EQN.L Regulatory News (EQN)

NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS ("PROSPECTUS") OR PROSPECTUS EQUIVALENT DOCUMENT. NOTHING HEREIN SHALL CONSTITUTE AN OFFERING OF NEW SHARES. NOTHING IN THIS ANNOUNCEMENT SHOULD BE INTERPRETED AS A TERM OR CONDITION OF THE RIGHTS ISSUE. ANY DECISION TO PURCHASE, SUBSCRIBE FOR, OTHERWISE ACQUIRE, SELL OR OTHERWISE DISPOSE OF ANY NEW SHARES MUST BE MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN AND INCORPORATED BY REFERENCE INTO THE PROSPECTUS ONCE PUBLISHED. COPIES OF THE PROSPECTUS WILL, FOLLOWING PUBLICATION, BE AVAILABLE FROM THE REGISTERED OFFICE OF EQUINITI GROUP PLC AND ON ITS WEBSITE AT WWW.EQUINITI.COM.

12 July 2017

For Immediate Release

EQUINITI GROUP PLC

PROPOSED ACQUISITION OF WELLS FARGO'S SHARE REGISTRATION & SERVICES BUSINESS AND FULLY UNDERWRITTEN RIGHTS ISSUE

Summary

· Equiniti Group plc ("Equiniti", or the "Company"), the specialist technology outsourcer providing non-discretionary payment and administration services, is pleased to announce the proposed acquisition and carve out of the Wells Fargo Share Registration & Services business ("WFSS") for a total cash consideration of $227 million (c.£176 million)1 (the "Acquisition") subject to certain customary closing adjustments and conditions

· The Acquisition combines the #1 UK and #32 US share registrars to create a multi-national share registration and services business spanning the world's deepest capital markets, which will create a more diversified, multi-national group

· Founded in 1929, WFSS provides share registration, corporate actions, and investment plan services to c.1,200 public and private US companies and other global companies and c.9.2 million shareholder records processed in the US

· WFSS occupies a leading US market position and is growing market share driven by strong organic revenue growth (c.6% 2014-16A Revenue CAGR)3 from recent client wins and high profile corporate actions business. In 2016 WFSS delivered revenues of $104 million (c.£81 million)1,3,4 and had adjusted profits to be acquired of $18 million (c.£14 million)1,4,7 

· The Acquisition has a compelling strategic rationale:

o Transforms Equiniti into a multinational share registration business delivering scale benefits

o Highly attractive entry point into the US: the largest, most active but consolidated share registration market with strong development opportunities for Equiniti

o WFSS has a strong track record of organic growth and market share capture

o Excellent strategic fit and direct core competency correlation between Equiniti and WFSS

o Near term value opportunity from introduction of Equiniti's state-of-the-art Sirius platform to the US share registry market

o Significant cost synergies anticipated

· The Acquisition is financially attractive for Shareholders:

o Expected to be strongly earnings accretive5 in the first full year of ownership and double digit earnings accretive5 by the end of the second full year of ownership2,3,4

o Expected to deliver strong returns for Shareholders - ROIC (post tax) is anticipated to exceed WACC in second full year of ownership2,3,4 

o Expected cost synergies estimated to be at least $10 million (c.£8 million)1 per annum achievable by the third full year of ownership, with 50% achieved by the second full year of ownership. Delivery will leverage Equiniti's strong track record of integration and carve out experience

o Significant opportunities identified to cross-sell Equiniti services to WFSS clients

o Pro-forma Enlarged Group leverage is expected to be broadly in line with the current group level (dependent on completion date) with a clear deleveraging profile to Equiniti's 2-2.5x medium term objective by the end of the second full year of ownership3,4,5

· Todd May, currently Executive Vice President and Head of WFSS, will continue to manage WFSS post-closing and will report directly to Equiniti Chief Executive Guy Wakeley

· Due to the scale of the Acquisition it will be conditional on the approval of Equiniti's Shareholders at a General Meeting expected to be held in September 2017

· The cash consideration and Equiniti's transaction expenses are expected to be financed from a planned £122 million (c.$160 million) 1 fully underwritten Rights Issue and £120 million (c.$155 million)1 fully underwritten new debt facilities

· The Rights Issue is expected to be launched in September 2017, subject to the approval of the Acquisition by Shareholders and other customary conditions, such as the availability of new debt facilities. Equiniti has entered into a standby underwriting agreement with Citi and Barclays in respect of all the new shares to be issued pursuant to the Rights Issue

· The Acquisition is anticipated to complete during Q4 2017/Q1 2018 following completion of the carve out of WFSS and regulatory approval

· Equiniti is expected to report its 2017 interim results on 28 July 2017. Since the trading update provided on 25 April 2017, performance has continued to be in line with management expectations

Commenting on the Acquisition, Guy Wakeley, Chief Executive of Equiniti, said:

"The combination with WFSS is a unique and exciting opportunity to create a technology-enabled, multi-national share registration capability, powered by Equiniti's proprietary Sirius platform, with significant scale and global reach. The team at WFSS have an extraordinarily deep heritage in providing great service to the greatest American companies, and together we will grow these relationships with our digital services, share-plan capabilities, and a broad suite of regtech capabilities. We are looking forward to welcoming our new colleagues into Equiniti. 

