Merit Group sells MET Operations to Political Holdings for £4.5 million

Merit Group sells MET Operations to Political Holdings for £4.5 million

LONDON, UK: Merit Group plc (AIM: MRIT), the data and intelligence business, has agreed to sell the Media, Events and Training operations of its Dods Political Engagement business (MET Operations) to Political Holdings Limited, a private company owned by Lord Ashcroft KCMG PC, for a cash consideration of £4.5 million.

In the year ending 31 March 2022, the MET Operations generated revenue of £9.3 million and an adjusted EBITDA of approximately £0.5 million, with net assets of £0.5 million as at 31 March 2022.

Merit Group expects the Disposal to complete in the current calendar year. The disposal remains subject to the satisfaction of certain conditions, including satisfaction of financing by Political Holdings Limited.

Following completion the Group will use the net proceeds to pay down its net debt, which as at 30 September 2022 was £3.2 million, and to fund the growth plans of its ongoing business intelligence operations.

Following the Group’s change of name and new strategic focus announced in March 2021, and having conducted an internal review of its operations, the Board of Merit concluded earlier this year that the Group was overly diverse and complex given its market size and that it needed to focus its future strategy on its core data and intelligence offerings.

These core operations comprise; the market leading Dods Political Intelligence service with over 800 subscribers in the UK and Europe, which generated £6.9 million of subscription revenue in the last financial year; and the data and intelligence business of Merit Data & Technology which generated £10.7 million, the significant majority of which is recurring revenue.

The Board of Merit Group believes focussing on business intelligence will allow it to grow its core business operations and improve returns to shareholders.

Political Holdings Limited owns three companies in the media sector, focused on politics and government: Biteback Publishing (Britain’s leading political publisher), Campaigns & Elections (the non-partisan go-to resource for political campaign professionals in the USA and Mexico), and ConservativeHome (the UK’s premier independent conservative news and analysis site).

Merit believes that its MET Operations will benefit from the focus that will come from being part of a company specialising in media and events.

David Beck, CEO of Merit Group plc, said: “This is an important step for Merit. The Disposal will allow us to focus on the parts of the Group with recurring or subscription revenue, attractive margins and strong cash generation. Following the Disposal we will become fully focussed on the business intelligence sector.

“This transaction, together with the disposal of our minority stake in Social 360 announced in July, will mean we have raised £5m from the disposal of non-core assets. When set against our market capitalisation of approximately £8.5m these are obviously significant strategic developments.”

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