash proceeds received on completion, of approximately £ 253m, provides UBM with greater financial capacity to drive its "Events First" strategy through bolt-on acquisitions. UBM sees a good pipeline of opportunities Impact on the Continuing Group * The transaction will be dilutive to EPS initially. However this dilution will be partially mitigated by the proposed share consolidation accompanying the special dividend. Further, as the retained proceeds are reinvested in line with UBM's strict financial returns criteria the dilution will be progressively reduced * UBM's existing progressive dividend policy targets 2 times cover through economic and biennial cycles. Following the disposal of PR Newswire, the Company intends to maintain this dividend policy on a dividend per share basis (following the special dividend and share consolidation) and to continue to focus on growing dividend cover towards its stated target * UBM will maintain its published financial policy, with a target leverage range of 1.5x-2.0x net debt/EBITDA, retaining the flexibility to stretch for good reason on a 12-18 month horizon and a minimum leverage target of 1.0x * Following the transaction, UBM expects to maintain its investment grade status with the credit rating agencies * PR Newswire will be treated as Held for Sale when UBM reports its full year results for 2015 on 25 February 2016 * The preferred equity will be held on the balance sheet at fair value ($31m). The par value of $40m attracts an 8% PIK coupon and is expected to become payable on a realisation event at GTCR Canyon Holdings (Cayman), L.P. * Following the disposal of PR Newswire, the tax rate on adjusted Profit Before Tax for the Continuing Group is expected to be approximately 16% On 10 November 2015, the Group released a trading update for the currentfinancial year up to that date. There has been no change in UBM's assessment oftrading since that time. Tim Cobbold, Chief Executive of UBM plc, said: * "Today's announcement represents a significant step in the execution of UBM's "Events First" strategy, the objective of which is to become the world's leading focused B2B Events business. The Board is confident that this transaction realises excellent value for our shareholders. * Following the successful acquisition of Advanstar in 2014, the disposal of PR Newswire further increases our focus on the attractive, high growth and high margin events sector with more than 80% of UBM's continuing revenues generated in Events. * In addition, the retained sales proceeds will increase our capacity to invest in bolt-on acquisitions to strengthen the portfolio and grow the business faster, whilst maintaining appropriate financial discipline." Investors and Analysts A conference call will be held at 8.30am GMT. Slides and audio will beavailable through https://www.webcaster4.com/Webcast/Page/7/12303 Alternatively if you are likely to want to ask questions please dial-in intothe call: UK Toll-free 0800 0323836 US/Canada Toll-free (888) 203-7940 International dial-in (916) 582-3354 Conference ID: 99561585 Slides will separately be available on the UBM plc website. Contacts UBM plc Kate Postans Head of [email protected] +44 207 921 5023Investor Relations and CorporateCommunications Brunswick Jon Coles, [email protected] +44 207 404 5959 Andy Rivett-Carnac, Craig Breheny Evercore and J.P. Morgan Cazenove acted as financial advisers to UBM on thistransaction and are acting as joint sponsors in relation to the relatedshareholder approval process. 1. Information on PR Newswire, GTCR and Cision Founded in 1954, PR Newswire is a global leader in press release distributionand related communications, products and services. PR Newswire's customers areprimarily professionals working in marketing, public relations, corporatecommunications and investor relations roles at firms spanning Fortune 2000multinationals, small businesses, public relations companies and governmentagencies worldwide. As at 30 June 2015, PR Newswire had gross assets of £424.6mand, for the year ended 31 December 2014, generated an adjusted operatingprofit of £44.8m. GTCR is a Chicago based private equity firm with existing strategic investmentsin the broader global corporate communications marketplace. Cision, a businessowned by GTCR Canyon Holdings (Cayman), L.P., is a leading global mediaintelligence company serving the complete workflow of today's PR andcommunication professionals. Cision also comprises the Gorkana Group, PRWeb,Help a Reporter Out (HARO) and iContact brands. Headquartered in Chicago,Cision has over 100,000 customers worldwide and maintains offices in Canada,U.K., France, Germany, Portugal, Sweden, Finland and China. 