Interxion announces 2014 preliminary
unaudited results
Interxion Holding N.V. (“Interxion”) today announces that it has
reached a non-binding agreement on an all-share merger with
TelecityGroup plc (“TelecityGroup”). The proposed transaction would
be structured as an offer by TelecityGroup for Interxion and the
primary listing for the combined group would be in London, where
TelecityGroup’s shares are admitted to trade on the London Stock
Exchange (LSE: TCY); with a New York Stock Exchange listing for
TelecityGroup’s existing ADR programme contemplated.
TelecityGroup, headquartered in the United Kingdom, is a
provider of data centres, operating highly connected facilities in
key European cities.
The boards of Interxion and TelecityGroup believe the
combination of TelecityGroup and Interxion businesses is highly
compelling. Demand for data centre services is evolving rapidly as
enterprise data and digital applications migrate to the cloud. The
combined business will allow the parties to provide customers with
greater product choice and solutions for the dynamic and expanding
needs of multi-faceted customers seeking to address global markets.
The additional scale and scope of the combined operations will give
customers an expanded product set, more robust connectivity
choices, better landing points for access to European consumers and
expanded gateways to new markets in Africa, Asia and Eastern
Europe.
Further, the key benefits of the proposed combination would
include:
- Enhanced complementary customer
offerings using the best practices of TelecityGroup and Interxion
which, coupled with the expanded geographical footprint of the
combined group, will give customers access to the combined
portfolio of services across Europe;
- Significant synergy potential.
Incremental EBITDA from cost synergies and enhanced growth
opportunities are estimated by TelecityGroup to be approximately
£40m per year and capital expenditure synergies are estimated by
TelecityGroup to have a net present value of approximately £300m.
In total, this equates to a net present value of total synergies of
approximately £600m. In addition, TelecityGroup would expect
substantial incremental benefits from technology, capital
productivity and commercial synergies, as well as tax and other
financial synergies; and
- Enhanced access to the capital markets
and the opportunity of a lower cost of capital. Combined balance
sheet strength and capital allocation discipline would enable the
combined group to capitalise on future growth opportunities as well
as deliver predictable capital returns to shareholders.
Under the terms of the non-binding agreement, Interxion
shareholders would receive 2.3386 new TelecityGroup shares per
Interxion share. As a result, Interxion shareholders would own
approximately 45%, and TelecityGroup shareholders approximately
55%, of the combined group. The primary listing for the combined
group would be in London with a New York Stock Exchange listing for
TelecityGroup’s existing ADR programme contemplated.
John Hughes would be Chairman of the combined group, with John
Baker as Deputy Chairman. David Ruberg would be appointed Chief
Executive Officer of the combined group for a period of 12 months
following completion of the transaction. He would lead the new,
combined group and launch this exciting new phase for both
TelecityGroup and Interxion. Eric Hageman would be appointed Chief
Financial Officer. The board of the combined group would comprise a
balance of independent non-executive directors from both
TelecityGroup and Interxion.
Interxion Chairman John Baker said: “I believe that the
combination of InterXion and Telecity represents an attractive
value creation opportunity for our shareholders, with improved
access to capital markets, reduced cost of capital and a strong
balance sheet.”
Interxion CEO David Ruberg said: “Bringing together the assets
and solutions offered by Interxion and Telecity will improve our
customers’ ability to realize the benefits of transitioning to the
cloud. Together, we expect to be able to further reduce our
customers’ total cost of operation, help them deliver improved
functionality to their customers, and deliver industry leading
quality of service.”
TelecityGroup Executive Chairman John Hughes said: “We think
that the combination of TelecityGroup and Interxion would represent
an extremely compelling combination for all stakeholders of both
companies. The transaction would truly transform both organisations
and allow them to deliver a superior proposition to the joint
customer base. In particular, we would like to thank David Ruberg
for his key contribution in orchestrating this proposed transaction
and we are delighted that he has agreed to launch the new combined
group.”
Signing of a binding transaction agreement is subject to,
amongst other things, satisfactory completion of mutual due
diligence, approval by the Interxion and TelecityGroup’s boards of
directors and the negotiation of definitive transaction
documentation. Interxion and TelecityGroup have agreed not to
solicit or discuss alternative proposals until 4 March 2015 by
which time it is expected that a binding transaction agreement will
be entered into. Completion is anticipated in the second half of
2015, subject to Interxion and TelecityGroup shareholder approvals
and all relevant regulatory and antitrust approvals.
