iSentia shareholders vote in favour of Access Intelligence takeover
An overwhelming majority of iSentia shareholders today voted in favour of the scheme of arrangement under which Access Intelligence will acquire all of the iSentia shares that it does not already own.
In total 91.96% of the total number of votes cast were in favour of the acquisition. Access Intelligence shareholders voted in favour of the acquisition and capital raising on 12 July.
iSentia’s chairman, Doug Snedden, said: “The board is delighted that shareholders overwhelming supported the proposal from Access Intelligence. Combining Access and iSentia will create a global media monitoring business that will benefit from greater scale, a diverse and competitive product offering and greater geographic reach, bringing benefits to all clients”
iSentia’s chief executive, Ed Harrison, said: “We are looking forward to working directly with Access Intelligence’s senior executives to combine the businesses. We will continue to invest in our existing portfolio of products including the imminent launch of the new iSentia platform and completion of the move to real-time broadcast. Additionally, we will have their powerful social media platform, Pulsar, to offer clients and we believe there will be increased opportunities to develop new technologies.”
Access Intelligence chief executive, Joanna Arnold will relocate to Australia later this month. In the initial phase of the integration each business will operate independently with a team of Access Intelligence’s senior executives working directly with iSentia’s management team to combine the businesses.
On Friday, 20 August 2021, iSentia will seek orders from the Supreme Court of New South Wales for the approval of the scheme at the second court hearing. If the court approves the Scheme, iSentia proposes to lodge the court orders with the Australian Securities and Investments Commission so that the Scheme becomes legally effective.
It is expected that iSentia shares will be suspended from trading with effect from the closing of trading on the ASX on Wednesday, 25 August 2021. Shareholder entitlements will be determined Wednesday, 1 September 2021. The scheme is expected to be implemented and the two companies will be combined through a managed integration process.
iSentia also announced that on 16 July, the Supreme Court of New South Wales made orders approving the convening of a meeting of iSentia shareholders to consider and vote on the scheme (Scheme Meeting) and approving distribution of an explanatory statement which includes information about the scheme, the Independent Expert’s report and the notice convening the scheme meeting (together, the Scheme Booklet) to Isentia shareholders and mentioned that Access Intelligence will not be able to vote in the scheme meeting in respect of its shareholding.
The booklet mentioned that if the scheme does not proceed, shareholders will continue to be subject to the risks associated with iSentia’s business and general market risks such as a changing competitive landscape, industry conditions, continued competition in Australia and New Zealand which has affected customer retention and pricing, ongoing COVID-19 headwinds in iSentia’s Southeast Asian markets, the results of the Copyright Tribunal dispute, iSentia’s limited covenant headroom and business challenges faced by iSentia in FY21 rather than realising certain value for all of their iSentia shares through the Scheme.
The booklet cited: “The Scheme provides the opportunity to realise certain cash value for all of your investment in iSentia. If the Scheme does not proceed, the iSentia share price may fall, including to a price that is well below the value of the total cash consideration. If the Scheme does not proceed, it is likely that iSentia will need to raise equity capital to repay debt and fund working capital and ongoing investment in the business.
“Such a capital raising would be dilutive to shareholders who are ineligible or choose not to participate in the equity raising. Further, there can be no certainty that the capital raise will be successful nor to the price at which any capital raise will be undertaken which may be well below the value of the total cash consideration.
“iSentia revenue and underlying EBITDA (earnings before interest, taxes, depreciation, and amortisation) for the 12 months to 30 June 2021 is estimated to be $82 million to $84 million and $13.5 million to $14.5 million [respectively], (compared to $101.7 million and $25 million for the 12 months to 30 June 2020), based on management unaudited accounts. Net Debt is estimated to be $34 to $35 million ($23.4 million at 30 June 2020),” the booklet read.
iSentia’s financials were impacted in part by the cyber incident in October 2020 that had an approximately $3.3 million direct impact on revenue, and approximately $4.4 million direct impact on cash.
In addition, and as previously reported, the cyber incident resulted in a delay to key strategic projects which were aimed to reduce churn in the business and, as outlined in the 1H FY21 results presentation, has impacted FY21’s results when compared to expectations.
