Company Announcements

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

For immediate release

23 December 2020

Kin and Carta plc

Acquisition of Cascade Data Labs

Following the announcement on 17 December of the disposal of  its non-core agency Hive for £13.8 million, Kin and Carta plc (the "Company" or "Kin and Carta"), the international digital transformation ("DX") company, announces the acquisition of Cascade Data Labs, LLC ("Cascade"), a Portland, Oregon-based data transformation consultancy (the "Acquisition").

Cascade offers end-to-end data transformation expertise across all of the interrelated disciplines required to drive business value, including data integration, data governance, data engineering, data science and data visualisation. Cascade has extensive experience delivering value across numerous industry segments and helping some of the world's most premier brands execute their highest-profile data transformation initiatives.

The Acquisition supports the expansion of Kin and Carta's data capabilities which are a fast growing part of the Kin and Carta DX proposition. Earlier this month Kin and Carta appointed Silicon Valley data veteran Cameron Turner as Vice President of Data Science. Cascade's founders, Josh Levin and Greg Holiat, will take on leadership roles alongside Cameron in Kin and Carta's data transformation practice. This Acquisition also supports Kin and Carta's further regional expansion into the US Pacific Northwest.

The initial consideration for the Acquisition is US$6.9 million payable in cash at completion (subject to customary adjustments) with a further US$2.2 million payable in June 2021 contingent upon performance, of which up to 75% may be paid in Kin and Carta shares at the Company's discretion. There is a further deferred element to the consideration contingent upon adjusted EBITDA performance over the two years ending 30 September 2022, to be settled over a four year period in cash or up to 75% in Kin and Carta shares also at the Company's discretion. The total consideration is capped at $29.7 million*, corresponding to a significantly earnings-accretive performance. Cascade is a fast growing, profitable firm with net revenue of US$5.7 million and profit before tax of US$2.1 million in the 12 months to 30 September 2020, and gross assets of US$6.6 million at 30 September 2020. The Acquisition is expected to be immediately earnings accretive. Completion of the Acquisition is subject to settlement of the consideration due, which is expected to take place by 24  December.

In the results announcement of 5 November, for the year ended 31 July 2020, the Company stated that pipeline activity had improved and that clients were either restarting projects they had delayed or were commissioning new ones. The Company also announced a number of new client wins. Since that announcement, the Company has continued to win revenue from new and existing clients in both the US and Europe as expected.

J Schwan, CEO, said:

"The acquisition of Cascade Data Labs will supercharge our existing data transformation capabilities, while expanding our US presence further westward. An enhanced data offering will appeal to both existing and new clients. I look forward to providing further details about our progress in this high growth area of the digital transformation industry."

*At recent FX rate of 1.35. Cap is set in GBP at £22.3 million

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Important notices

This announcement contains inside information and is issued on behalf of the Company by Daniel Fattal, Company Secretary.

Cautionary statement regarding forward-looking statements

This Announcement may contain "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning.  By their nature, all forward-looking statements involve risk and uncertainty because they are based on numerous assumptions regarding the Company's present and future business strategies, relate to future events and depend on circumstances which are or may be beyond the control of the Company which could cause actual results or trends to differ materially from those made in or suggested by the forward-looking statements in this Announcement, including, but not limited to, domestic and global economic business conditions; market-related risks such as fluctuations in interest rates; the policies and actions of governmental and regulatory authorities; the effect of competition, inflation and deflation; the effect of legislative, fiscal, tax and regulatory developments in the jurisdictions in which the Company and its respective affiliates operate; the effect of volatility in the equity, capital and credit markets on profitability and ability to access capital and credit; a decline in credit ratings of the Company; the effect of operational and integration risks; an unexpected decline in sales for the Company; inability to realise anticipated synergies; any limitations of internal financial reporting controls; and the loss of key personnel.  Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made.  Save as required by the Market Abuse Regulation, the Disclosure Guidance and Transparency Rules, the Listing Rules or by law, the Company undertakes no obligation to update these forward-looking statements and will not publicly release any revisions it may make to these forward-looking statements that may occur due to any change in its expectations or to reflect events or circumstances after the date of this Announcement.