Also commenting on the Acquisition, Todd May, EVP, Head of Shareowner Services at WFSS said:

"Joining the Equiniti team will be a great benefit to our clients and team members. Our strong culture of keeping clients and team members at the heart of everything we do is synergistic with Equiniti's culture. Equiniti's sophisticated technology will ultimately empower our team members to offer enhanced services to clients and our client's shareowners while continuing to improve on our industry leading servicing capabilities. Wells Fargo and Equiniti will work together to ensure a seamless transition."

This summary should be read in conjunction with the full text of this announcement.

Analyst and investor meeting, conference call and webcast details:

An analyst and investor meeting and conference call (with webcast facilities) will be held at 09:00 a.m. (UK time) at the Andaz, 40 Liverpool St, London EC2M 7QN today.

Dial in details:

Standard International Access:

+44 (0) 20 3003 2666

UK Toll Free:

0808 109 0700

New York:

+1 212 999 6659

USA Toll Free:

+1 866 966 5335

Password: Equiniti

A recording of the webcast will be available later today, after the conclusion of the meeting, on our website as below.

http://www.equiniti.com

Enquiries and further information:

Analyst/Investor enquiries:

Equiniti Group plc

Guy Wakeley, Chief Executive +44 (0) 20 7469 1811

John Stier, Chief Financial Officer

Frances Gibbons, Head of Investor Relations

Greenhill & Co. International LLP - Lead Financial Adviser and Joint Sponsor

Ed Welsh +44 (0) 20 7198 7400

Kirk Wilson

David Wyles

Michael Lord

Citigroup Global Markets Limited - Joint Financial Adviser, Joint Sponsor, Joint Global Co-ordinator and Joint Bookrunner

Alex De Souza +44 (0) 20 7986 4000

Alex Carter

Christopher Wren 

Barclays Bank PLC - Joint Global Co-ordinator and Joint Bookrunner

Richard Probert +44 (0) 20 7623 2323

Lawrence Jamieson

Stuart Jempson 

Media enquiries:

Temple Bar Advisory

Alex Child-Villiers +44 (0) 7795 425 580

Will Barker +44 (0) 7827 960 151

IMPORTANT NOTICE

This announcement contains inside information. The person responsible for this announcement is Kathy Cong, company secretary.

This announcement has been issued by, and is the sole responsibility of, Equiniti. No representation or warranty, express or implied, is or will be made by, or in relation to, and no responsibility or liability is or will be accepted by Greenhill & Co International LLP ("Greenhill"), Citigroup Global Markets Limited ("Citi") and Barclays Bank PLC ("Barclays"), or by any of their respective affiliates or agents or by any advisor to Equiniti or by any of their affiliates or agents as to or in relation to the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any responsibility or liability therefore is expressly disclaimed.

This announcement is not a prospectus but an advertisement and investors should not acquire any Nil Paid Rights, Fully Paid Rights or New Shares referred to in this announcement except on the basis of the information contained in the Prospectus to be published by Equiniti in connection with the Rights Issue. The information contained in this announcement is for background purposes only and does not purport to be full or complete. The information in this announcement is subject to change.

A copy of the Prospectus when published will be available from the registered office of Equiniti and on Equiniti's website at www.Equiniti.com provided that the Prospectus will not, subject to certain exceptions, be available (whether through the website or otherwise) to Shareholders in the United States, Australia, Canada, Japan or any jurisdiction in which it would be unlawful to do so (each an "Excluded Territory").

Neither the content of Equiniti's website nor any website accessible by hyperlinks on Equiniti's website is incorporated in, or forms part of, this announcement. The Prospectus will give further details of the New Shares, the Nil Paid Rights and the Fully Paid Rights being offered pursuant to the Rights Issue.

The distribution of this announcement into jurisdictions other than the United Kingdom may be restricted by law, and, therefore, persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws of such jurisdiction. In particular, subject to certain exceptions, this announcement, the Prospectus (once published) and the Provisional Allotment Letters (once printed) should not be distributed, forwarded to or transmitted in or into the United States or any other Excluded Territory.

