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Tarsus Group Plc - Recommneded Cash Acquisition of Tarsus Group Plc

Under the terms of the Acquisition, Scheme Shareholders will be entitled to receive:

for each Scheme Share                       425 pence in cash

·          In addition to the consideration payable in connection with the Acquisition, Tarsus Shareholders will also be entitled to receive the payment of a final dividend by Tarsus of 7.7 pence for each Tarsus Share for the twelve month period ended 31 December 2018, subject to approval of the Pre-Close Dividend by Tarsus Shareholders at Tarsus's annual general meeting on 19 June 2019.

·          The terms of the Acquisition:

·          excluding the Pre-Close Dividend, represent a premium of approximately 36.2 per cent. to the Closing Price of 312 pence for each Tarsus Share on 23 May 2019 (being the last Business Day before commencement of the Offer Period); and

·          including the Pre-Close Dividend, represent a premium of approximately:

·          42.7 per cent. to the volume-weighted average price of 303 pence for each Tarsus Share for the three month period ended 23 May 2019; and

·          50.0 per cent. to the volume-weighted average price of 289 pence for each Tarsus Share for the twelve month period ended 23 May 2019.

·          The terms of the Acquisition (including the Pre-Close Dividend) value the entire issued and to be issued ordinary share capital of Tarsus at approximately £561 million. In addition, the terms of the Acquisition imply an enterprise value of £668 million and a multiple of approximately 17 times average EBITDA for Tarsus's financial years ended 31 December 2017 and 31 December 2018.

·          Charterhouse is one of the longest established private equity firms operating in Europe. Charterhouse typically invests in companies headquartered in Western Europe and works closely with incumbent management teams, providing them with active support to drive growth. Charterhouse pursues a highly selective investment approach, partnering with a small number of high-quality companies. Charterhouse is based in London and is a partnership of highly experienced investment professionals. Since the early 1980s, Charterhouse funds have completed over 140 transactions with an aggregate value in excess of €50 billion.

·          Tarsus is an international business-to-business media group with interests in exhibitions, publishing and online media.  Tarsus operates globally in the United States and the Americas, China, South East Asia, the Middle East and North Africa, Turkey and Europe, in key verticals including aviation, medical, labels and packaging, travel, housewares and automotive. Tarsus runs more than 160 events with a number of flagship brands including Labelexpo, Connect and the Dubai Airshow, among others. Tarsus operates across a worldwide network of offices in Dublin, London, Jakarta, Milwaukee, Atlanta, Boca Raton (Florida), Dubai, Shanghai and Istanbul.

Strategic rationale

·          Bidco believes that the global exhibitions market is an attractive sector with strong growth drivers, margins and cash generation. Bidco believes that, with its portfolio of market-leading brands and "must attend" business-to-business events, Tarsus is very well-positioned for growth. Tarsus's events and brands cover a diverse range of industries and sectors, and the Tarsus Group has significant exposure to the world's largest exhibition markets, the United States and China, and fast-growing emerging markets such as Mexico and South East Asia. Bidco believes that Tarsus's business model benefits from high revenue visibility due to strong exhibitor re-booking rates and that there are opportunities for continued organic growth from the existing portfolio through event replications and increasing buyer attendance.

·          The global exhibitions market remains highly fragmented and offers significant opportunities for consolidation. Tarsus has a track record of successfully integrating strategic acquisitions and there are further potential opportunities available to Tarsus, which will require continued investment in the business. Bidco intends to leverage its ability to access capital so as to accelerate Tarsus's "Quickening the Pace 2" strategy and pursue strategic acquisitions in selected high-growth geographies and industries.

Tarsus recommendation

·          The Independent Tarsus Directors, who have been so advised by Deutsche Bank as to the financial terms of the Acquisition, each consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Independent Tarsus Directors, Deutsche Bank has taken into account the commercial assessments of the Independent Tarsus Directors. Deutsche Bank is providing independent financial advice to the Independent Tarsus Directors for the purposes of Rule 3 of the Code.

·          Accordingly, the Independent Tarsus Directors intend to recommend unanimously that Tarsus Shareholders vote (or procure the voting) in favour of the Scheme at the Court Meeting and in favour of the Resolutions to be proposed at the General Meeting (or, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept or procure acceptance of the Takeover Offer), as the Independent Tarsus Directors who are interested in Tarsus Shares have irrevocably undertaken to do in respect of their own beneficial holdings of 9,511,714 Tarsus Shares representing, in aggregate, approximately 7.7 per cent. of the issued ordinary share capital of Tarsus on the Last Practicable Date.