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Highlights
- Future shares rallied more than 7%, hitting a fresh 52-week high on Monday
- Media firm has acquired Dennis for a cash consideration of £300m
- Notable titles under Dennis include The Week, Kiplinger and MoneyWeek etc
Shares of Future Plc (LON:FUTR) rallied more than 7%, hitting a fresh 52-week high, on Monday, 16 August, after the Bath-headquartered diversified media company acquired Dennis for a cash consideration of £300 million.
The said acquisition of the consumer media subscriptions business has been done through the existing debt facilities availed by the Future Group.
With the addition of Dennis’ media subscription business portfolio with Future, the earnings of the latter are highly likely to enhance in the upcoming quarters following the successful completion of the deal. Some of the notable titles under Dennis include The Week, Kiplinger and MoneyWeek etc.
Following the development, the stock of Future rose as much as 7.65% to GBX 3,968 from the previous closing price of GBX 3,686 per share. Future shares have been on a rising run in the present calendar year, with the stock more than doubling the shareholders’ wealth in the last eight-and-a-half months.
Future shares (1-year performance)
Image Source: EODHD/Others
Interestingly, the stock of Future has nearly returned 400% from the multi-year lows realised during the Covid-led market crash.
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The acquisition of Dennis by Future is expected to fuel the business further in the forthcoming quarters as the group have captured multiple prominent titles including The Week UK/The Week US, MoneyWeek, IT Pro, PC Pro, Kiplinger, Science & Nature, Computer Active, Minecraft World, and Coach, alongside The Week Junior UK/The Week Junior US.
The Vendors have decided to retain four titles including Cyclist, Fortean Times, Expert Reviews and Viz.
Dennis reported a 12% growth in the revenue for the financial year ended 31 December 2020, with the adjusted EBITDA rising 14%. The gross assets at the end of 30 June 2021 stood at £210m. Also, the business has reported a rise of 16% in the trailing twelve months (TTM) to June 2021.
With the anticipation of a considerable revenue, as well as business growth for Future in the first full year of ownership, the share prices are likely to hit newer record highs in the near future.
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According to the agreement between Future and Dennis, the Vendors -- Exponent Private Equity LLP -- will be paying a minimum of £8 million and a maximum of £10 million within 12 months of completion of the deal.
Future Group increased the debt capacity to £600 million in July 2021 through an extend and amend exercise under which the company took a £200 million term loan and a three-year revolving credit facility to the tune of £400 million. The repayment of the term loan will start in March 2022 and is scheduled to terminate in June 2023.