This announcement is for information purposes only and is not intended to and does not constitute or form part of any offer or invitation to purchase or subscribe for, or any solicitation to purchase or subscribe for, Nil Paid Rights, Fully Paid Rights or New Shares or to take up any entitlements to Nil Paid Rights in any jurisdiction. No offer or invitation to purchase or subscribe for, or any solicitation to purchase or subscribe for, Nil Paid Rights, Fully Paid Rights or New Shares or to take up any entitlements to Nil Paid Rights will be made in any jurisdiction in which such an offer or solicitation is unlawful. The information contained in this announcement is not for release, publication or distribution to persons in the United States or any other Excluded Territory, and should not be distributed, forwarded to or transmitted in or into any jurisdiction, where to do so might constitute a violation of local securities laws or regulations.

The Nil Paid Rights, the Fully Paid Rights, the New Shares and the Provisional Allotment Letters have not been and will not be registered under the Securities Act or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the United States except pursuant to an applicable exemption from or in a transaction not subject to the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of the Nil Paid Rights, the Fully Paid Rights or the New Shares in the United States.

The information in this announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.

This announcement does not constitute a recommendation concerning any investors options with respect to the Rights Issue. The price and value of securities can go down as well as up. Past performance is not a guide to future performance. The contents of this announcement are not to be construed as legal, business, financial or tax advice. Each Shareholder or prospective investor should consult his, her or its own legal adviser, business adviser, financial adviser or tax adviser for legal, financial, business or tax advice.

The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States. This announcement does not contain or constitute an offer for sale or the solicitation of an offer to purchase securities in the United States. Any securities referred to herein have not been and will not be registered under the Securities Act, and may not be offered or sold in the United States absent registration under the Securities Act or an available exemption from, or transaction not subject to, the registration requirements of the Securities Act.

To the extent available, the industry and market data contained in this announcement has come from official or third party sources. Third party industry publications, studies and surveys generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of the accuracy or completeness of such data. The Company has not independently verified the data contained therein. In addition, certain industry and market data contained in this announcement come from the Company's own internal research and estimates based on the knowledge and experience of the Company's management in the market in which the Company operates. While the Company believes that such research and estimates are reasonable and reliable, they, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or completeness and are subject to change without notice. Accordingly, undue reliance should not be placed on any of the industry or market data contained in this announcement.

Notice to all investors

Greenhill is authorised and regulated by the FCA in the United Kingdom. Greenhill is acting for the Company and no one else in connection with this Announcement and the Acquisition and will not regard any other person as a client in relation this Announcement and the Acquisition and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in connection with this Announcement, the Acquisition or any other matter, transaction or arrangement referred to herein.

Citi and Barclays which are authorised by the PRA and regulated by the FCA and the PRA in the United Kingdom, are acting solely for the Company and no one else in connection with this Announcement and the Acquisition and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Citi or Barclays, respectively, nor for providing advice in relation to this Announcement or the Acquisition. Neither Citi, Barclays, nor any of their respective subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Citi or Barclays, respectively, in connection with this Announcement, the Acquisition, any statement contained in this Announcement or otherwise.

Apart from the responsibilities and liabilities, if any, which may be imposed on Greenhill, Citi or Barclays under FSMA or the regulatory regime established thereunder. Greenhill, Citi and Barclays accept no responsibility whatsoever for the contents of this announcement, including its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on its behalf, in connection with Equiniti, the Nil Paid Rights, the Fully Paid Rights, the New Shares, the Acquisition or the Rights Issue or any other matter referred to herein. Subject to applicable law, each of Greenhill, Citi and Barclays accordingly disclaims, to the fullest extent permitted by law, all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this announcement or any such statement.

No person has been authorised to give any information or to make any representation other than those contained in this announcement and the Prospectus and, if given or made, such information or representations must not be relied on as having been authorised by Greenhill, Citi or Barclays. Subject to the Listing Rules, the Prospectus Rules and the Disclosure and Transparency Rules, the issue of this announcement shall not, in any circumstances, create any implications that there has been no change in the affairs of Equiniti since the date of this announcement or that the information in it is correct as at any subsequent date.

Citi or Barclays may, in accordance with applicable laws and regulations, engage in transactions in relation to the Provisional Allotment Letters, the Nil Paid Rights, the Fully Paid Rights, the New Shares and/or related instruments for their own account for the purpose of hedging their underwriting exposure or otherwise. Except as required by applicable laws or regulations, neither Citi nor Barclays propose to make any public disclosure in relation to such transactions.

Cautionary statement regarding forward-looking statements

This announcement may contain certain forward-looking statements, beliefs or opinions, with respect to the financial condition, results of operations and business of Equiniti, WFSS and Equiniti and its subsidiary undertakings, and, where the context requires, its associated undertakings, following the completion of the Acquisition (the "Enlarged Group").

