WPP To Sell 60% Of Kantar To Bain Capital
Investment by Bain Capital Private Equity values Kantar at c.$4.0bn; WPP leverage target to be met a year ahead of plan; c.£1.0bn shareholder return planned
Transaction highlights
Bain Capital Private Equity’s (“Bain Capital”) acquisition of 60% of Kantar creates a strong partnership with WPP to accelerate the development of Kantar
Further simplifies and repositions WPP for growth, whilst unlocking significant value for shareholders
Kantar valued at c.$4.0bn (c.£3.2bn1) in the proposed transaction, equivalent to a multiple of 8.2x 2018 Kantar headline EBITDA2
Proceeds to WPP on completion after tax and continuing investment in Kantar expected to be c.$3.1bn (c.£2.5bn)
Potential value upside for WPP shareholders from 40% equity stake in Kantar
WPP to retain c.60% of net proceeds to reduce debt to the low end of the target leverage range of 1.5 – 1.75x average net debt/EBITDA3 for 2020
Balance of proceeds, c.$1.2bn (c.£1.0bn), to be returned to shareholders
Impact of proposed transaction and use of proceeds expected to be marginally dilutive to headline EPS in 2021
Completion and associated proceeds relating to no less than 86% of Kantar expected in early 2020, subject to approval by WPP shareholders and other customary regulatory and legal approvals
Mark Read, Chief Executive Officer, WPP, said:
“Kantar is a great business and we look forward to working with Bain Capital to unlock its full potential. As a strategic partner and shareholder in Kantar, WPP will continue to benefit from its future growth while our clients continue to benefit from its services and capabilities. I would like to thank Eric Salama, his team and everyone at Kantar for their tremendous contribution to WPP – a contribution that will continue as we develop the business together.
“This transaction creates value for WPP shareholders and further simplifies our company. With a much stronger balance sheet and a return of approximately 8% of our current market value to shareholders planned, we are making good progress with our transformation.”
Luca Bassi, a Managing Director at Bain Capital Private Equity, said:
“Kantar is a market leader in many areas and we are excited to be partnering with its management team and WPP to build on this remarkable platform for growth. We see many opportunities for expansion and will invest in technology to expand the company’s capabilities and reinforce its global leading position.”
Christophe Jacobs van Merlen, a Managing Director at Bain Capital Private Equity, said:
“We believe that we are well-positioned to support Kantar, alongside WPP, in driving forward the business in a rapidly changing industry. Our deep sector knowledge, operational expertise and strong track record of partnering with management teams to accelerate growth gives us confidence that we can help Kantar grow both organically and by acquisition.”
Eric Salama, CEO, Kantar, said:
“Our new ownership structure presents a great opportunity for Kantar, our employees and our clients. In Bain Capital we have a partner who shares our ambition, brings relevant expertise and – with WPP – can help us accelerate our growth and impact for clients. We are focused on delivering ‘human understanding at scale and speed’ and the ‘best of Kantar’ more consistently. We will do so by investing more in talent and by becoming a more technology-driven solutions provider.”