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Ascential to acquire MediaLink

07 February 2017 13:12

Ascential has agreed to acquire 100% of US-based media advisory and business services provider MediaLink for an initial cash consideration of $69m plus future earnouts.

MediaLink provides advisory and business services to media platforms and brands seeking to drive growth through better marketing. It serves the consumer goods and services segment, which Ascential already addresses through leading products such as WGSN, Cannes Lions and Money20/20. It has worked with Cannes Lions' customers since 2011 where it hosts content and client-oriented meetings and events as part of the official fringe. The company, which operates from four offices in the U.S. was founded in 2003 by Michael Kassan, who will continue to run the business.

The Company said MediaLink will further strengthen and accelerate its strategy to own market-leading brands in selected complementary marketplaces and offer trusted information and valuable connections to businesses.

Ascential highlighted that MediaLink is growing rapidly and delivered unaudited revenue of $54m and adjusted PBT of $14m in 2016, with year-on-year growth of 29% and 24% respectively, and had gross assets of $11m at December 2016.

The initial consideration will be funded from Ascential's cash reserves and existing borrowing facilities. The future earnouts are payable over the period to February 2021 based on the adjusted EBITDA of the business for the three years 2017 to 2019 and are expected to total between $42m and $62m. The earnouts are payable in cash or, for certain elements, shares at Ascential's option and a portion of the earn-out payments is subject to founders remaining in employment with the company. The total aggregate consideration, including initial consideration and earn out payments, is capped at $207m in the event that stretching profit targets are reached. The acquisition is expected to be enhancing to earnings per share in the first full year of ownership.

The transaction is expected to complete, subject to customary US regulatory clearance, within the next month and, upon completion MediaLink will form part of Ascential's Information Services division.

Duncan Painter, Chief Executive Officer of Ascential plc, said:

"MediaLink is a leader in its industry, with a strong and very visible brand presence in the US. MediaLink is an excellent fit with our existing Ascential offering and I am confident we can help accelerate MediaLink's business into new markets by using our assets and infrastructure over the coming months and years. I see synergies between MediaLink and our portfolio of products to significantly help accelerate our existing businesses and create additional value for shareholders."

Michael Kassan, Chairman and CEO of MediaLink, commented:

"This is a transformational moment for MediaLink. Propelled by the global footprint of Ascential and the combined resources and talent of our organisations, we are going to write the most remarkable chapter in MediaLink history. We look forward to working closely with Ascential to create growth and new opportunities."

At 1:12pm: (LON:ASCL) Ascential Plc share price was +3.55p at 293.45p

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