Ascential Regulatory News (ASCL)

25 August 2016

Ascential plc

Acquisition of One Click Retail

Ascential plc (LSE: ASCL.L), the international, business-to-business, media company with a focused portfolio of market-leading events and information services products, today announces that it has agreed to acquire 100% of US-based e-commerce analytics provider Oneclickretail.com LLC ("One Click Retail") for initial cash consideration of $44m plus future earn outs.

The transaction is expected to complete on 31 August 2016 and, upon completion, One Click Retail will sit within Ascential's Information Services segment. The initial consideration will be funded from Ascential's existing cash resources and is expected to be enhancing to adjusted earnings per share in the first full year of ownership.

One Click Retail provides data analytics to help major brands optimize their eCommerce activities. Customers include Procter & Gamble, HP, Unilever, Hamilton Beach, Nestle and Panasonic. Revenue is generated predominantly through recurring annual subscriptions to the company's Dashboard product which provides insights to help customers drive sales through Amazon and other eCommerce retailers - an increasingly important channel for many of them. The insights focus on product market share, its drivers, and the actions that can be taken to increase sales.

Recent developments include the acquisition of international customers outside the US, the extension of the Dashboard to cover Walmart.com and the development of new subscription products: eCommSEO (to optimize eCommerce search rankings), PromoTrack (to enable tracking and optimizing of promotional activity) and 3P Track (covering third party sales in the broader Amazon marketplace).

The company was founded in 2013 by former Amazon and Walmart executive Spencer Millerberg, and is based in Salt Lake City, Utah, USA.

One Click Retail is growing rapidly and delivered unaudited revenue of $4.9m and Adjusted EBITDA of $3.4m for the twelve month period ending December 2015, with a year-on-year growth of 59% and 78% respectively. Gross assets at December 2015 amounted to $0.8m. The company has continued to grow strongly in 2016 such that annualised subscription contract value stood at $10.1m as of July 2016.

As part of the management of its focused portfolio of products, Ascential regularly assesses opportunities to acquire high-growth products operating in sectors with the potential for scale that may benefit from Ascential's know-how and infrastructure. We have identified information services to the eCommerce industry as an attractive vertical and One Click Retail as a high value, high growth product which Ascential can help accelerate globally through, for example, cross-selling their products to existing clients of Ascential.

The future earn outs are based on multiples of adjusted EBITDA of the business for the four years 2016 to 2019 payable in cash or, for certain elements, shares at Ascential's option. A portion of the earn-out payments is also subject to founders remaining in employment with the company. The total aggregate consideration, including initial consideration and earn out payments, is capped at $225m in the event that stretching profit targets are reached, and will be paid over the period to February 2020 .

Duncan Painter, Chief Executive Officer of Ascential said:

"We are delighted to welcome One Click Retail and Spencer and his team to Ascential. It is a quality business that we have been tracking for some time in an exciting part of the retail vertical. As a high-growth, globally scalable subscription information service product, One Click Retail fits with Ascential's strategy of owning scalable, global market-leading products and we look forward to helping its talented management team to accelerate its growth."

Spencer Millerberg, Founder of One Click Retail said:

"One Click Retail is thrilled to be joining the Ascential family. eCommerce is growing nearly seven times faster than bricks-and-mortar retail, and our clients need the most accurate and actionable data available to capture that growth. I am confident that the expertise and global reach of Ascential will enable One Click Retail to develop even better products for our existing customers and welcome new clients from around the world. This is an exciting time for our company and I am looking forward to working with Duncan and his team to deliver on our goals."