There can be no certainty that a binding agreement will be
reached, nor as to the terms of such agreement.
Preliminary and Unaudited Financial Highlights
Interxion also announced certain unaudited financial information
today for the three months and year ended 31 December 2014.
- Revenue for the fourth quarter and full
year is expected to have increased by 15% and 11% to approximately
€89.9 million and €340.6 million, respectively (4Q 2013: €78.2
million; FY 2013: €307.1 million)
- Adjusted EBITDA for the fourth quarter
and full year is expected to have increased by 14% and 11% to
approximately €38.7 million and €146.4 million, respectively (4Q
2013: €33.8 million; FY 2013: €131.8 million)
- Adjusted EBITDA margin for the fourth
quarter and full year are expected to be approximately 43% and 43%,
respectively (4Q 2013: 43.2%; FY 2013: 42.9%)
- Capital Expenditures, including
intangible asset, are expected to total approximately €47.5 million
in the fourth quarter and €216.0 million in the full year 2014
The foregoing information is based on preliminary results and is
not intended to be a comprehensive statement of our financial or
operational results for the three months ended and year ended 31
December 2014. This information has been prepared by and is the
responsibility of management. The company’s external auditors have
not audited, reviewed, compiled or performed any procedures with
respect to this preliminary financial data. Accordingly, the
company’s external auditors do not express an opinion or any other
form of assurance with respect thereto. The preliminary results
discussed above are derived from our management accounts, rather
than our consolidated interim and full year financial statements
which will be prepared in accordance with International Financial
Reporting Standards. Our preliminary results are based on a number
of assumptions that are subject to inherent uncertainties and
subject to change. In addition, while we believe these assumptions
to be reasonable, over the course of the next several weeks we will
be completing our financial statements as of and for the three
months ended and year ended 31 December 2014. Accordingly, our
actual results may vary from our preliminary results above, and
these variations could be material. As such, you should not place
undue reliance on the preliminary results information set forth
above.
Conference Call to Discuss Results
Interxion will release its fourth quarter and full year 2014
results on Wednesday, 4 March 2015, and will host a conference call
at 8:30 a.m. ET (1:30 pm GMT, 2:30 pm CET) to discuss the
results.
To participate on this call, U.S. callers may dial toll free
1-866-966-9439; callers outside the U.S. may dial direct +44 (0)
1452 555 566. The conference ID for this call is ‘INXN.’ This event
also will be webcast live over the Internet in listen-only mode at
investors.interxion.com.
A replay of this call will be available shortly after the call
concludes and will be available until 11 March 2015. To access the
replay, U.S. callers may dial toll free 1-866-247-4222; callers
outside the U.S. may dial direct +44 (0) 1452 550 000. The replay
access number is 65645801.
Perella Weinberg Partners LP which is a registered broker dealer
with the U.S. Securities and Exchange Commission, is acting for
Interxion and no one else in connection with the transaction and
will not be responsible to anyone other than Interxion for giving
advice in connection with the transaction or any matter referred to
herein.
A copy of this announcement is also available, subject to
certain restrictions relating to persons resident in restricted
jurisdictions, on Interxion’s website at www.interxion.com. The
content of the website referred to in this announcement is not
incorporated into and does not form part of this announcement.
Sources and Bases
Information contained within this announcement has been
calculated on the basis of the following:
- TelecityGroup basic number of shares of
202.9m and fully diluted number of shares of 204.6m
- Interxion basic number of share of
69.3m and fully diluted number of shares of 70.9m
- The exchange ratio of 2.3386 new
TelecityGroup shares per Interxion share implies a 15% premium to
the undisturbed Interxion share price of $26.47 per Interxion share
(as at close of business on 9 February 2015)
Notes to editors
Interxion (NYSE: INXN) is a provider of data centre services in
Europe, serving a wide range of customers through 39 data centres
in 11 European countries. Interxion’s data centres offer customers
extensive security and uptime for their mission-critical
applications. With over 500 connectivity providers, 400 cloud
providers and 20 European Internet exchanges across its footprint,
Interxion has created connectivity, cloud, content and finance hubs
that foster growing customer communities of interest. For more
information, please visit www.interxion.com.