These statements, which contain the words "anticipate", "believe", "intend", "estimate", "expect", "may", "will", "seek", "continue", "aim", target", "projected", "plan", "goal," "achieve" and words of similar meaning, reflect the Company's beliefs and expectations and are based on numerous assumptions regarding the Company's present and future business strategies and the environment the Company and the Enlarged Group will operate in and are subject to risks and uncertainties that may cause actual results to differ materially. No representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. Forward-looking statements involve inherent known and unknown risks, uncertainties and contingencies because they relate to events and depend on circumstances that may or may not occur in the future and may cause the actual results, performance or achievements of the Company or the Enlarged Group to be materially different from those expressed or implied by such forward looking statements. Many of these risks and uncertainties relate to factors that are beyond the Company's or the Enlarged Group's ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of regulators and other factors such as the Company's or the Enlarged Group's ability to continue to obtain financing to meet its liquidity needs, changes in the political, social and regulatory framework in which the Company or WFSS operates or in economic or technological trends or conditions. Past performance of the Company or WFSS cannot be relied on as a guide to future performance. As a result, you are cautioned not to place undue reliance on such forward-looking statements. The list above is not exhaustive and there are other factors that may cause the Company's or the Enlarged Group's actual results to differ materially from the forward-looking statements contained in this announcement. Forward-looking statements speak only as of their date and the Company, its parent and subsidiary undertakings, the subsidiary undertakings of such parent undertakings, Greenhill, Citi and Barclays and any of their respective directors, officers, employees, agents, affiliates or advisers expressly disclaim any obligation to supplement, amend, update or revise any of the forward-looking statements made herein, except where it would be required to do so under applicable law.

You are advised to read this announcement and, once published, the Prospectus in their entirety for a further discussion of the factors that could affect the Company's future performance. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this announcement may not occur.

No statement in this announcement is intended as a profit forecast or a profit estimate and no statement in this announcement should be interpreted to mean that earnings per share of Equiniti for the current or future financial years would necessarily match or exceed the historical published earnings per share of Equiniti.

EQUINITI GROUP PLC

PROPOSED ACQUISITION OF WELLS FARGO'S SHARE REGISTRATION & SERVICES BUSINESS AND FULLY UNDERWRITTEN RIGHTS ISSUE

1. Introduction

Equiniti Group plc ("Equiniti", or the "Company"), the specialist technology outsourcer providing non-discretionary payment and administration services, today announces the proposed acquisition and carve out of the Wells Fargo Share Registration Services business ("WFSS" or the "Business") for a total cash consideration of $227 million (c.£176 million)1 (the "Acquisition").

Due to the scale of the Acquisition it will be conditional on the approval of Equiniti's Shareholders at a General Meeting expected to be held in September 2017.

The Acquisition will be funded through a planned Rights Issue to raise approximately £122 million (c.$160 million)1 and Equiniti debt facilities of £120 million (c.$155 million)1. The Rights Issue is expected to be launched in September 2017, subject to the approval of the Acquisition and of the Rights Issue by Shareholders at the General Meeting.

2. Reasons for the Acquisition

The US is the largest and most active market for share registration services. WFSS is a high quality asset with a well-established position and growing market share.

The Directors believe that the Acquisition has a compelling strategic rationale. In acquiring WFSS, the third largest share registrar by number of clients in the US market, Equiniti will become a multinational share registration and services business spanning the deepest capital markets, creating a more diversified, multi-national group. Equiniti is expected to have the opportunity to provide a broader range of services, such as share plan administration, than WFSS currently provides its clients.

The Directors believe that the Acquisition is financially attractive for Shareholders. The Acquisition is expected to be strongly earnings accretive5 in the first full year of ownership, double digit earnings accretive6 by the end of the second full year of ownership and deliver strong returns with ROIC (post tax) anticipated to exceed WACC in second full year of ownership3,4,5.

Pro-forma Enlarged Group leverage is expected to be broadly in line with the current group level (dependent on completion date) with a clear deleveraging profile to Equiniti's 2-2.5x medium term objective by the end of the second full year of ownership3,4,5.

· Transformational acquisition to combine local expertise with global reach: The Acquisition combines the #1 UK and #3 US share registration businesses to transform Equiniti into a multi-national share registration business delivering scale benefits stemming from direct opportunities to target new "big ticket" and dual listed registry clients and deliver multi-national solutions.

· Highly attractive US market entry point: The Directors believe that the Acquisition provides Equiniti with a high quality, well invested platform for growth in the large, active but highly consolidated US share registry market. The US shareholder services industry is mature in nature, with the top three participants accounting for c.80% of total market share. Consolidation continues to be a long-term trend in the US shareholder services industry.

