Vantiv and Worldpay in $10.4bn merger

BY Richard Summerfield

US credit card payment processing company Vantiv Inc has agreed to acquire its UK rival Worldpay in a deal worth $10.4bn, a move which will create a $29bn global payments giant.

Under the terms of the deal, Vantiv shareholders will own 57 percent of the newly combined group while Worldpay investors will hold the remaining 43 percent. Vantiv has offered 55 pence in cash, 0.0672 of a new Vantiv share, an interim dividend of 0.8 pence per Worldpay share and a special 4.2 pence dividend, for WorldPay.

The combined company will be led by Vantiv CEO Charles Drucker as executive chairman and co-CEO. Current Worldpay CEO Philip Jansen will be co-CEO of the joint group. Vantiv CFO Stephanie Ferris, will continue as CFO of the combined group. The board will consist of five Worldpay and eight Vantiv directors.

“Our combined company will have unparalleled scale, a comprehensive suite of solutions, and the worldwide reach to make us the payments industry global partner of choice," said Mr Drucker in a statement announcing the deal.

“The growth of e-commerce and the way consumers expect to transact is increasing complexity for businesses around the world,” Mr Jansen said, adding that the “combination of scale, innovation, technology and global presence will mean that we can offer more payment solutions to businesses, whether large or small, global or local".

Vantiv expects the deal to result in annual recurring pretax cost synergies of about $200m by the end of the third year following completion of the merger. It expects to incur one-off integration and restructuring costs of about $330m, most by the end of the second year.

The two firms initially announced their intention to merge in July, however given the scale and complexity of the deal, it has taken a number of weeks for management of both companies to reach an agreement on certain conditions, including guaranteeing a London listing for the newly merged company.

The deal is the latest in a number of mergers in the evolving payments processing industry. Consumer trends are changing, and as more people turn away from cash transactions and utilise smart devices and mobile payments in the future, the industry is likely to look very different in the coming years.

News: U.S. card firm Vantiv clinches $10 billion deal to buy Worldpay

ROI boosted by mature ethics & compliance programmes, new survey finds

BY Fraser Tennant

Companies with mature or advanced ethics & compliance training programmes achieve greater return on investment (ROI) as well as significant risk mitigation and culture change, according to a new survey by NAVEX Global.

In its ‘2017 Ethics & Compliance Training Benchmark Report’, NAVEX reveals that 48 percent of the 900 respondents surveyed (over half of whom were senior managers or directors) said their training programmes were maturing – meaning they have a basic plan for the year that covers risk and role-based topic assignments.

A further 10 percent of respondents said their programmes were advanced – meaning they have a sophisticated multiyear training plan that covers a variety of topics assigned to specific audiences based on need and risk profile that includes live and e-learning, short-form and long-form courses and a variety of engaging formats.

The report also found that larger companies were more likely to have mature or advanced programmes.

“More than half of our respondents classified their training programmes as at least mature and said they are better able to determine and then show the linkage between programme maturity and training objectives to executives,” said Ingrid Fredeen, NAVEX Global's vice president of online learning content and the author of the report. “Being able to sharpen the business case for training is important for compliance programmes hoping to secure more funding at this critical time, when a scandal or cyber attack can have swift and sweeping negative effects on an organisation and its brand.”

Additional report findings include: (i) companies define a culture of ethics and respect in various ways, with the two most common definitions highlighting a culture that creates a workplace that encourages people to speak openly and aligns with regulatory requirements; (ii) just 41 percent of respondents said they provide training on cyber security; and (iii) just 43 percent provide training on speaking up and reporting/anti-retaliation.

However, echoing previous year’s results, training at the highest levels continues to be a potential problem spot, with 36 percent of respondents stating their companies do not provide ethics and compliance training to their boards. A further 21 percent said they did not know whether they provided training.

Ms Freeden concluded: “People are thinking differently about the need for training programmes. Some companies could be wondering what is under a rock today that could go public tomorrow.”

Report: 2017 Ethics & Compliance Training Benchmark Report

Discovery Communications to acquire Scripps Networks Interactive for $14.6bn

BY Richard Summerfield

Consolidation and changing viewer trends are having a dramatic effect on the television industry, with landmark deals unveiled regularly. This week, it was announced that Discovery Communications and Scripps Networks Interactive are to merge in a cash and stock deal worth $14.6bn, or $90 per share. Discovery will be paying a 34 percent premium on Scripps stock price on 18 July, the day before news of a potential deal surfaced.

The transaction is expected to generate synergies of around $350m, according to a joint statement, and could include significant job cuts. Scripps shareholders will receive $63 a share in cash and $27 a share in Discovery’s Class C common stock, based on its 21 July closing price. Discovery will also assume Scripps' existing net debt of $2.7bn.

"This is an exciting new chapter for Discovery. Scripps is one of the best run media companies in the world with terrific assets, strong brands and popular talent and formats. Our business is about great storytelling, authentic characters and passionate super fans. We believe that by coming together with Scripps, we will create a stronger, more flexible and more dynamic media company with a global content engine that can be fully optimized and monetized across our combined networks, products and services in every country around the world," said David Zaslav, president and CEO of Discovery Communications.

