EV/EBITDA (1 Year Forward) Trading Multiples – European Media Sub-Sectors

Media sector deal review Q1 2016

www.trilliumpartners.co.uk Information M&A – getting bigger?

• The global information industry has provided a constant stream of M&A activity over the last decade. 2015 was no exception and 2016, notwithstanding the global macro-economic uncertainty, looks set to continue this trend

• A few years ago, companies’ M&A strategies were more timid, with a focus on targeted bolt-ons in areas of sectoral strength. The last 18 months, on the other hand, has witnessed a significant uptick in larger deals, culminating in the recent announcement of two mega mergers: the $16bn tie up between IHS and Markit to create a “global leader in critical information, analytics and solutions” and the $23bn marriage of IMS and Quintiles. The following table highlights a number of the larger transactions that have announced in recent times:

Selected M&A transactions Target Acquiror Rank Date Target Media sub-sector Acquiror Value (m) country country 1 May 16 Quintiles US Information IMS Health US $23,000* 2 Mar 16 Markit UK Information I H S US $16,123*

Macmillan Science and Springer Science+Business 3 May 15 Germany Education UK € 5,000+ Education Media 4 Nov 15 Financial Times UK Information Nikkei Japan £825

5 Dec 15 PR Newswire US Information Cision US $841

6 May 16 Tribune Publishing US Information Gannett US $815** 7 Apr 16 Rizzoli Italy Information Cairo Italy € 681

8 Aug 15 The Economist UK Information Exor Italy $1,460

9 Oct 15 Local World UK Information Trinity Mirror UK £220

10 Apr 16 i UK Information Johnston Press UK £24

* Enterprise value based on the combined businesses ** Bid was rejected by Tribune bo ard o n 4/5/2016 So urce: P res s , Tho ms o n Reuters • There are a number of factors that are driving these larger transactions:

. Weak growth – given the relatively pedestrian outlook for economic growth around the world, companies see better opportunities for driving bottom-line expansion through deals that offer significant cost savings and enhanced cross-selling opportunities by combining product suites to serve a broader customer base. Both of the large mergers above attest to that

. Strategic refocus – a number of established larger/mid-sized groups have determined that they will do better by focusing on fewer product areas on a more global scale: Pearson’s “education first” plan led to the sale of the FT and its stake in The Economist; UBM bought Advanstar and then sold PR Newswire to sharpen its strategy on large-scale events and Macmillan decided that its Academic business would fit better inside Springer. The current sale of Thomson Reuters’ IP&S business further exemplifies this

. Consumer behaviour – our hunger for digitally-delivered information shows no sign of abating, much to the chagrin of the global newspaper industry. This has led to a wave of consolidation around the world, notably in the US and the UK, but also, more recently, in Italy as news groups pursue a twin strategy of cost reduction and digital reinvention. Trinity Mirror’s acquisition of Local World, Gannett’s current hostile offer for Tribune and Cairo’s offer for Rizzoli illustrate this well

. Valuation – the broader media sector is probably nearer to peak valuation than it has been for some years (as our chart at the end illustrates) which is driving business owners to “catch the wave” before the market turns. Moreover, larger B2B information businesses have generally done a very good job at transitioning to the digital world because their underlying content is so valued – this has made them harder to disintermediate/disrupt than consumer information businesses, and therefore enduringly valuable. The high multiples being attributed to Argus Media, a leading news and pricing provider in the energy and commodities markets that is being sold by the Nasmyth family, attest to this, notwithstanding the volatility in its underlying market

• Trillium has a long track record of advising corporates (both listed and private) and financial sponsors on mergers, acquisitions, disposals, joint ventures and minority investments, as well as accessing the private equity and debt markets to support acquisition and development strategies. Our sector focus includes Advertising & Marketing Services, Broadcasting & Content, Education & Training and Information & Events. We would be delighted to hear from you if you think we might be able to assist you

Global overview

Global Media M&A • Reported global Media M&A transaction value in Q1/2016 was around $140bn 700 $15bn, which represents N America Europe Asia ROW No. of deals a 6% increase over Q4/2015 $120bn 600

• Compared to Q1/2015, the $100.1bn $99.0bn $100bn 500 reported global Media M&A transaction value in Q1/2016 decreased by $80bn 400 46%

• The number of deals $60bn $57.0bn 300 announced this quarter (452) decreased by 17%

$40bn 200 over the last quarter $34.6bn $32.8bn $28.0bn $26.2bn $20.9bn $22.2bn $19.3bn $18.9bn$20.4bn $20bn 100 $14.3bn$15.1bn $12.5bn $8.2bn $9.9bn