The Directors believe strong development opportunities exist in the US market for Equiniti. The US market has structural similarities with the UK, but is much larger, with c.18,500 US corporate issuers (vs. c.2,500 UK corporate issuers). The US has also experienced higher levels of corporate activity than other geographies since 2008 and is subject to a rising interest rate environment.

· Strong track record of organic growth: WFSS occupies a leading US market position servicing c.650 issuers including Hewlett Packard, J.P.Morgan and Wells Fargo. WFSS is demonstrating strong client momentum with ten client wins in 2016 including General Electric and Procter & Gamble. The combination of the factors above is delivering good organic revenue growth (c.6% 2014-16A Revenue CAGR)3, growing market share 22%2 and strong shareholder conversion (e.g. c.900,000 during 2016).

Both WFSS and Equiniti possess a strong financial services client orientation. Equiniti has 150 financial services clients and WFSS has 57. Following the carve out of Equiniti from Lloyds Banking Group in 2007-2008, Lloyds continues to be one of Equiniti's largest clients.

WFSS has also been very active in recent high profile US corporate transactions, including:

o Exelon Corp's $6.8bn acquisition of Pepco Holdings in 2016 (paying agent)

o Procter & Gamble's $12.6bn divestiture of certain beauty brands in 2016 (depository agent)

o Alcatel-Lucent's c.$16.6bn sale to Nokia in 2016

o Valvoline's $660m IPO in 2016

o H.J. Heinz's $55bn acquisition of Kraft Foods Group in 2015 (paying agent)

o UnitedHealth Group's $12.8 billion acquisition of Catamaran in 2015 (paying agent)

· Excellent strategic fit and direct core competency correlation: The Directors believe that Equiniti's and WFSS's operating models are very well aligned. Equiniti and WFSS's client bases both exhibit high client fidelity. During 2015 and 2016 Equiniti maintained 100% of its clients with an average client tenure of 29 years (for FTSE 100 clients). WFSS has the highest client loyalty statistics in the US market and has been recognized by clients for its high quality of service and has been a service award winner for sixteen of the past seventeen years.

Equiniti and WFSS client service methodologies are both "value proposition" orientated and both operators have fostered a culture of market leading client service provision.

Equiniti and Wells Fargo envisage having a strong reciprocal relationship, based on an agreed Transition Services Agreement ("TSA") and ongoing commercial relationship.

· Near term value opportunity to migrate WFSS to Equiniti's market leading technology platform: Equiniti's management intend to migrate WFSS onto Equiniti's market leading Sirius platform (Equiniti's proprietary registration database and workflow management system). Initial work undertaken by Equiniti indicates high levels of cross functionality which will be leveraged to drive operational excellence and extract cost synergies.

Equiniti management intends to ensure the planned Sirius migration is both a measured and low risk migration of data over an appropriate timescale in order to bring Equiniti's full capabilities to WFSS' clients and then to target investment to drive future growth.

· Expected to be strongly earnings accretive5 with strong returns for Shareholders: Equiniti Management expects the Acquisition to be strongly EPS accretive6 in the first full year of ownership, and double digit earnings accretive5 in the second full year of ownership and ROIC (post-tax) is expected to exceed Equiniti WACC in the second full year of ownership3,4,5.

· Anticipated to release material cost synergies: Equiniti's initial cost synergy assessment estimates cost synergies to be at least $10 million (c.£8 million)1 achievable by the third full year of ownership, with 50% achieved by the second full year of ownership. Delivery will leverage Equiniti's strong track record of integration and carve out experience.

The key areas of cost synergies identified are operational cost efficiencies via the introduction of Equiniti's best in class practices to WFSS' back office function and technology opportunities from the migration of Wells Fargo's legacy systems to Equiniti's market leading Sirius platform which will optimise data management and operational workflow.

Exceptional costs to implement the integration and deliver the synergies are estimated at $26 million (c.£20 million)1 with the majority (c.60%) incurred during 2018 through a combination of carve out, dual running and programme related costs.

The Acquisition is also expected to require one off capex costs of $28 million (c.£22 million) 1 with the majority (c.80%) incurred during 2018 to implement a standalone IT infrastructure and transition to the Sirius IT platform. The Directors expect run rate capex to be c.5% of Enlarged Group revenue as the integration of WFSS completes.

Transaction costs are expected to be approximately £17 million including advisory, debt and equity issuance costs. The Directors anticipate a cash tax rate for WFSS of 5% of pre-tax profit in 2018 and 2019 before rising to c.30% thereafter.

