MONTREAL, Feb. 1, 2018 /CNW Telbec/ - Data-driven marketing
and loyalty analytics company Aimia Inc. (TSX: AIM) today announced
it has sold its Nectar loyalty program and related assets
(including the Nectar trademarks) to J Sainsbury plc for a gross
consideration of approximately $105
million(1) (£60 million).
Sainsbury's was a founding partner of the Nectar coalition in
2002. Today, the Sainsbury's group reaches across grocery,
financial services, energy, clothing, and general merchandise. With
that diversification, Sainsbury's now covers many of the key
categories for a typical retail coalition and is Nectar's largest
issuance and redemption partner.
The evolution of the Sainsbury's group has led to more limited
prospects for Nectar to add new non-competitive partners of scale.
When combined with the takeover of partner Homebase by Bunnings and
the exit of British Gas, Aimia ultimately determined that retaining
its ownership of the Nectar business offered more limited
opportunities to add value to the company and the parties mutually
agreed to pursue a sale of the business to Sainsbury's.
"Selling the Nectar business to Sainsbury's was the optimal
risk-adjusted outcome for Aimia and we have worked to ensure a
seamless transition for collectors and employees," said
David Johnston, Group Chief
Executive, Aimia. "The transaction allows for a sharper focus on
Aeroplan, our largest and most profitable business, and simplifies
our operations all the while preserving a robust balance sheet
for our ongoing business."
Along with the sale of Nectar business and Aimia's Intelligent
Shopper Solutions U.K. and Intelligent Research businesses, and a
50% equity stake in its i2c joint venture with Sainsbury's, the
agreement also provides for the transfer to Sainsbury's of
approximately $183 million (£105
million) of cash providing coverage against the Nectar redemption
liability. Aimia will continue to deliver customer insights and
data analytics platforms to customers outside the U.K.
The transaction is also subject to customary working capital
adjustments based on closing accounts, with net working capital
amounts paid to Sainsbury's at closing of approximately
$96 million (£55 million).
Included in this amount are net payables in respect of December
redemptions normally paid in the first quarter of the year.
Aimia also obtained the consent of its lenders, as required for
the release of one of Aimia's subsidiary guarantors under its
senior credit agreement. In connection with this consent, Aimia has
reduced its overall debt level with a $100
million repayment made at closing and the overall size of
the facility has been reduced to $208
million. In addition, Aimia has agreed to certain amendments
to the credit agreement which include amendments(2) in
respect of quarterly debt paydowns contingent on positive free cash
flow performance, working capital requirements for new borrowings,
elimination of the Deferred Revenue Reserve (DRR) Fund alongside
insertion of a minimum liquidity covenant, lower leverage
covenants, tighter restrictions on common and preferred share
dividend payments and revised conditions around acquisitions and
disposals.
As at September 30, 2017, Aimia
had close to $670 million of cash and
cash equivalents (including investments in corporate and government
bonds). Adjusting for and giving effect to the Nectar transaction,
Aimia's net cash and liquidity position will be reduced by
approximately $174 million. As the
contractual requirement with Sainsbury's under which approximately
$208 million (at September 30, 2017) had previously been held in
reserve by Aimia no longer applies, Aimia views the impact of the
Nectar transaction as having a positive impact on Aimia's net cash
position prior to giving effect to the repayment of $100 million under its credit facility and any
positive cash inflows generated by the Nectar business in the
fourth quarter.
The businesses being sold today will be presented as
discontinued operations in the financial statements and
accompanying MD&A for the year ended December 31, 2017. Divisional 2017 results, along
with 2016 comparatives, and 2018 guidance are expected to be
provided with the company's results for the year ended December 31, 2017, to be issued after the TSX
market close on February 14,
2018.
RBC Capital Markets acted as financial advisor to Aimia in
relation to the Nectar transaction.
Conference Call and Audio Webcast Information
Aimia will host a conference call to discuss today's
announcement at 8:30 a.m. EST,
Thursday, February 1, 2018, which
will be webcast at:
http://event.on24.com/r.htm?e=1597891&s=1&k=EF179B6DCE0492A54395D9EACA5E923E
Analysts intending to ask questions can dial into the call at
1-888-231-8191 (647-427-7450 for the Toronto area and 0800-051-7107 in the
U.K.).
A slide presentation intended for simultaneous viewing with the
conference call will be available at:
http://www.aimia.com/en/investors/presentations and an archived
audio webcast will be available at:
https://www.aimia.com/investors/events/ for 90 days following the
original broadcast.
