With a view to expanding their business information and trade show division into the United States, British group Informa Plc announced on Wednesday they were in final talks with U.S. info-services company Penton. The deal is thought to be worth over a billion dollars.
Sources close to Informa say the firm will set up a new debt and equity structure they hope will raise 800 million pounds in order to finance the deal. The money will go to equity outfits MidOcean Partners and Wasserstein & Co, who are currently handling Penton.
Informa has been desperate to grow its global exhibitions business and the current deal will give them much needed exposure in the U.S. where they want to earn approximately half their revenue. Business exhibitions and trade fairs are big earners in the U.S. with over 80 large scale shows per year.
“The next logical progression for our exhibition division is a move into the U.S. territory,” said Informa chief executive Stephen Carter in a Reuters TV interview. “Penton has been on our radar for a while due to the diversity of brands they are involved in. They match the fields we would like to pursue such as aviation, technology and telecoms.”
Two years ago Informa purchased U.S. exhibition operator Hanley Wood and took over many prominent global events such as World of Concrete, China Beauty Expo and Arab Health. The exhibition division of Informa, which also publishes market data, academic books and news, accounted for over 20 percent of the company’s revenue last year.
James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International commented on the deal, “Informa want to be more active in the U.S. as it is one of the most attractive areas with regard to accretive earnings. It’s a huge positive for them to be completing the deal so quickly and a great follow up to their Hanley Wood acquisition.”
Coleman said he expects the addition of Penton to increase earnings by at least 8 percent after the first full year. Shares for the company rose 5 percent to 710.2 in London’s early morning session.
Specialists in the field don’t expect Informa to stop there, and say we should expect to see more action from them in M&A in the very near future, going after potential targets such as Tarsus Group and UBM.