2. Further terms of the transaction The aggregate consideration (on a debt and cash free basis) will be $841m. Thesum is subject to customary adjustments relating to the amount of workingcapital at completion. On completion, UBM will receive a par value amount of $40m of preferred equityin Buyer Parent, the holding company for Cision, which will carry a PIK couponof 8% per annum, compounded quarterly. This par value amount plus accruedinterest on the preferred equity is expected to become payable on Buyer Parentcompleting a realisation event. On completion of the disposal of PR Newswire,accounting treatment requires the preferred equity to be held on the UBMbalance sheet at fair value ($31m). The preferred equity is transferablesubject to certain restrictions. UBM's current intention is to retain thesesecurities. If there is an IPO of Buyer Parent, the preferred equity units willconvert into common stock of the continuing corporation. Completion of the transaction is subject to, inter alia, receipt of clearancefrom the US antitrust authorities or expiration of the applicable waitingperiod. Completion of the sale of the entity conducting the PR Newswirebusiness in China (approximately $4m of consideration) is conditional uponreceipts of certain regulatory approvals in China, but such approvals will notdelay completion in respect of the remainder of PR Newswire. UBM and the Buyer have entered into certain termination fee arrangements inrelation to the transaction. In the event that the Disposal Agreement isterminated under certain circumstances, the Buyer is required to pay to UBM afee of $42.5m, representing 5% of the $850m overall principal consideration.Certain funds controlled by GTCR have provided a guarantee of the payment ofthis fee by the Buyer. In the event that the Disposal Agreement is terminated because UBM'sshareholders do not approve the transaction, UBM will be required to pay to theBuyer a termination fee of $31.65m, representing 1% of UBM's marketcapitalisation (based on the closing share price on 14 December 2015). Further information relating to the transaction will be provided in thecircular to be posted to UBM shareholders. 3. Other Information The Board has decided that £10m of the proceeds will be used to accelerate thereduction of UBM's gross pension fund deficit, which at 30 June 2015 was £42.9m. In accordance with the UK Listing Rules, due to the size of the transactionrelative to the size of UBM, the sale of PR Newswire is subject to approval bya majority of shareholder votes cast at the general meeting, which is expectedto take place in January 2016. Shareholders will also be asked to approve asub-division and consolidation of the share capital of the Company which willoccur following the payment of the special dividend. This share consolidationis intended, as far as possible, to maintain comparability of the Company'sshare price before and after the payment of the special dividend. The shareconsolidation will require approval by at least two thirds of the votes cast atthe general meeting. There are not expected to be any changes to the UBM plc Board as a result ofthe disposal. There are no senior management or employees in PR Newswire thatare key to the operation of UBM's remaining businesses. For the purposes of this announcement numbers have been translated from USdollars into Sterling at the rate of $1.5120 per pound being the rate at 12:00noon on 14 December 2015. 4. Definitions Buyer PWW Acquisition LLC, a wholly-owned subsidiary of Buyer Parent Buyer Parent GTCR Canyon Holdings (Cayman), L.P. an investment vehicle controlled by GTCR Canyon Partners, Ltd. and which controls the Cision business Disposal Agreement the purchase and sale agreement dated 14 December 2015 entered into between the Company and Buyer setting out the terms and conditions of the sale of PR Newswire PR Newswire The subsidiaries of the Company carrying on the PR Newswire business and the operations of the PR Newswire business conducted in India by UBM India Pvt Ltd 5. Important notice This announcement has been issued by, and is the sole responsibility of, UBMplc ("UBM"). No representation or warranty, express or implied, is or will bemade by, or in relation to, and no responsibility or liability is or will beaccepted by any advisor to UBM or by any of their affiliates or agents as to orin relation to the accuracy or completeness of this announcement or any otherwritten or oral information made available to or publicly available to anyinterested party or its advisers, and any responsibility or liability thereforeis expressly disclaimed. Evercore Partners International LLP ("Evercore"), which is authorised andregulated in the United Kingdom by the FCA, is acting exclusively for UBM asjoint financial adviser and joint sponsor and for no one else in connectionwith the transaction, the content