REG - Ascential PLC - Update on investment in Hudson MX

AscentialAnnouncement

30/10/2023 07:15

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RNS Number : 6870R  Ascential PLC  30 October 2023

 

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

30 October 2023

 

Ascential plc

 

Update on investment in Hudson MX

Sale process initiated by Hudson MX Board

 

Ascential plc (LSE: ASCL.L) today announces that the Board of Hudson MX
("Hudson") has initiated a sale of the Hudson business, a US provider of SaaS
media buying and media accounting solutions in which Ascential is a 36.5%
shareholder. Ascential has also separately announced today the proposed sale
of its Digital Commerce business to Omnicom Group Inc., a leading global
marketing and corporate communications company. Omnicom Group Inc. has
confirmed its participation in the sale process for Hudson.

 

As previously announced, in February 2023 Hudson completed a new financing
round led by MT II Holdings, LP ("MTII"). As part of this transaction,
Ascential entered arrangements that provided it with a path to a majority
stake in Hudson in the future, including a put option granted to MTII that if
exercised in full would result in Ascential's holding in Hudson increasing to
79%(1).

 

Ascential has now entered new arrangements with MTII in order to ensure that
MTII will receive at least the same consideration for its stake in Hudson when
the business is sold as it would have done if: (i) the existing put option and
the call option with MTII had been exercised in April 2024; and (ii) Hudson's
debt obligations to MTII on such exercise had been honoured. On agreement of
these new arrangements, MTII and Ascential have agreed to the initiation of
the sale process for Hudson.

 

The value of the consideration due to MTII if the existing put option and the
call option are exercised is approximately $80 million (£66 million)(2),
being the combined purchase price for the equity and debt instruments held by
MTII. Ascential will fund any shortfall between this amount and proceeds
received by MTII on the sale of Hudson. In the event that the sale process for
Hudson does not complete by April 2024, MTII's and Ascential's existing put
and call options will be automatically exercised and the full amount would be
payable to MTII by Ascential. Accordingly, Ascential will retain approximately
$80 million (£66 million)(2) of proceeds from the proposed sale of Digital
Commerce and WGSN on its balance sheet pending the conclusion of the sale
process for Hudson, which is targeted to complete in H1 2024.

 

As of June 2023, Ascential has a common equity investment of £10.3 million
in Hudson, alongside preference stock instruments totalling £87.7 million.
For the financial year ended 31 December 2022, Hudson recorded a loss before
tax of US$32.7 million (£27.1 million). Hudson had gross assets of
US$119.2 million (£93.9 million) as of 30 June 2023.

 

 

1 Such arrangements also included: (i) a put option for Hudson management and
Hudson investors, exercisable during February 2026, February 2027, February
2028 and December 2028, which if exercised in full would result in Ascential
holding a 49% equity interest in Hudson; and (ii) certain call option
arrangements for Ascential, entirely at its discretion, to acquire further
shares in Hudson in future from the Investor (representing 8.5% of Hudson's
ordinary shares), from Hudson management, and other existing investors.

2 Based on a GBP to USD exchange rate of 1.21445 as at close of business on 27
October 2023

 

 

 Enquiries:
 Ascential plc
 Duncan Painter, Chief Executive Officer   +44 (0)20 7516 5000
 Mandy Gradden, Chief Financial Officer
 Rory Elliot, Investor Relations Director

 FTI Consulting LLP,
 Media enquiries
 Matt Dixon                                +44 (0)20 3727 1000
 Jamie Ricketts
 Edward Bridges

 

 

About Ascential

Ascential delivers specialist information, analytics, events, and eCommerce
optimisation to the world's leading consumer brands and their ecosystems. Our
world-class businesses improve performance and solve customer problems by
delivering immediately actionable information combined with visionary
longer-term thinking across Digital Commerce, Product Design, Marketing and
Retail & Financial Services.

 

With more than 3,500 employees across six continents, we combine local
expertise with a global footprint for clients in over 120 countries. Ascential
is listed on the London Stock Exchange.

 

Information on Hudson

 

Hudson, founded in 2016, is an advertising software business providing media
buying and media accounting solutions through a cloud-based SaaS platform. Its
platform, the MX Platform, is designed to power the purchasing and management
of omnichannel media. The company is dual headquartered in New York and
Atlanta and has a team of c.150 full-time employees.

 

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