SALE OF PR NEWSWIRE A SIGNIFICANT STEP IN THE EXECUTION OF UBM S EVENTS FIRST STRATEGY

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Aldous Rose
5 years ago
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1 15 December 2015 SALE OF PR NEWSWIRE A SIGNIFICANT STEP IN THE EXECUTION OF UBM S EVENTS FIRST STRATEGY 0

2 DISCLAIMER 1 This presentation has been issued by, and is the sole responsibility of, UBM plc ("UBM"). No representation or warranty, express or implied, is or will be made by, or in relation to, and no responsibility or liability is or will be accepted by any advisor to UBM or by any of their affiliates or agents as to or in relation to the accuracy or completeness of this presentation or any other written or oral information made available to or publicly available to any interested party or its advisers, and any responsibility or liability therefore is expressly disclaimed. Evercore Partners International LLP ("Evercore"), which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for UBM as joint financial adviser and joint sponsor and for no one else in connection with the transaction, the content of this presentation and other matters described in this presentation and will not be responsible to anyone other than UBM for providing the protections afforded to clients of Evercore, nor for providing advice to any other person in relation to the transaction, the content of this presentation or any other matters described in this presentation. 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 in the United Kingdom by the FCA, is acting exclusively for UBM as joint financial adviser, joint sponsor and joint corporate broker and for no one else in connection with the transaction, the content of this presentation and other matters described in this presentation and will not be responsible to anyone other than UBM for providing the protections afforded to clients of J.P. Morgan Cazenove, nor for providing advice to any other person in relation to the transaction, the content of this presentation or any other matters described in this presentation. 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. Morgan Cazenove assume no responsibility whatsoever and make no representations or warranties, express or implied, in relation to the contents of this presentation, including its accuracy, completeness or verification or for any other statement made or purported to be made by UBM, or on UBM's behalf, or by Evercore or J.P. Morgan Cazenove or on Evercore's or J.P. Morgan Cazenove's behalf and nothing contained in this presentation is, or shall be, relied on as a promise or representation in this respect, whether as to the past or the future, 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 any responsibility and liability whether arising in tort, contract or otherwise which it might otherwise be found to have in respect of this presentation or any such statement. The contents of this presentation do not constitute or form part of an offer of or invitation to sell or issue or any solicitation of any offer to purchase or subscribe for any securities for sale in any jurisdiction nor shall they (or any part of them) or the fact of their distribution form the basis of, or be relied upon in connection with, or act as an inducement to enter into, any contract or commitment to do so. A copy of the Circular will be available on UBM's website at Neither the content of UBM's website nor any website accessible by hyperlinks on UBM's website is incorporated in, or forms part of, this presentation. The Circular will give further details of the transaction. Forward looking statements This presentation may include certain forward-looking statements, beliefs or opinions, including statements with respect to UBM's business, financial condition and results of operations. These forward-looking statements can be identified 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 comparable terminology. These statements are made by the UBM directors in good faith based on the information available to them at the date of this presentation and reflect the UBM directors' beliefs and expectations. By their nature these statements involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. A number of factors could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements. No representation or warranty is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. Forward-looking statements speak only as at the date of this presentation and UBM and its advisers expressly disclaim any obligations or undertaking to release any update of, or revisions to, any forward-looking statements in this presentation. No statement in the presentation is intended to be, or intended to be construed as, a profit forecast or profit estimate and no statement in the presentation should be interpreted to mean that earnings per UBM share for the current or future financial years will necessarily match or exceed the historical earnings per UBM share. As a result, you are cautioned not to place any undue reliance on such forward-looking statements.

3 A SIGNIFICANT STEP IN THE EXECUTION OF EVENTS FIRST Attractive price $841m valuation, 11.2x PR Newswire 2014 adjusted EBITDA Returns to shareholders 245m return to shareholders via a special dividend with share consolidation Increased capacity to accelerate growth via acquisitions Dividend and financial policy unchanged Significantly increases UBM s focus on the attractive, high growth global Events sector 2014 Revenue Pre-PRN disposal Revenue Post-PRN disposal 1 Accelerates "Events First" PRN 21% OMS 16% Events 63% OMS 20% Events 80% Increased focus High quality portfolio of large events OMS alignment Excluding PRN, UBM has higher underlying revenue growth and higher operating margin 2014 Underlying revenue growth 2 (%) 2014 Adjusted operating profit margin pre corporate costs 2 (%) Focused higher growth, higher margin business Events 6.0% 2014 PRN 3.0% 28.0% 26.0% 24.0% Excluding PRN 27.5% 2014 Including PRN 26.3% 2 1 Pro forma for 2014 Advanstar Revenues 2 Calculated from 2014 disclosure ie excluding Advanstar Note: Events exclude OMS; underlying growth rates exclude currency movements, portfolio changes and biennial events; adj. operating profit is before amortisation of intangible assets on acquisitions, exceptional items and share of taxation on profit from joint ventures and associates

4 TRANSACTION SUMMARY 3 Terms Sale of PR Newswire to Cision for $841m c.$810m in cash on completion (c. 536m) $31m preferred equity (Fair Value) 8% Payment-In-Kind on Par Value ($40m) Payable on realisation event at GTCR/Cision c.$752m (c. 498m) net cash proceeds after: $42m of adjustments for transaction expenses, debt-like items and tax 10m contribution to UBM pension scheme Note: FX rate: 1=US$ x 10.0x 8.0x 6.0x 4.0x 2.0x 0.0x Implied 2014 EBITDA multiples 11.2x 10.8x Total Consideration $841m Cash Consideration $810m

5 TRANSACTION SUMMARY Process Disposal subject to majority approval by UBM shareholders Shareholder Circular to be posted shortly General Meeting expected early Jan Transaction provisions Subject to customary conditions Subject to Hart-Scott Rodino anti-trust clearance in the US GTCR Break fee: $43m should certain conditions not be met UBM Break fee: $32m should the transaction not be approved by shareholders Expected late in Q Completion 4

6 USE OF NET PROCEEDS & FINANCIAL POLICY Special dividend & consolidation Proposed return to shareholders of 245m By way of a special dividend Accompanied by share consolidation (subject to shareholder approval) To be effected shortly after completion Dividend policy unchanged DPS maintained (post consolidation) Policy unchanged: progressive, targeting 2x cover through economic and biennial cycles Use of retained proceeds Capacity to drive Events First Attractive pipeline of bolt-on acquisitions Continue to target acquisition ROI in excess of WACC in the first full year of ownership Financial leverage maintained Target leverage range of x net debt/ebitda Capacity to stretch for good reason on a month horizon Minimum leverage target of 1.0x Expect to maintain investment grade 5

7 IMPACT ON CONTINUING GROUP Financial implications PR Newswire will be Held for Sale in 2015 results Retained funds provide flexibility for Nov m Bond initial pay down of RCF 8% PIK interest on preferred equity will sit on the balance sheet as asset at fair value ($31m) Post disposal, tax rate on adjusted PBT expected to be c.16% Immediately dilutive on completion Partial mitigation through return of capital and accompanying share consolidation Further reduction in dilution through reinvestment of proceeds in bolt-on acquisitions 6

8 SUMMARY Attractive price Returns to shareholders Accelerates Events First Focused higher growth, higher margin business 7

9 Q&A 8

ICAP plc ("ICAP") / NEX Group plc ("NEX" or "Newco") Publication of Prospectus, Satisfaction of Conditions and Confirmation of Timeline

ICAP plc (ICAP) / NEX Group plc (NEX or Newco) Publication of Prospectus, Satisfaction of Conditions and Confirmation of Timeline NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO. PLEASE SEE THE