(Alliance News) - WPP PLC on Friday said it intends to award its shareholders and reduce debt as it agreed to sell 60% of Kantar, its global data and consulting business.
Kantar will be sold to investment firm Bain Capital Private Equity, which values all of Kantar at USD4.0 billion.
The FTSE 100-listed advertising company said it expects to receive USD3.1 billion in cash after transaction costs and will continue to own 40% stake in Kantar. Additionally, WPP said it may receive some other payments during the life of its partnership with Bain Capital.
"The amounts of these payments are dependent on future events and outcomes which are too uncertain to allow meaningful estimation today," WPP said in its statement Friday.
The company said it will use net proceeds to reduce its debt leverage, while about USD1.2 billion or GBP1.0 billion will be returned to shareholders. The form of this return will be communicated to shareholders in "due course", WPP said.
At the end of October, WPP had revealed its plans to sell a stake in Kantar as part of an ongoing business simplification and restructuring programme.
At the time, Chief Executive Officer Mark Read said: "There is a significant opportunity to develop Kantar into the world's leading data, insights and consulting company. We believe in the potential for Kantar but given our many priorities, we need to make tough choices and we believe that the best way to unlock this potential is with a strategic or financial partner."
On Friday, WPP said it intends to reorganise to separate the Kantar business from the wider WPP group, with completion expected in early 2020.
"Kantar is a great business and we look forward to working with Bain Capital to unlock its full potential," Read said on Friday. "As a strategic partner and shareholder in Kantar, WPP will continue to benefit from its future growth while our clients continue to benefit from its services and capabilities."