Informa to buy Clarion for £2.24bn, separate academic business
Informa said on Tuesday that it had agreed to buy event and exhibition organiser Clarion from private equity firm Blackstone for £2.24bn, as it announced plans to separate its academic business, Taylor & Francis, to focus on the core B2B business.
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Informa said that following the acquisition, B2B Live Events will generate revenues of more than £4.2bn/$5.7bn across around 1,000 specialist B2B brands in more than 40 market categories and 30+ countries.
Established in 1947 and headquartered in the UK, Clarion has a portfolio of "high growth, high impact brands", Informa said. It owns and operates over 100 specialist B2B brands, "with leading positions across a range of international growth categories and deeply entrenched, long-standing customer relationships".
The deal values Clarion at 11.1x 2027 expected earinngs before interest, tax, depreciation and amortisation, or around 9x including the £50m run-rate cost synergies identified to date.
The company said it plans to raise gross proceeds of around £940m in an equity issue to part-fund the acquisition of Clarion, which is expected to complete towards the end of the fourth quarter.
Chief executive Stephen A. Carter said: "The planned separation of Taylor & Francis coincides with further expansion in B2B through the £2.24bn acquisition of Clarion, the UK-based owner of more than 100 B2B Live Event brands. The combination will underscore Informa as the UK-listed, international leader in B2B Live Events, with annual group revenues exceeding $6bn and underlying revenue growth of 7%.
"Today’s announcements mark the latest step in a growth strategy that has seen B2B revenues grow tenfold since 2014, whilst generating more than $3bn of value in Business Intelligence and lifting Taylor & Francis revenues fourfold since it joined the group."
At 0930 BST, the shares were up 3.9% at 895.40p.
Dan Coatsworth, head of markets at AJ Bell, said: "Informa is not alone in combining events with academic publishing, but its latest announcement suggests time is up on this arrangement.
"The events arm has benefited from a post-pandemic surge in demand, and management are looking to double down through the sizeable acquisition of rival Clarion and by spinning off its academic arm Taylor & Francis.
"The deal adds major events like the consumer electronics-focused IFA Berlin, gaming conference ICE in Barcelona and defence event DSEI to Informa’s roster. It is expected to accelerate growth and enhance earnings from next year.
"Informa has expanded the ways it makes money from events through initiatives like charging companies to set them up with buyers through AI-backed matchmaking apps, offering data insights, selling VIP experiences and taking a cut from local hotel bookings and logistics partners.
"While potentially less profitable and exciting, the publishing side is arguably more defensive and less exposed to fluctuations in the economy. In the future, that could mean Informa is more of a rollercoaster ride for shareholders.
"Although Covid felt like a once in a generation episode, it had a massive impact on the events world. Some investors may be nervous about Informa being exposed to the risk of in-person gatherings being disrupted in the future.
"For now, the market has taken the news positively, despite the dilution implied by a major fundraise, but will be keen for clarity on plans for the future of Taylor & Francis which have been promised alongside next year’s full-year results."