TelecityGroup is a provider of data centres in Europe, operating
highly connected facilities in key cities. TelecityGroup plc is
listed on the London Stock Exchange (LSE: TCY).
www.telecitygroup.com
Forward-looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties. Actual results may differ
materially from expectations discussed in such forward-looking
statements. Factors that might cause such differences include, but
are not limited to, the difficulty of reducing operating expenses
in the short term, inability to utilise the capacity of newly
planned data centres and data centre expansions, significant
competition, the cost and supply of electrical power, data centre
industry over-capacity, performance under service-level agreements,
and other risks described from time to time in Interxion's filings
with the Securities and Exchange Commission. In addition, the
negotiations for the business combination may not advance, and even
if they do, it may not be possible to enter into definitive
documentation on satisfactory terms and close the agreement.
Interxion does not assume any obligation to update the
forward-looking information contained in this press release.
Use of Non-IFRS Information
EBITDA is defined as operating profit plus depreciation,
amortisation and impairment of assets. We define Adjusted EBITDA as
EBITDA adjusted to exclude share-based payments, increase/decrease
in provision for onerous lease contracts, transaction expenses and
income from sub-leases on unused data centre sites. Adjusted EBITDA
margin is defined as Adjusted EBITDA as a percentage of revenue. We
present EBITDA, Adjusted EBITDA and Adjusted EBITDA margin as
additional information because we understand that they are measures
used by certain investors and because they are used in our
financial covenants in our €100 million revolving facility and €475
million 6.00% Senior Secured Notes due 2020. A reconciliation from
Operating profit to EBITDA and EBITDA to Adjusted EBITDA is
provided elsewhere in this press release.
Other companies, however, may present EBITDA, Adjusted EBITDA
and Adjusted EBITDA margin differently than we do. EBITDA, Adjusted
EBITDA and Adjusted EBITDA margin are not measures of financial
performance under IFRS and should not be considered as an
alternative to operating profit or as a measure of liquidity or an
alternative to net income as indicators of our operating
performance or any other measure of performance derived in
accordance with IFRS.
Interxion does not provide forward-looking estimates of Net
profit, Operating profit, depreciation, amortisation, and
impairments, share-based payments, or increase/decrease in
provision for onerous lease contracts, and income from sub-leases
on unused data centre sites, which it uses to reconcile to Adjusted
EBITDA. Interxion is, therefore, unable to provide forward-looking
reconciling information for Adjusted EBITDA.
Important information
This announcement is for informational purposes only and is not
intended to, and does not, constitute or form part of an offer to
sell or the solicitation of an offer to buy or subscribe to any
securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
The release, publication or distribution of this announcement in
certain jurisdictions may be restricted by law and therefore
persons in such jurisdictions into which this announcement is
released, published or distributed should inform themselves about
and observe such restrictions.
INTERXION HOLDING N.V.
ADJUSTED EBITDA RECONCILIATION
(in €’000 – except where stated
otherwise)
(unaudited)
€ millions
Three Months Ended(1) Year
Ended(1)
31 Dec2014
31 Dec2013
31 Dec2014
31 Dec2013
Unaudited Unaudited
Reconciliation to
Adjusted EBITDA(2)
Operating profit 18.8 19.0 78.4
70.4 Depreciation, amortisation and impairments 17.3 13.5
62.2 57.7
EBITDA 36.2 32.5 140.6
128.0 Share based payments 2.3 1.3 6.6 4.1
Increase/(decrease) in provision for onerous lease contracts - -
(0.8) - Transaction expenses 0.3 - 0.3 - Income from sub-leases on
unused data centre sites (0.1) - (0.3) (0.3)
Adjusted EBITDA
38.7 33.8 146.4 131.8
Adjusted EBITDA Margin 43% 43.2% 43%
42.9%
_________________
(1) Figures for the three months
and year ended 31 December 2014 are approximate and
unaudited.
(2) Amounts in the table have
been rounded and accordingly may not add up to 100%.
InterxionJim Huseby, +1-813-644-9399IR@interxion.comorPerella
Weinberg Partners LPScott Bruckner, +44.20.7268.2800 or
+1.212.287.3200orPaulo Pereira, +44.20.7268.2800 or
+1.212.287.3200orRiccardo Benedetti, +44.20.7268.2800 or
+1.212.287.3200
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