Anatomy of a deal: Ascential

Background of the deal

In 2022, Ascential had two very distinct or three very distinct offerings. One was digital commerce, which was largely focused in the US, one, which was product design, and the other one an event led business.

Ascential's legal team tasked with handling the M&A included Director of Legal, Group Commercial Technology, Corporate and M&A Jenny Luckham, Corporate and Commercial Counsel Kester Carstens and Senior Corporate Counsel Patrick Carter, who came together to share their insights on how it was done. The three counsel sat within the group, legal team, handling all the M&A and all big technology work.

Initially, they were tasked with trying to sell off some of the smaller parts of the business to maximise value to the shareholders.

Ascential’s journey to to a sale began in 2022, when the company started the process of direct listing its digital commerce section in the US. Unusually, at the same time, the company was looking to perform an auction sale for part of its business known as WGSN. As if running these two processes wasn't enough, partway through the timeframe Ascential they received an offer for the digital commerce business - and ended up having to run these three deals at the same time until the Omnicom bid was confirmed as serious.

The outcome? Signing both deals at the same time, on the same day at the end of October, with a total value of 1.7 billion.

"It was a very intensive process," Jenny says. "We wouldn’t have been able to do it without the rest of the Ascential business. I was predominantly tasked with making sure the deal ran properly, making sure the timelines were hit, and the main main deal documents.

"We had to think of it with a lens of how is this going to be the most palatable to shareholders are going to try and vote this deal through.”

Jenny Luckham, Head of Corporate M&A, Ascential

How did they manage three deals at once?

With that much going on, you have to get timelines understood early. As a listed business, the main timeline driver was submitting the circular which a lot of information had to go into. With around five law firms handling different deals or different aspects of certain deals, the Ascential legal team needed to make sure they all understood what was going on.

“When we were drafting we had to think about how things affected certain items, especially around how liabilities were drafted in the deal documents, because the lens you are looking through is how can we make this the most palatable to shareholders who will be the ones to vote the deal through? We made sure our external advisers were very aware of that driver.”

Opening and maintaining those lines of communication with your external advisors on the timelines and issues involved prevents hiccups arising during the process.

"Being a listed business, the main one of the main timeline drivers was submitting the circular. As a class one deal, a lot of information had to go into that circular, and the drafting that was being put in the different documents had to be accurately reflected. That did affect how certain items especially around liabilities were drafted in the deal documents, because we had to think of it with a lens of how is this going to be the most palatable to shareholders are going to try and vote this deal through.” Making sure that the external advisors were very much aware of that driver was a priority.

"I would say that you can’t overcommunicate when it comes to timelines," Jenny says. "At the 11th hour our US counsel got the time zone slightly wrong, so they thought they had more time to submit our RNs! That was a particularly daunting moment, but we got it through and managed to stick to our timelines."

Scoping and scale: how not to be a bottleneck

To get an idea of the scale of the corporate and communications separation, Patrick explains that prior to the disposal there were 100+ entities, which following the disposal were reduced to around 30.

Something that helped them manage a project this big was that they had the luxury of time. They knew well ahead of time this was going to happen and so were able to do a thorough scoping to find out where everything was and what needed to be done.

In nine months time, the group would be separated into three distinct parts which all had to be able to exist as standalone businesses. This required a thorough scoping exercise to determine what needed to be done, and identify any issues, which the team undertook at the start of 2023.

"Examples of what we found as part of this, were that we found we had only had one Brazilian entity for two of the businesses, so only one of the buyers could get that entity. This meant we needed to stand up a new Brazilian entity to employ the employees for the other business.

The same thing had to be done with our US leases which were all assigned to one entity, so we had to move these in three separate ways. The challenge of doing all this was managing the scale while also trying to keep pace with the transactions and not get too far ahead.”

What to look out for in due diligence

Likewise Kester’s role was to ensure that disclosure and due diligence was done efficiently so it wouldn’t stand in the way of the process completing.

“For the auction process alone, we had between 60 and 70 NDAs to review,” she shares.

A way to make this easier was getting external counsel to prepare the NDAs and a crib sheet with common responses they had seen, and terms that would often be heavily negotiated so a standard response could be created. so that anyone could dip in and handle when necessary.

“The key challenge was to be as efficient as possible! Otherwise, you are standing in the way of the process completing.”

"Some things that came up that I would look out in future included making sure that key employees have their IP provisions in the right place, or the appropriate IP revisions in their contracts. I would also double check things like domain names too, as they can be a small blocker that you don't expect to the deal progressing!”

The team found utilising G Suite for collaborative work streamlines communication the most useful tool, especially thanks to its real-time updates available in Google Docs and Sheets. They persuaded their external lawyers to get google accounts to make sure they never missed live updates.

"We also loved the Q&A feature on DataCite as it made the response approval processes more efficient," Kester says.

Ascential's deal cheat sheet

Make sure you have the right tech or know how to use yours - Ascential used G-Suite and Datacite to help them with parts of the process and keep things running smoothly

Establish clear timelines early and maintain open communication with external advisors and key stakeholders

Proactively communicate internal reorganisation plans and timeline sensitivities to external advisors to prevent any hiccups

Appreciate your BAU team who keep the business running while your tying up all the M&A

Always keep what is best for shareholders and stakeholders at the back of your mind when you're drafting deal documents