of this announcement and other mattersdescribed in this announcement and will not be responsible to anyone other thanUBM for providing the protections afforded to clients of Evercore, nor forproviding advice to any other person in relation to the transaction, thecontent of this announcement or any other matters described in thisannouncement. J.P. Morgan Limited (which conducts its UK investment banking business as J.P.Morgan Cazenove) ("J.P. Morgan Cazenove"), which is authorised and regulated inthe United Kingdom by the FCA, is acting exclusively for UBM as joint financialadviser, joint sponsor and joint corporate broker and for no one else inconnection with the transaction, the content of this announcement and othermatters described in this announcement and will not be responsible to anyoneother than UBM for providing the protections afforded to clients of J.P. MorganCazenove, nor for providing advice to any other person in relation to thetransaction, the content of this announcement or any other matters described inthis announcement. Save for the responsibilities and liabilities, if any, of Evercore or J.P.Morgan Cazenove under the Financial Services and Markets Act 2000, as amended,or the regulatory regime established thereunder, Evercore and J.P. MorganCazenove assume no responsibility whatsoever and make no representations orwarranties, express or implied, in relation to the contents of thisannouncement, including its accuracy, completeness or verification or for anyother statement made or purported to be made by UBM, or on UBM's behalf, or byEvercore or J.P. Morgan Cazenove or on Evercore's or J.P. Morgan Cazenove'sbehalf and nothing contained in this announcement is, or shall be, relied on asa promise or representation in this respect, whether as to the past or thefuture, in connection with UBM or the transaction. Each of Evercore and J.P.Morgan Cazenove disclaims to the fullest extent permitted by law all and anyresponsibility and liability whether arising in tort, contract or otherwisewhich it might otherwise be found to have in respect of this announcement orany such statement. The contents of this announcement do not constitute or form part of an offer ofor invitation to sell or issue or any solicitation of any offer to purchase orsubscribe for any securities for sale in any jurisdiction nor shall they (orany part of them) or the fact of their distribution form the basis of, or berelied upon in connection with, or act as an inducement to enter into, anycontract or commitment to do so. A copy of the Circular will be available on UBM's website at www.ubm.com.Neither the content of UBM's website nor any website accessible by hyperlinkson UBM's website is incorporated in, or forms part of, this announcement. TheCircular will give further details of the transaction. Forward looking statements This announcement may include certain forward-looking statements, beliefs oropinions, including statements with respect to UBM's business, financialcondition and results of operations. These forward-looking statements can beidentified by the use of forward-looking terminology, including the terms"believes", "estimates", "plans", "anticipates", "targets", "aims","continues", "expects", "intends", "hopes", "may", "will", "would", "could" or"should" or, in each case, their negative or other various or comparableterminology. These statements are made by the UBM directors in good faith basedon the information available to them at the date of this announcement andreflect the UBM directors' beliefs and expectations. By their nature thesestatements involve risk and uncertainty because they relate to events anddepend on circumstances that may or may not occur in the future. A number offactors could cause actual results and developments to differ materially fromthose expressed or implied by the forward-looking statements. No representation or warranty is made that any of these statements or forecastswill come to pass or that any forecast results will be achieved.Forward-looking statements speak only as at the date of this announcement andUBM and its advisers expressly disclaim any obligations or undertaking torelease any update of, or revisions to, any forward-looking statements in thisannouncement. No statement in the announcement is intended to be, or intendedto be construed as, a profit forecast or profit estimate and no statement inthe announcement should be interpreted to mean that earnings per UBM share forthe current or future financial years will necessarily match or exceed thehistorical earnings per UBM share. As a result, you are cautioned not to placeany undue reliance on such forward-looking statements. Rounding Certain figures included in this announcement have been subjected to roundingadjustments. END