Notes
- Canadian dollar amounts in this release have been calculated on
the basis of the CAD/£ of 1.7433 at January
31, 2018.
- The amendments to the company's credit facility will be filed
on the SEDAR website maintained by the Canadian Securities
Authorities at www.SEDAR.com.
About Aimia
Aimia Inc.'s (TSX:AIM) data-driven marketing and loyalty
analytics provides clients with the customer insights they need to
make smarter business decisions and build relevant, rewarding and
long-term one-to-one relationships, evolving the value exchange to
the mutual benefit of both our clients and consumers.
Aimia partners with groups of companies and individual companies
to help generate, collect and analyze customer data and build
actionable insights.
Our businesses include Aeroplan in Canada and Air Miles Middle East. The
provision of loyalty strategy, program development, implementation
and management services for other clients are underpinned by
leading products and technology platforms such as the Aimia Loyalty
Platform – Enterprise and Aimia Loyalty Platform – SaaS, and
through our analytics and insights business, including Intelligent
Shopper Solutions. In other markets, we own stakes in loyalty
programs, such as Club Premier in Mexico and Think Big, a partnership with Air
Asia and Tune Group. Our clients are diverse, and we have
industry-leading expertise in the fast-moving consumer goods,
retail, financial services, and travel and airline industries
globally to deliver against their unique needs.
For more information about Aimia, visit www.aimia.com.
Forward-Looking Statements
Forward-looking statements are included in this news release.
These forward-looking statements are typically identified by the
use of terms such as "outlook", "guidance", "target", "forecast",
"assumption" and other similar expressions or future or conditional
terms such as "anticipate", "believe", "could", "estimate",
"expect", "intend", "may", "plan", "predict", "project", "will",
"would", and "should". Such statements may involve but are not
limited to comments with respect to strategies, expectations,
planned operations or future actions.
The above guidance (including Gross Billings, Adjusted EBITDA
margin and Free Cash Flow before Dividends Paid) constitutes
forward-looking statements. Aimia made a number of economic and
market assumptions in preparing its above guidance as well as
assumptions regarding currencies and the performance of the
economies in which the Corporation operates and market competition
and tax laws applicable to the Corporation's operations. The
Corporation cautions that the assumptions used to prepare the above
guidance, although reasonable at the time they were made, may prove
to be incorrect or inaccurate. In addition, the above guidance does
not reflect the potential impact of any non-recurring or other
special items or of any new material commercial agreements,
dispositions, mergers, acquisitions, other business combinations or
other transactions that may be announced or that may occur after
February 1, 2018. The financial
impact of these transactions and non-recurring and other special
items can be complex and depends on the facts particular to each of
them. We therefore cannot describe the expected impact in a
meaningful way or in the same way we presently know about the risks
affecting our business. Accordingly, our actual results could
differ materially from our expectations as set forth in this news
release.
Forward-looking statements, by their nature, are based on
assumptions and are subject to important risks and uncertainties.
Any forecasts, predictions or forward-looking statements cannot be
relied upon due to, among other things, changing external events
and general uncertainties of the business and its corporate
structure. Results indicated in forward-looking statements may
differ materially from actual results for a number of reasons,
including without limitation, dependency on Significant
Accumulation Partners and clients, failure to safeguard databases,
cyber security and consumer privacy, reliance on Redemption
Partners, conflicts of interest, greater than expected redemptions
for rewards, regulatory matters, retail market/economic conditions,
industry competition, Air Canada liquidity issues or air travel
industry disruptions, airline industry changes and increased
airline costs, supply and capacity costs, unfunded future
redemption costs, changes to coalition loyalty programs, seasonal
nature of the business, other factors and prior performance,
foreign operations, legal proceedings, reliance on key personnel,
labour relations, pension liability, technological disruptions,
inability to use third-party software and outsourcing, failure to
protect intellectual property rights, interest rate and currency
fluctuations (including currency risk on our foreign
operations which are denominated in a currency other than the
Canadian dollar, mainly the pound sterling, and subject to
fluctuations as a result of foreign exchange rate
variations), leverage and restrictive covenants in current
and future indebtedness, uncertainty of dividend declarations
and/or payments on either common shares or preferred shares,
managing growth, credit ratings, audit by tax authorities, as well
as the other factors identified throughout Aimia's public
disclosure records on file with the Canadian securities regulatory
authorities.
The forward-looking statements contained herein represent
Aimia's expectations as of February 1,
2018, and are subject to change after such date. However,
Aimia disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise, except as required under applicable
securities regulations.
SOURCE AIMIA