WPP completes Kantar transaction; share buyback to commence shortly
WPP has announced that it has completed the transaction to sell 60 per cent of Kantar, its global data, research, consulting and analytics business, to Bain Capital Private Equity, with respect to approximately 90 per cent of the Kantar business, and that the proportionate transaction proceeds have been received.
Following final completion in respect of the remaining Kantar business in the first half of 2020, total aggregate net proceeds after transaction costs, tax and WPP’s continuing investment in 40 per cent of the equity of Kantar are expected to be approximately $3.1 billion (approximately £2.4 billion).
The Kantar transaction was originally announced on July 12, 2019 and further details were included in a circular sent to WPP’s shareholders on October 7, 2019. As previously set out, WPP intends to retain approximately 60 per cent of the net proceeds (approximately $1.9 billion or £1.4 billion) to reduce debt to the low end of the target leverage range of 1.5-1.75x average net debt/ EBITDA for 2020, and to return approximately 40 per cent of the net proceeds (approximately $1.2 billion or £950 million) to shareholders.
WPP also announced that the return to shareholders will be executed via a share repurchase programme, which it expects to commence shortly, with an initial tranche of approximately £250 million, of the total £950 million, planned to be completed by March 2020.
Mark Read, CEO, WPP, said, “The completion of the Kantar transaction, earlier than anticipated, achieves the objective we set out in December 2018 to strengthen our balance sheet, and substantially completes our disposal programme. It is a major step in simplifying and focusing WPP, and we intend to return around 8 per cent of our share capital to shareholders through a buyback programme. The partnership with Bain Capital means that we will participate in the future growth of Kantar as well as allowing our clients to continue to benefit from Kantar’s services.”