Australia-listed creative transformation company WPP AUNZ has agreed to sell 100 per cent interest in its Kantar businesses in Australia and New Zealand in a deal that values the businesses at A$168 million ($114 million).
The sale of Kantar’s businesses in Australia and New Zealand is part of UK-based media conglomerate WPP’s decision to sell 60 per cent of Kantar’s global business to private equity firm Bain Capital at a valuation of $4 billion.
Kantar is WPP’s global data, research, consulting, and analytics business. WPP plc, will continue to own 40 per cent of the global Kantar business after the transaction.
“A committee of independent WPP AUNZ board directors has determined that to participate in the global transaction is an attractive strategic and financial outcome for the company and our shareholders,” WPP AUNZ chairman Robert Mactier said in a disclosure to the Australian Securities Exchange.
Proceeds to WPP AUNZ after completion adjustments including transaction costs, and a share of restructure liabilities are expected to be A$150 million ($102 million). The consideration is payable in cash, the ASX-listed company said.
The sale will reduce debt and allow WPP AUNZ to return funds to shareholders through dividends or capital management.
The firm said its board will review the optimal use of proceeds ahead of the expected receipt in early 2020, taking into consideration prevailing gearing levels, potential expansion, capital needs, and cash flow outlook.
“The sale proceeds will enable greater investment in the existing portfolio of companies to accelerate their growth potential and invest in new offerings and technologies that better serve customer needs,” John Steedman, Interim CEO of WPP AUNZ.
Completion of the transaction is subject to approval by non-WPP plc associated shareholders and is conditional on the completion of the WPP plc global Kantar transaction.
Last July, WPP plc announced that it has entered into an agreement to sell 60 per cent of Kanta to Bain Capital, valuing the whole of Kantar at an enterprise value of $4 billion.
It was in October 2018 when WPP highlighted the significant opportunity to develop Kantar into the world’s leading data, insights and consulting company.
The WPP Board considered that the best way to unlock Kantar’s potential and maximise shareholder value was with a strategic or financial partner, WPP said.
“Kantar is a great business and we look forward to working with BainCapitalto unlock its full potential,” WPP CEO Mark Read said.