· WFSS has an experienced and strongly aligned management team. Todd May, currently Executive Vice President and Head of WFSS, will continue to manage WFSS post-closing and will report directly to Equiniti Chief Executive Guy Wakeley. The WFSS management team will be incentivised to drive continued performance and synergies.

· Equiniti is expected to leverage its extensive track record of carve out and integration experience to derive a clear pathway to capture cost synergies. Equiniti will be able to draw upon its experience of its own carve out from Lloyds Banking Group in 2007-2008 as a proven blueprint for the WFSS carve out from Wells Fargo, along with experience from subsequent carve outs, including:

o J.P. Morgan Corporate Dealing Services / JP Morgan in 2014

o Self Trade / Societe Generale in 2014

o Killik Employee Services / Killik in 2013

o MyCSP / HMG in 2012

o Xafinity / Equiniti in 2012

o Nat West Stockbrokers CES / RBS in 2011

· Cross-selling opportunities have also been identified: Although new revenue opportunities do exist, these represent incremental upside and are not required to underpin transaction rationale. The principal areas of opportunity that have been identified are within software capabilities including KYC; financial crime; fraud analytics; asset tracing; financial services remediation and complaints; and additional distribution channels e.g. share plans, share registry related services, proxy solicitation, investor relations and multi-national offerings.

· Financing mix strengthens balance sheet flexibility: The Acquisition is expected to be funded through a planned Rights Issue to raise approximately £122 million (c.$160 million)1 and new Equiniti debt facilities of £120 million ($155 million)1, which will provide Equiniti with a stronger financial footing. Pro-forma Enlarged Group leverage is expected to be broadly in line with the current group level, depending on the completion date, with a clear deleveraging profile to Equiniti's 2-2.5x medium term objective by the end of the second full year of ownership3,4,5.

The Acquisition is expected to be well funded with the Group adding $60m of working capital facilities to provide ample funding to support the integration of WFSS and future growth. This should position the Enlarged Group in a strong financial position to take advantage of future strategic opportunities to drive both organic and inorganic growth.

3. Voting

The Directors of Equiniti have undertaken in the Purchase and Assumption Agreement that they intend to unequivocally recommend that the Shareholders of Equiniti vote in favour of the Resolutions at the General Meeting when convened.

4. Summary information on WFSS

Founded in 1929, WFSS provides share registrar, corporate actions, and investment plan services to c.1,200 public and private US companies and other global companies, c.9.2 million shareholder records processed in the US. The WFSS service lines include stock transfer and registry services; proxy and annual meeting services; corporate actions and investment plan services. WFSS is headquartered in Mendota Heights, Minnesota where it has two facilities and other shared facilities including a call centre in Phoenix, Arizona, an office in India and a smaller shared office in New York.

In March 2012 WFSS joined Equiniti in becoming a member of the Global Share Alliance (GSA) to expand its capabilities and as a result the Equiniti and WFSS management teams and operations are well known to each other.

In 2016, WFSS had 385 full-time employees and, based on 2015 Group 5 survey results WFSS has the highest NPS scores in the US market for client loyalty (retention) and customer satisfaction (measured by data security, issuer service and shareholder service).

In 2016 WFSS delivered revenues of $104 million (c.£81 million)1,2 , had adjusted profits to be acquired of $18 million (c.£14 million)1,4,6 and gross assets to be acquired of c.$15 million.

5. Un-audited adjusted financial information on WFSS

Summary un-audited adjusted financial information

WFSS possesses its own Profit & Loss account which is maintained within the Wells Fargo accounting system. Direct revenue and expenses are reported alongside group recharges. The above summary of un-audited adjusted financial information therefore does not reflect WFSS' results on a fully standalone basis.

Management have made a number of adjustments to estimate the results on a standalone basis. These adjustments include: Removal of Wells Fargo corporate overhead cost allocations and costs associated with shared IT platforms, deduction of internal revenue share and addition of estimated standalone entity costs.

Revenues are extracted from WFSS management accounts. Adjusted profits to be acquired are extracted from WFSS management accounts and are stated after certain Equiniti management normalisation and other adjustments to reflect the results of WFSS on a standalone basis.

In accordance with the Listing Rules, the Prospectus, when published, will include full audited historic three year financial information on WFSS in IFRS, in a form consistent with the accounting policies adopted by Equiniti in its own annual consolidated accounts. Such IFRS financial information will accordingly differ from the summary financial information on WFSS set out in this section 5 and on Pages 1 and 13.

6. Summary information on Equiniti

Equiniti is a specialist outsourcer delivering technology-enabled solutions to a wide range of organisations, including c.70 of the companies in the FTSE 100. It is the UK's leading provider of share registration and associated investor services, and also has market leading positions in administration of employee share plans, pension administration and software, and employee benefit schemes. Equiniti's services, which are delivered by over 4,300 employees, benefit 28 million people in the UK and 120 countries around the world.

