WPP finalises Kantar sales to strengthen balance sheet

Sale of brand consulting and analytics firm completed with Bain Capital earlier than expected

WPP has completed 90 per cent of the transaction to sell 60 per cent of Kantar, its global data, research, consulting and analytics business, to Bain Capital Private Equity, in a deal worth around £2.4 billion. 

Following final completion of the last 10 per cent of the deal in the first half of 2020, WPP said 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 £2.4 billion (AUD$4.6 billion). 

The Kantar transaction was originally announced on 12 July 2019. WPP intends to retain approximately 60 per cent of the net proceeds (approximately £1.4 billion) to reduce debt to the low end of the target leverage range of 1.5 – 1.75x average net debt/EBITDA 2 for 2020, and to return 40 per cent of the net proceeds (approximately £950 million) to shareholders. 

WPP announced the return to shareholders will be executed via a share repurchase program, which will commence shortly, with an initial tranche of approximately £250 million planned to be completed by March 2020. 

“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,” WPP CEO, Mark Read, said. 

“It is a major step in simplifying and focusing WPP, and we intend to return about 8 per cent of our share capital to shareholders through a buyback program. The partnership with Bain Capital means we will participate in the future growth of Kantar, as well as allowing our clients to continue to benefit from Kantar’s services.”

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