Wilmington Regulatory News (WIL)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION for the purposes of Article 7 of EU Regulation 596/2014.

19 January 2017

Wilmington plc

Acquisition of Health Service Journal

- Significantly strengthens Wilmington's presence across the UK healthcare market -

- Acquisition brings positive cross-sell opportunities and recurring revenue streams -

Wilmington plc ("Wilmington" or the "Group"), the knowledge leader in Risk & Compliance, Finance, Legal, and Insight, announces it has reached agreement to acquire the Health Service Journal ("HSJ" and the "Acquisition"), the UK's leading health information, insight and networking business, from Ascential plc for £19m with an adjustment for working capital, payable on completion. The consideration is to be funded from the Group's existing debt facilities. The Acquisition is expected to complete on 31 January 2017.

The Acquisition is consistent with Wilmington's strategy of acquiring complementary businesses with high levels of recurring revenues and strong cash generation. HSJ will sit within Wilmington's Insight division, aligned with Wilmington Healthcare and will position Wilmington as the leading provider of insight, analytics, networking and education in UK Healthcare; one of the priority areas for the Group's capital allocation.

Background to HSJ

HSJ is the UK's leading health information, insight and networking business with a highly trusted brand providing unparalleled penetration into the NHS and private vendor space through subscription information and data products, events and awards and marketing solutions.

HSJ has a growing recurring revenue stream from subscriptions and annual events which last year represented around 70% of total revenue (*1). The existing management team, led by Andy Baker and Alastair McLellan, will remain with the business and are included within the c60 employees anticipated to transfer across to the Group with HSJ.

HSJ's key products are:

· HSJ.co.uk: HSJ's flagship digital information product is the UK's premier source of proprietary content, insight, comment and analysis on the UK healthcare sector. HSJ Online has approximately 17,000 users and is sold on an individual and increasingly corporate subscription basis. HSJ Online is widely recognised for its thought leadership in the UK healthcare sector.

· HSJ Intelligence: a fast growing digital data subscription product with approximately 20,000 data points, which was launched in 2014. It already has 115 enterprise customers from across the healthcare industry and presents a significant growth opportunity for HSJ.

· HSJ Events: 11 annual networking events including awards, large scale conferences and summits and the flagship Health Service Journal Awards event.

· HSJ Marketing Services: targeted marketing solutions for the healthcare industry and a legacy digital recruitment offering.

Acquisition rationale

The HSJ business will be integral to Wilmington's market leading healthcare business significantly enhancing the Group's presence across the UK healthcare market. Uniquely, Wilmington Healthcare will have a complete UK industry presence across both provider/payer and the private sector in Pharma and MedTech and other healthcare providers.

Healthcare expenditure is inexorably rising and businesses need the solutions that Wilmington Healthcare provides to optimise their activities. The acquisition of HSJ will enhance Wilmington's access to senior decision makers and access to a wider group of healthcare stakeholders who will benefit from the combined business's enhanced solutions.

The Acquisition brings clear cross-selling opportunities to the Group with attractive options to expand its services. By way of example, this is likely to include the combining of qualitative and quantitative analysis to support clients, including the NHS. Wilmington will align the HSJ events business with its other Insight events operations to offer an even wider range of networking opportunities and events.

HSJ's revenue is principally of a high quality recurring nature as a result of its growing subscription revenue base supported by annual events and, to an increasingly lesser extent, marketing services.

Financial impact

The Acquisition is expected to be earnings per share enhancing in the first full year of ownership. HSJ revenue for the 12 months ended 31 December 2016 was £10m with pro-forma contribution before Group overheads of £4.4m. HSJ's gross assets at 30 June 2016 were £12.8m including intangible assets.

Extension of banking facility

The Group has also exercised its option to activate an accordion facility which provides it additional headroom of £20m on its existing multicurrency debt facility, increasing the total level of that facility to £85m.

Commenting on the acquisition Pedro Ros, Chief Executive of Wilmington plc, said:

"I am pleased to be announcing this acquisition of Health Service Journal, which represents an exciting opportunity for Wilmington to acquire a brand of exceptional status in the UK Healthcare market, a primary source of critical information and insight to senior management and decision-makers in the NHS and wider healthcare sector.

I'm delighted to welcome Health Service Journal to Wilmington, a highly complementary and earnings enhancing acquisition. Together with our Wilmington Healthcare business, the combination will become a central presence across the UK healthcare market. This will open up a number of important cross-selling and networking opportunities for us to provide even more powerful, market leading insight to our clients."

Alastair McLellan, Editor of HSJ, said:

"We are very pleased to be joining Wilmington and we look forward to providing critical information and insight to the healthcare industry under new ownership. Collaborating together with Wilmington's existing Healthcare business will bring a range of new information service and networking opportunities and we look forward to the challenge with confidence." 

Andy Baker Managing Director of HSJ added:

"HSJ is highly respected for the quality of its content and its journalism and the acquisition will further support Wilmington's market leading content acquisition and analysis. It's incredibly exciting for HSJ to be joining a business as committed to healthcare as Wilmington and I think it bodes extremely well for HSJ's subscribers and customers."

[2] Unaudited pro-forma based on management information at 31 December 2016

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