"Through the passion and dedication of our incredible employees, and with the support of the Scripps family, we have built a lifestyle content company that touches the lives of consumers every single day," said Kenneth W. Lowe, chairman, president and CEO of Scripps Networks Interactive. "This agreement with Discovery presents an unmatched opportunity for Scripps to grow its leading lifestyle brands across the world and on new and emerging channels including short-form, direct-to-consumer and streaming platforms."

The deal is the latest move in an increasingly active television industry which is trying to come to terms with a new paradigm. TV ratings and advertising revenue are in decline, and as more consumers choose to ‘cut the cord’, turning to streaming services such as Netflix and Amazon Prime, companies are looking to secure content deals. Once the merger is complete, the company will offer 300,000 hours of content and enjoy a 20 percent share of ad-supported cable audiences in the US.

News: Discovery aims for content clout with Scripps Network bid

Ransomware among top threat vectors – report

BY Richard Summerfield

The cyber security landscape is increasingly fraught with danger. Attacks such as the ‘WannaCry’ cryptoworm, have been headline news in recent months. According to the Cyber Threatscape Report 2017, produced by iDefense, part of Accenture Security, there will be a continuation escalation of the high profile attacks seen in the first half of 2017. As such, companies must be prepared to take action.

“The first six months of 2017 have seen an evolution of ransomware producing more viral variants unleashed by potential state-sponsored actors and cybercriminals. Our findings confirm that a new bar has been set for cybersecurity teams across all industries to defend their assets in the coming months,” said Josh Ray, managing director at Accenture Security. “While the occurrence of new cyber attack methods is not going away, there are immediate actions companies can take to better protect themselves against malicious ransomware and reduce the impact of security breaches.”

According to the report, cyber criminals are rapidly expanding their capabilities, due to factors such as the proliferation of affordable, customisable and accessible tools and exploits. Attack vectors, such as distributed denial of service-for-hire services are likely to become much more widespread as cyber criminals, both individual and state-sponsored, look for new ways to disrupt the landscape.

The report suggests that to improve cyber defences, companies should consider adopting an email analytics platform in the cloud, as well as authentication tools and spam filters. They should also update and test cyber resilience plans, and impose administration rights restrictions on local workstations to further reduce the potential impact of cyber criminality.

The study also found that cyber criminals have begun to use alternative cryptocurrencies or adopt bitcoin laundering schemes to conceal transactions. Furthermore, the report notes that state-sponsored threat actors may continue to conduct espionage activities in response to military exercises and economic sanctions.

Ensuring that adequate business continuity planning is in place is an important step organisations should take as cyber criminals become more ambitious. This requires companies to be proactive. By taking action to protect themselves against cyber attack, companies can reduce the impact of any breaches they suffer.

Report: Cyber Threatscape Report 2017

Jimmy Choo sold for $1.2bn

BY Richard Summerfield

Luxury shoe manufacturer Jimmy Choo Plc has been sold to fashion brand Michael Kors in a deal worth $1.2bn, or $1.35bn including assumed net debt.

According to a statement announcing the deal, Jimmy Choo investors will receive 230 pence, or about $3, for each share held. The price represents a 36.5 percent premium to the company’s share price in April, before the company announced it was putting itself up for sale. The deal is expected to close in Q4 2017.

Though the company has retained many of its celebrity endorsements since it shot to fame in the late 1990s and early 2000s, it has struggled to retain its status in recent years. Furthermore, JAB Holding, the company which holds a 70 percent stake in Jimmy Choo, having acquired the brand for £500m, is moving out of the luxury fashion market and is exploring dealmaking opportunities in other industries, including the food and beverage sector. Jimmy Choo has only been publicly owned for a little over three years.

John D. Idol, chairman and chief executive of Michael Kors, said, “We are pleased to announce the acquisition of Jimmy Choo, an iconic brand with a rich history as a leading global luxury house. Jimmy Choo is known worldwide for its glamorous and fashion-forward footwear. The company is a leader in setting fashion trends. Its innovative designs and exceptional craftsmanship resonate with trendsetters globally. We believe that Jimmy Choo is poised for meaningful growth in the future and our company is committed to supporting the strong brand equity that Jimmy Choo has built over the last 20 years.”

Pierre Denis, chief executive of Jimmy Choo, said, “It is a privilege for our management team to lead Jimmy Choo and to preside over such an exciting period for our company. We are convinced that there is so much more that can be delivered in the years ahead. We look forward to working closely with the leadership and team at Michael Kors Holdings Limited to further develop our iconic brand. Our two companies share the same vision of style and trend leadership. Our luxury heritage is the foundation of Jimmy Choo and we will continue to bring our brand vision to consumers globally.”

News: Michael Kors to buy luxury shoemaker Jimmy Choo for $1.2 bln