Informa PLC on Wednesday agreed a £1.2 billion deal to buy Ascential PLC and unveiled half-year results which showed higher sales, although profit fell.
Informa, the London-based business information publisher and events organiser, said the cash deal values each Ascential share at 568 pence.
This values Cannes Lions operator Ascential at £1.2 billion on a fully diluted basis, Informa noted.
Shares in Ascential, which revealed the approach from Informa after Tuesday’s market close in London, rose 26% to 564.00 pence in London on Wednesday.
Informa shares, meanwhile, rose 2.5% to 868.00p each.
Informa expects significant revenue opportunities to arise from the combination, including cross selling and expansion into fast growth economies where Informa has an established position.
Informa also expects around £12 million of annual cost savings and efficiency improvements by combining Ascential into Informa’s operating platform.
The addition of Ascential is expected to deliver 5% plus accretion to adjusted earnings per share in the first full year of ownership, Informa added.
The deal is expected to deliver a post-tax return on invested capital in excess of Informa’s long-term cost of capital within 2 to 3 full financial years post completion, Informa noted.
‘Informa is in the business of creating, nurturing and growing world class B2B brands. Lions and Money20/20 are outstanding examples of such brands. Combined, we can expand them into more sectors, accelerate growth and take advantage of new opportunities,’ Informa Chief Executive Stephen Carter said.
For its part, Ascential Chief Executive Philip Thomas said the deal would ‘not only deliver substantial value for our shareholders but also...unlock further growth opportunities for our brands.’
Informa also said revenue in the first half of 2024 totalled £1.70 billion, a rise of 12% year-on-year from £1.52 billion. Pretax profit declined by a quarter, however, to £237.4 million from £314.6 million.
The rise in revenue reflected further strong growth in its business to business markets businesses and accelerating growth in academic markets, the company noted.
Informa reported it was seeing momentum and growth in all of its divisions.
Reflecting the first half growth, the company upgraded revenue guidance. It now expects revenue for 2024 to be above its previously stated guidance range of £3.45 billion to £3.50 billion. Revenue in 2023 totalled £3.19 billion.
Informa upped its interim dividend by 10% to 6.4 pence per share from 5.8p the year before.
The company also said it was reviewing its portfolio of retained minority investments to determine the ‘best route to unlock value from these interests’.
‘This follows strong operating performances and expressions of interest from third parties,’ it noted.
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