The Directors believe that the Group offers its clients business critical outsourced services and includes a range of software solutions that support them in areas of complex administration and payment processing. The Group's suite of capabilities can be deployed across multiple different markets with a focus on complex or regulated environments where its clients are managing high volume interactions with their stakeholders.

Equiniti was formed as a stand-alone group in Financial Year 2007 following a carve-out from Lloyds TSB (now part of Lloyds Banking Group). From the outset, a core strategy of the Group has been to broaden the suite of complementary services that it provides to its clients, whilst leveraging its existing core skill-set. As a result, Equiniti has expanded over time into a range of new market segments including, inter alia, pension administration, retail and executive share dealing and custody services, complaints technology and servicing solutions and loan technology and administration, supported by advanced software and regulatory technology capabilities including KYCnet, Riskfactor, Toplevel, Marketing Source and Gateway2Finance.

The Group provides a range of services and is organised in three core divisions: Investment Solutions, Pension Solutions and Intelligent Solutions.

6.1 Investment Solutions (32% of the Group's Revenues for Financial Year 2016).

This division provides registration, employee and investment services including core register administration, company secretary services, investor analytics as well as the administration of SAYE scheme and share incentive plans. The Group also offers share dealing services and wealth management services to corporate clients, employees of corporate clients and also direct to retail customers ("D2C").

6.2 Pension Solutions (34% of the Group's Revenues for Financial Year 2016).

This division, which has a 181-year history, provides defined benefit and defined contribution pension administration and payment services, pension software, data solutions as well as life and pensions administration to government and corporate clients.

6.3 Intelligent Solutions (30% of the Group's Revenues for Financial Year 2016).

This division provides technology and solutions targeting complex or regulated activities, including complaints management, case management and regulatory services. A key strength of the Group is the fidelity of relationships it has with its blue-chip client base. The Group is focused on large corporate clients, including approximately 45 of the companies in the FTSE 100, as well as large government departments. The Group maintains strong relationships with its clients as evidenced by the Group's client retention rate of 100% for its FTSE 100 and FTSE 250 clients in Financial Year 2016. The services it provides to its clients are underpinned by proprietary technology, which the Directors believe is both highly scalable and well invested. Using this technology, the business provides mission critical, "high cost of failure" services whilst maintaining large volumes of critical data helping Equiniti remain a relevant and, therefore, highly valued supplier to its clients. The Group is also able to benefit from a degree of recurring revenues (approximately 50% of total Group revenue was recurring revenue in Financial Year 2016) underpinned by long-term contracts with disincentives to exit that the Directors' believe provide the Group with an attractive and resilient financial profile.

The Group maintains leading positions in its core markets and challenger positions in several other market segments that it has successfully entered since Financial Year 2007. The addressable market for complex outsourced administration and software in the UK is estimated by the Directors to be sized at approximately £3.9 billion per annum. Equiniti currently only serves a small portion of this addressable market and hence the Directors believe there is significant headroom for growth as the Group continues to develop and acquire additional capabilities. Furthermore, the Directors believe that there are favourable macro trends, such as increasing regulation, which may drive increased appetite on the part of corporate clients and government departments to seek outsourcing solutions for their complex needs. The Directors believe that Equiniti is well-placed to benefit from these trends.

The Group also earns income on client balances that it administers and earns fee income which is related to interest income generated by SAYE balances that it administers where income is based on the UK's Bank of England base rate.

7. Forward-looking statements in relation to the Acquisition

Certain Equiniti forward-looking statements in relation to the Acquisition in this announcement (notably in relation to earnings accretion, ROIC and leverage3,4,5) have been based on non-IFRS financial projections relating to WFSS. These statements may be subject to amendment by Equiniti in the Prospectus when such statements are based on WFSS' financial projections under IFRS or IFRS-consistent accounting policies adopted by Equiniti in its own internal Group projections.

8. Summary of the key terms of the Acquisition

In order to implement the Acquisition, Equiniti and Wells Fargo have entered into the Purchase and Assumption Agreement.

Under the terms of the Purchase and Assumption Agreement, and subject to the conditions thereunder being satisfied, Equiniti has agreed to purchase the Acquired Assets and assume the Assumed Liabilities for a cash consideration of $227,000,000 (c.£175,710,200) (subject to certain adjustments).

The Termination Date pursuant to the Purchase and Assumption Agreement is 10 April 2018.

