Investment in Healthcare Division by Inflexion
21 December 2023
FOR IMMEDIATE RELEASE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (596/2014/EU) AS THE SAME HAS BEEN RETAINED IN UK LAW AS AMENDED BY THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR").
GlobalData Plc
(AIM: DATA; "GlobalData", "the Company", "the Group")
GlobalData announces a Group reorganisation and enters into a transformational investment agreement with Inflexion for a significant minority stake in its Healthcare division
Highlights
· Launch of new growth plan and Group reorganisation to operate across three customer-focused divisions - Healthcare, Consumer, and Technology.
· Inflexion acquires a 40% shareholding in GlobalData's Healthcare division at a valuation of £1,115m, which represents a 22x multiple of June 2023 LTM EBITDA for the division (on a standalone basis).
· This compares to a market capitalisation of £1,352m for the entire GlobalData Group (at the close of market on 20 December). The Healthcare division represented 36% of GlobalData Group's June 2023 LTM revenue.
· GlobalData Plc expects to receive net cash proceeds of approximately £434m, which will provide flexibility for accelerated value-creating M&A across the Group.
· GlobalData Plc will own the remaining 60% of GlobalData Healthcare, which will continue to be a fully consolidated subsidiary of GlobalData Plc.
· Transaction is expected to close during Q2 2024.
Mike Danson, CEO of GlobalData, said: "This is a significant milestone in GlobalData's evolution, and we are delighted to welcome Inflexion as a shareholder in our Healthcare division. The investment highlights the significant value in our unique data platform and gives us the flexibility to launch a more ambitious approach to growth investment across our portfolio. We believe that we can create substantial value for all shareholders and accelerate GlobalData's profitable growth over the coming years."
David Whileman, Partner and Head of Partnership Capital at Inflexion, said: "GlobalData is renowned for creating data and analytical insight for its clients across many verticals. We are really excited about our partnership with them to carve out and expand an independent Healthcare division. This is a tried and tested strategy we've successfully pursued many times and another example of Inflexion being the leading minority investment partner."
Group Reorganisation and Investment by Inflexion
Background
Fuelled by the Growth Optimisation Plan, GlobalData Group revenues have grown by more than 50% over the last five years, from £178m in 2019 to over £270m expected in 2023. GlobalData now serves more than 4,700 customers with its world class multi-industry platform. The Group has been strategically transformed with significant organic investment across technology and AI, enhanced go-to-market capabilities, as well as an excellent track record of value creating M&A.
One of the most important pillars in the Growth Optimisation Plan is Customer Obsession. The focus has been to 1) develop a trusted, global brand synonymous with delivering exceptional customer value and service; 2) build a global community of engaged industry professionals; and 3) maintain a customer-centric culture that informs the Group's strategy, operating model, and business decisions. The success of GlobalData's Healthcare division highlights the tremendous growth and value opportunity from a focused approach to Customer Obsession. Under the new growth plan, GlobalData will elevate its customer-focused approach throughout the group, driving value-enhancing revenue and margin expansion.
GlobalData will host a capital markets event in Q1 2024 to provide further detail on the new growth strategy.
Investment by Inflexion
Monument Bidco Limited (an investment vehicle wholly owned by funds managed or advised by Inflexion Private Equity Partners LLP ("Inflexion")) has agreed to acquire a 40% minority shareholding in Washington Topco Limited ("Topco"), a new entity established as the holding vehicle for GlobalData's Healthcare division. GlobalData expects to receive net cash proceeds of approximately £434m. The investment by Inflexion, a leading investor in the sector, represents a strong endorsement and provides a meaningful partner to drive the Healthcare division's growth. The majority shareholding of 60% in Topco will remain with GlobalData, and Topco and its subsidiaries will continue to be fully consolidated subsidiaries of GlobalData. The Transaction is expected to close during Q2 2024 and is subject to regulatory clearance and completion of the reorganisation of the Healthcare division into a separate corporate group headed by Topco.
GlobalData Healthcare's subscription service offers a one-stop solution for over 2,000 global customers across large global pharma, pharma & biotech, pharma suppliers, professional services and medical devices manufacturers. The proprietary Intelligence Centre platform that the business has developed provides actionable insights into trends related to drugs, trials and therapeutic reports, supporting research and development of pharmaceuticals, and ultimately informing business intelligence decisions. The division generated June 2023 LTM EBITDA of £50m (on a standalone basis).
The Transaction represents a compelling crystallisation of value for shareholders, with the Group receiving a significant cash injection to fuel growth and demonstrates the significant value of its mission-critical data. The implied value for the Healthcare division on a debt free, cash free basis is £1,115m, which compares to a market capitalisation of £1,352m for the entire Group (as at close of market on 20 December).
Following the completion of the Transaction, it is anticipated that GlobalData's balance sheet will go from net debt of £230.8m (as at 30 June 2023), equivalent to 2.3x leverage, to being debt-free and net cash. As well as improving the profitability and cash flow of the Group, the de-levered balance sheet allows management additional flexibility to accelerate value-creating M&A across the Group.
GlobalData and Inflexion have entered into a shareholders' agreement, which will take effect from completion of the transaction, in order to govern the relationship between them. GlobalData will, save in very limited circumstances, have a majority of the voting rights on the Board of Directors of GlobalData Healthcare. Furthermore, in addition to his role as CEO of GlobalData, Mike Danson will serve as Executive Chairman of GlobalData Healthcare.
GlobalData and Inflexion have also agreed to certain customary provisions in relation to minority protections, shareholder consent rights and exit provisions, including drag rights for either shareholder in certain circumstances (subject to a customary right of first offer for the other shareholder).
ENQUIRIES
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GlobalData Plc |
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Mike Danson, Chief Executive Officer |
0207 936 6400 |
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Graham Lilley, Chief Financial Officer |
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J.P. Morgan Cazenove (Nomad, Joint Corporate Broker and Sole Financial Advisor) |
0203 493 8000 |
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Bill Hutchings |
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Mose Adigun |
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Alex Bruce |
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Panmure Gordon (Joint Broker) |
0207 886 2500 |
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Rupert Dearden |
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Dougie McLeod |
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Deutsche Numis (Joint Broker) Nick Westlake Iqra Amin
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0207 260 1000 |
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FTI Consulting (Financial PR) |
0203 727 1000 |
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Edward Bridges |
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Dwight Burden |
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Emma Hall |
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J.P. Morgan Cazenove is acting as Sole Financial Advisor to GlobalData Plc. Reed Smith LLP is acting as legal counsel to GlobalData.
J.P. Morgan Securities plc, which conducts its UK investment banking activities as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), and which is authorised in the United Kingdom by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively as sole financial adviser for GlobalData Plc and no one else in connection with the Transaction and shall not be responsible to anyone other than GlobalData Plc for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, nor for providing advice in connection with the Transaction or any other matter referred to herein
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