$bn 0 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016

Source: Thomson One, Trillium analysis

European overview Q1/2016 – Top 20 European Media transactions • Reported transaction value in Q1/2016 was $636m, a decrease of 77% over the previous quarter Date Target Acquiror Rank Target name Media sub-sector Acquiror Value Status announced country country • This quarter also included: 1 Mar 16 National Media Group Russian Fed Broadcasting Gazprom-Media Russian Fed $163 m Completed – a number of notable 2 Jan 16 Dagbladet Borsen Denmark Publishing JP/Politikens Hus Denmark $117 m Pending Advertising & Mediengruppe RTL 3 Mar 16 Smartclip Germany Germany $53 m Pending Advertising & Marketing deals, Marketing Deutschland including the acquisition of 4 Feb 16 Amedia Norway Publishing Sparebankstiftelsen Norway $46 m Pending Independent Print i United United 5 Feb 16 Publishing Johnston Press $35 m Completed Smartclip by Mediengruppe Newspaper Kingdom Kingdom ($53m); the acquisition of 6 Feb 16 European Auto Trader Netherlands Publishing AutoScout24 Germany $30 m Completed Highlight Event & 7 Mar 16 Casta Diva Group Italy Audio Visual Blue Note Italy $29 m Pending Highlight Event & Advertising & Bernhard Burgener 8 Feb 16 Switzerland Switzerland $18 m Pending Entertainment by its Entertainment Marketing (CEO) Advertising & United 9 Feb 16 MCD Partners United States Lida $10 m Completed management ($18m); and the Marketing Kingdom United 10 Feb 16 ValidSoft UK Publishing Cross River Initiatives United States $13 m Pending acquisition of MCD Partners by Kingdom United Advertising & Next Fifteen United 11 Mar 16 Publitek $9 m Completed Lida, ($10m); Kingdom Marketing Commununication Kingdom United Advertising & 12 Mar 16 Claret Marketing Samlerhuset Group Netherlands $8 m Completed Kingdom Marketing Advertising & – 13 Jan 16 TimeOne France Ardian France $5 m Completed Further consolidation in the Marketing Publishing sector, including 14 Mar 16 Action press Germany Publishing Investor Group Germany $2 m Pending Advertising & Extend AM and the acquisition of Dagbladet 15 Jan 16 Eikeo France France $2 m Completed Marketing Sigma Gestion Infinity House United Motion Pictures / United Borsen by JP/Politikens Hus 16 Feb 16 Gate Ventures $1 m Pending Productions Kingdom Audio Visual Kingdom Advertising & ($117m) and the acquisition of 17 Mar 16 Friends Tactics Sweden Sweden Nordkom Sweden $1 m Completed Marketing Amedia by Sparebankstiftelsen 18 Mar 16 Slobodna Dalmacija Croatia Publishing Hanza Press Sweden $1 m Pending

Advertising & ($46m) 19 Mar 16 Triboo Media Italy First Capital Italy $2 m Completed Marketing Advertising & 20 Jan 16 Magnifico Poland Equimaxx United States $0 m Completed – Continued interest in digital Marketing assets Source: Thomson One, Trillium analysis. List includes only deals with disclosed transaction values

2| European Media M&A by sub-sector

• 165 deals were closed or European Media M&A by sub-sector announced in Europe, representing a 21% decrease

over the previous quarter $30bn 300 Publishing $27.9bn Cable Broadcasting • Advertising & Marketing Audio Visual Advertising & Marketing $25bn 250 was the most active sub- No. of deals sector with 67 deals

• The bulk of deal value (45%) $20bn 200 $18.1bn $17.7bn came from Publishing $17.1bn assets, 26% was derived from Broadcasting, 18% $15bn 150 came from Advertising & Marketing and 11% $11.5bn consisted of Audio Visual $10bn 100 $7.8bn deals $7.0bn $6.5bn $5.7bn $5.1bn $5bn 50 $3.5bn $3.8bn $2.8bn $2.4bn $2.3bn $2.0bn $0.6bn $bn 0 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016

Source: Thomson One, Trillium analysis

European Media M&A by acquiror type

EuropeanEuropean Media Media M&A M&A by by acquirer acquiror type type • PE activity fell significantly in Q1/2016, with the number of deals

$30bn 300 falling by over half

$27.9bn Trade (volume) • The transaction value of PE (volume) Trade (# of deals) trade deals was 71% lower $25bn 250 PE (# of deals) than the previous quarter, while transaction volume dropped by 16% to 160 $20bn 200 deals (190 in Q4/2015) $18.1bn $17.7bn $17.1bn

$15bn 150

$11.5bn $10bn 100 $7.8bn $7.0bn $6.5bn $5.7bn $5.1bn $5bn 50 $3.5bn $3.8bn $2.8bn $2.3bn $2.4bn $2.0bn $0.6bn

$bn 0 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016

Source: Thomson One, Trillium analysis. Note: M&A volume figures only include transactions with publicly disclosed values

3| Trading multiples – EV/EBITDA (1 year forward) Trading multiples – European Media sub-sectors

Broadcast (Radio)

B2B Information 14.0x Advertising & Marketing

Average

Broadcast (TV)

Publishing (Consumer) 12.0x

10.0x

8.0x EV/EBITDA

6.0x

4.0x

2.0x Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16

Source: Thomson One, Trillium analysis. Data as of 31st March, 2016

• The average forward EV/EBITDA multiple of our selected Media sub-sectors is 10.2x. Except for B2B Information and Publishing (Consumer), all sub-sectors have shown a decline in forward EV/EBITDA multiples

• The B2B Information (12.0x) and Broadcast (Radio) (12.3x) sub-sectors currently trade at a premium to the sector average

Notes re trading multiples: Enterprise Value (EV) defined as: Market Cap. + Net Debt (non-current liabilities + current liabilities excluding trade payables – cash) + Minority Interest + Preferred Stock Average multiples comprise the companies as follows: Broadcast (Radio): NRJ Group, UTV Media; Broadcast (TV): BSkyB, ITV, STV, Telenet Group; Advertising & Marketing: Havas, Huntsworth, M&C Saatchi, Next Fifteen, Publicis, WPP; Publishing (B2B): Ascential (multiple included from March 2016), Centaur Media, Euromoney, Informa, RelX, Tarsus, UBM, Wilmington; Publishing (Consumer): Daily Mail & General Trust, Future, Independent News & Media, Lagardere, Pearson, Schibsted, St Ives, Trinity Mirror

4| Contact information

If you would like further information, please contact:

Trillium Partners Limited 23 Berkeley Square London W1J 6HE

T +44 (0)20 3008 8375 F +44 (0)20 3008 4797

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