Equiniti will further enter into a transition services agreement with Wells Fargo for the provision of certain transitional services (the "Transition Services Agreement"). In addition, Equiniti and Wells Fargo will enter into the following agreements in the period between the date of the Purchase and Assumption Agreement and the Closing (i) a New Services Agreement under which Wells Fargo will provide Equiniti with, among other services, treasury and cheque clearing services, deposit taking services and trade execution services and (ii) a Commercial Agreement for the continued provision following the Closing of the transfer agent services currently provided by the Business to Wells Fargo.

9. Break fees

A Termination Fee equal to 1% of the market capital of Equiniti as of the signing date is payable by Equiniti to Wells Fargo in the event the Acquisition is terminated because (i) Equiniti does not obtain Shareholder approval to enter into the Acquisition (the "Requisite Buyer Vote") or (ii) the closing does not occur by the Termination Date because of Equiniti's failure to obtain necessary approvals.

10. Financing of the Acquisition

The consideration to be paid by Equiniti at Completion will be $227 million (c.£176 million)1. This consideration and Equiniti's transaction expenses will be financed from the gross proceeds from the Rights Issue and new Equiniti debt facilities which have been fully underwritten by Citi, Barclays and Lloyds. Appropriate foreign exchange hedging arrangements with respect to the Acquisition consideration are being put in place by Equiniti.

The mix of debt and equity financing for the Acquisition is driven by capital structure considerations.

11. Rights Issue

With respect to the Rights Issue, which is expected to raise approximately £122 million (c.$160 million)1 of gross proceeds, Equiniti has entered into a fully underwritten Standby Agreement with Citi and Barclays. The Standby Agreement is expected to remain in place until the publication of the Prospectus, at which point it will be replaced by a definitive Underwriting Agreement. The Standby Agreement provides that the issue price of the Shares to be issued in connection with the Rights Issue will be agreed by Equiniti, Citi and Barclays at the time the Prospectus is published and will be set out in the Underwriting Agreement. The Standby Agreement contains customary representations and warranties, undertakings, conditions and termination rights.

The Rights Issue will be conditional inter alia on, entry into and non-termination of the Purchase and Assumption Agreement, Equiniti Shareholder approval of the Acquisition and other customary conditions, including availability of the new debt facilities. If the Rights Issue were to proceed but the Acquisition does not complete, Equiniti intends to return the Rights Issue proceeds to Shareholders.

12. Dividends

The Board intends to continue with its current policy of paying dividends on a progressive basis, targeting a distribution of around 30% of Equiniti's underlying profit attributable to ordinary Shareholders each year. Following the Acquisition future dividend payments per Share will be adjusted to take account of the enlarged number of Shares that will be in issue following the Rights Issue and the Acquisition.

13. Management and employees

The Board attaches great importance to the skills and experience of the management and employees of WFSS and believes that they will be an important factor for the success of the Enlarged Group. Todd May, currently Executive Vice President and Head of WFSS, will continue to manage WFSS post-closing within Equiniti and will report directly to Equiniti Chief Executive Guy Wakeley. Equiniti has a good track-record of incentivising and retaining key management of businesses that it has acquired. Equiniti expect to invest in and grow both WFSS's operational capabilities and team, and Equiniti propose to send UK personnel to the US on secondment during the transitional period to ensure a smooth integration process. 

14. Expected timetable of principal events

12 July 2017 Transaction announcement

July 2017 Application for regulatory licenses

28 July 2017 Equiniti Interim results

September 2017 Prospectus published and posted to Shareholders

September 2017 EGM to approve the Acquisition

September 2017 Expected launch of the Rights Issue

October 2017 Expected completion of the Rights Issue

November 2017 Regulatory approvals and anti-trust clearances

Q4 2017 / Q1 2018 Expected completion of the Acquisition

APPENDIX I - KEY NOTES

1. USD/GBP foreign exchange rate of 0.775 used for transaction value, 0.777 used for all other conversions.

2. By number of issuers served.

3. Based on non-IFRS financial projections and may be subject to amendment by Equiniti in the prospectus when based on WFSS' projections under IFRS and / or IFRS-consistent accounting policies adopted by Equiniti.

4. Adjusted profits to be acquired are stated after certain management normalisation and other adjustments to reflect the results of WFSS on a standalone basis. These adjustments include:

- Removal of Wells Fargo corporate overhead cost allocations and costs associated with shared IT platforms

- Deduction of internal revenue share

- Addition of estimated standalone entity costs

5. This statement is not intended as a profit forecast and should not be interpreted to mean that earnings per share for Equiniti for the current or future financial years would necessarily match or exceed historical published earnings.

6. EPS accretion is measured on an adjusted underlying basis.

7. Based on non-IFRS financial information and may be subject to amendment by Equiniti in the prospectus when based on WFSS' information under IFRS and / or IFRS-consistent accounting policies adopted by Equiniti.

APPENDIX II - DEFINITIONS / GLOSSARY