TIDMITE
RNS Number : 8181Z
ITE Group PLC
05 September 2018
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO, OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT
JURISDICTION
ITE Group plc
("ITE" or the "Group")
Proposed disposal of ITE Expo LLC
ITE Expo LLC operates 56 Non-Core Events in Russia
ITE Group plc today announces the proposed disposal of ITE Expo
LLC ("ITE Expo"), the operating company for 56 of the Group's
Non-Core, regionally-focused, smaller events in Russia, to
Shtab-Expo LLC (the "Purchaser) (the "Transaction"). These events
comprise a significant proportion of the Group's Non-Core assets in
Russia. This disposal is a major step in delivering a key pillar of
the Group's Transformation and Growth (TAG) programme to focus on
must-attend International events by actively managing its
portfolio.
ITE retains 16 designated Core events in Russia, which have
international exhibitors and visitors, and these form part of a new
legal entity, ITE Expo International LLC. These Core Events include
market-leading brands like MosBuild, WorldFood Moscow, YugAgro and
MITT. The proposed disposal will enable management to focus on
those Core Events which have a greater potential to deliver
sustainable growth and value for Shareholders.
The 56 regional Non-Core Events in Russia, which are being
disposed of, include VacuumTech Expo, Stomatology St Petersburg,
UMIDS Krasnodar and Jewellery Salon Krasnodar. In the financial
year ended 30 September 2017, these Non-Core Events in Russia
generated revenues of approximately GBP12.0 million and contributed
operating profits of approximately GBP1.3 million. These Non-Core
Events in Russia comprised gross assets of approximately GBP14.3
million as at 30 September 2017.
The Group will receive consideration of RUB 640 million
(approximately GBP8 million) over the nine years following
completion of the Transaction together with additional variable
consideration of up to RUB 400 million (approximately GBP5 million)
based on the Target's incremental revenue growth during this
period. The terms of the Transaction incentivises the Purchaser to
make earlier payments to satisfy the consideration. If the
Purchaser has by 30 September 2023 paid consideration of RUB 520
million (approximately GBP6.5 million), exclusive of variable
consideration based on incremental revenue growth, this will
satisfy in full the Purchaser's obligation to pay the
consideration, including any future variable consideration.
The Directors intend to use the proceeds from this disposal for
general corporate and working capital purposes. Whilst the disposal
is expected to be marginally dilutive to earnings, management
expect the overall benefits of the TAG programme, and in particular
the focus on our core events in Russia, to exceed this short-term
dilution.
Mark Shashoua, CEO, ITE Group plc said:
"The proposed sale is a milestone in delivering a key pillar of
our Transformation and Growth Programme - to actively manage our
portfolio. These regional events had previously been separated into
a different business unit from the international Core business and
so this disposal will simplify operations significantly. By selling
this portfolio of smaller, lower-growth regional Russian events we
will be able to focus our time and investment on our
internationally-focused Core shows which have a much greater
potential to deliver sustainable growth."
The Purchaser is 99% owned by Mr Alexander Shtalenkov, General
Director of ITE Expo, with the remaining 1% of participatory
interests being held by his spouse. The Transaction is a related
party transaction for the purposes of the Listing Rules because Mr
Shtalenkov is the General Director of ITE Expo and is therefore a
related party of the Group. The Transaction, as a consequence is
conditional on shareholder approval.
Further details of the Transaction and a notice convening a
general meeting to approve the Transaction will be sent to ITE
shareholders in due course.
For further information please contact:
+44 (0) 20 7596
ITE 5000
Melissa McVeigh, Director of Communications
+44 (0) 20 7260
Numis Securities Limited 1000
Nick Westlake / Toby Adcock / Hugo Rubinstein
+44 (0) 20 3727
FTI Consulting 1000
Charles Palmer / Harry Staight
Notes
'Core Events' are defined as events that the Group believe are
of strategic importance to the Group's future, including the
Group's largest international events and those with the greatest
potential for growth.
'Non-Core Events' are defined as events which the Group believe
have less potential for growth.
ITE Expo International LLC consists of 16 Core international
Events as well as 22 Non-Core regional events based in Siberia.
About ITE Group plc
ITE Group plc was founded in 1991 and is now one of the world's
leading organisers of international exhibitions and
conferences.
ITE Group's strategic vision is to create the world's leading
portfolio of content-driven, must-attend events delivering an
outstanding experience and ROI for our customers. In May 2017 the
Group launched its Transformation & Growth (TAG) programme,
which is designed to transform the Company from a geographic-led
business to a product-led business that focuses on market-leading
events, wherever they are in the world. ITE strives to run the best
shows and offer the best service to its customers throughout the
world regardless of location. By putting exhibitors and visitors at
the heart of everything we do, we plan to drive sustainable growth
for our shareholders.
ITE Group plc is a public limited company and has been listed on
the main market of the London Stock Exchange since 1998.
Disclaimer:
This announcement contains forward-looking statements relating
to the business, financial performance and results of ITE and the
industry in which ITE operates. These statements may be identified
by words such as "expect", "believe", "estimate", "plan", "target",
or "forecast" and similar expressions, or by their context. These
statements are made on the basis of current knowledge and
assumptions and involve risks and uncertainties. Various factors
could cause actual future results, performance or events to differ
materially from those described in these statements and neither ITE
nor any other person accepts any responsibility for the accuracy of
the opinions expressed in this presentation or the underlying
assumptions. No obligation is assumed to update any forward-looking
statements.
Numis Securities Limited ("Numis") which is authorised and
regulated by the Financial Conduct Authority in the United Kingdom,
is acting solely for ITE in relation to the Transaction and nobody
else as a client in relation to the Transaction and will not be
responsible to anyone other than ITE for providing the protections
afforded to the clients of Numis or for providing advice in
relation to the Transaction.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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