REG - Informa PLC - Acquisition of Tarsus

InformaAnnouncement

09/03/2023 07:00

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RNS Number : 3692S  Informa PLC  09 March 2023

 

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 Informa LEI: 5493006VM2LKUPSEDU20

Informa PLC Press Release

9 March 2023

Informa further strengthens leadership in B2B market through acquisition of
Tarsus

Combination enhances InformaÕs presence in growing regions and markets

Informa (LSE: INF.L), the international Academic Markets, B2B Markets and
Digital Services Group today announced the acquisition of B2B Events group,
Tarsus for $940M.

 Stephen A. Carter, Group Chief Executive, Informa, said:

 ÓWe have long admired the Tarsus business which, like Informa, has been built
 around major brands in attractive, specialist B2B markets in the growing
 regions of Asia, China, the Middle East and the Americas.Ó

 Douglas Emslie, Chief Executive, Tarsus added:

 ÓI am extremely proud of the Tarsus business, our people and our customers. I
 could not think of a better partner than Informa to lead our brands and
 colleagues through the next phase of growth and expansion.Ó

Key Highlights

á      Addition of Tarsus...The combination of Tarsus with InformaÕs Live
and On-Demand Events portfolio brings together market-leading brands,
exceptional talent and deep customer relationships in a range of attractive
B2B markets;

á      Highly complementary portfolios... Strong commercial, operational
and cultural fit between the two businesses, creating reach and depth in Asia,
China, the Middle East and the Americas;

á      Depth in growing B2B markets...Strong portfolio alignment in
Healthcare (Health Connect Partners), Beauty & Aesthetics (A4M, LiVDerm),
Packaging (Labelexpo), Infrastructure (Intertraffic), Aviation (Dubai
Airshow), Fashion (SIUF, OFFPRICE) and Sustainability (Intersolar, Mexico
WindPower).

á      The Combination Programme...Integration will minimize disruption
and maximise delivery in 2023, a key year of growth and acceleration for Live
B2B Events; Annualised combination benefits of c.$20m through efficiencies in
procurement, real estate, technology, event contracts and other areas;

á      Growth acceleration...Combination expected to create incremental
revenue opportunities through the cross-marketing of major brands, digital
expansion and new event launches;

á      First Party Data...InformaÕs first party data engine, IIRIS (15m+
KEMA) to directly benefit from Tarsus c.515k attendees, 8,350+ exhibitors and
estimated Known Engaged, Marketable Audience (KEMA) of c.1.4m across its top
ten exhibition brands;

á      Strong financial returns...Initial enterprise value of $940M
implies post-synergy multiple of c.9.9x EV/EBITDA in 2023/24 and sub-9x in
2024/25 (averaging years to remove biennial effect), delivering significant
earnings accretion and post-tax return on capital;

á      Efficient funding mix...Consideration financed in cash and $210m of
Informa equity, based on 30-day average share price but forward valued by the
Seller at 850p, and subject to a two-year lock-up. Additional earn-up of $45m
payable if and when InformaÕs share price reaches 850p within the two-year
period;

á      Ongoing balance sheet strength...Pro-forma leverage c.1x net debt /
EBITDA at completion, providing flexibility for organic investment,
shareholder returns and targeted expansion.

 

Acquisition of B2B Events Group Tarsus

Informa has reached agreement with Charterhouse Capital Partners and other
shareholders (Òthe SellersÓ) to acquire Tarsus, the leading international
B2B group, for an initial enterprise value of $940m.

The Informa Board believes the combination is both commercially and
financially compelling, with strong portfolio alignment that will deliver
enhanced value for customers, additional opportunities for colleagues and
attractive returns for shareholders.

Robert Leeming, Partner at Charterhouse, said:

ÓWe are proud to have supported TarsusÕ development since 2019 and are
confident that Informa is exceptionally well placed to deliver the next stage
of the companyÕs growth strategy. We look forward to becoming a
shareholder.Ó

The Tarsus business: major brands in attractive specialist B2B markets

Tarsus owns and operates a portfolio of 160+ Live and On-Demand B2B Event
brands, with a focus on growing, specialist B2B markets with fragmented supply
chains and high levels of innovation.

The top 10 Tarsus Brands Ð attracting a total of c.515k attendees and 8,350+
exhibitors across c.385k net square metres of floor space - will further
expand InformaÕs Tier 1 portfolio to more than 85 Brands demonstrating the
following characteristics:

á      Leading position within market/region

á      Brand strength and visibility

á      International customer base

á      High levels of forward commitments

á      Consistent, strong revenue growth

á      Volume, price and ancillary revenues

á      Revenue scale of $5m+

Since 2019, when Tarsus plc was acquired by Charterhouse, the Tarsus portfolio
has been expanded and enhanced through 24 new launches and 11 targeted
acquisitions. Like Informa, Tarsus is seeing a similar strong return to the
market for Live and On-Demand B2B Events in 2023.

The Tarsus business also significantly benefits from biennial events in odd
numbered years.

The Informa and Tarsus portfolios are complementary, both geographically and
by market category, strengthening InformaÕs position across a number of
verticals including:

á      Beauty & Aesthetics: A4M, LiVDerm, South Beach Symposium

á      Healthcare: Health Connect Partners, PAINWeek, Cardiometabolic
Health Congress

á      Packaging: LabelExpo (US, Mexico, Europe, China, Thailand, India)

á      Infrastructure: Intertraffic, Rail+Metro, Infrastructure Connect,
Cambuild

á      Aviation: Dubai Airshow, MEBAA Show, Space Tech Expo

á      Sustainability: Intersolar, Mexico Wind Power, Aquatech Mexico

á      Homewares: Home Furnishing Expo Shenzhen (Hometex), Zuchex

á      Fashion: SIUF Show, OFFPRICE

The Combination Programme

 We will run a joint combination programme with three key objectives by
January 2024:

1.    Deliver: Maximise 2023 performance, minimizing disruption and
distraction in what is a key year of return, growth and acceleration for Live
B2B Events;

2.    Discover: Make growth-focused people, brand and business combination
decisions;

3.    Combine: Ensure the portfolios enter 2024 successfully, operating as
one company under the Informa brand.

Informa colleague, Mark Temple-Smith, will step in as Executive Chair of
Tarsus from completion through to the end of the Combination Programme in
January 2024. Mark is currently Informa Markets Chief Operating Officer and
was formerly the CEO of Asia for Tarsus.

Douglas Emslie, the current Chief Executive of Tarsus, will become a Senior
Advisor to the Informa Group through the Combination Programme, guiding on
talent, brands and partnerships.

The combination of Tarsus with Informa is expected to generate c.$20m
annualised operating synergies by 2025 through efficiencies in procurement,
real estate, technology, event contracts and other areas.

The combination is also expected to deliver incremental revenue benefits
through cross marketing of Brands, digital expansion and new event launches,
as well as harvesting first party data from Tarsus into IIRIS.

Financial details

á      Tarsus initial enterprise value $940m

á      Funded with cash and $210m of new Informa shares (c.26m shares
based on 30-day volume weighted average share price), with equity forward
valued by Seller at 850p

á      Two-year equity lock-up period post completion

á      Earn-up of $45m payable in Informa shares (c.4m shares based on
850p share price) if and when Informa shares reach 850p within the two-year
lock-up period

á      c.$20m+ annualised operating synergies

á      In 2023, Tarsus full year revenues are estimated to be more than
£175m

Acquisition multiple (including operating synergies):

á      2024/2025 Average: Sub-9x EBITDA

á      2023/2024 Average: 9.9x EBITDA

Earnings accretion (including operating synergies):

á      2025: High single digit adjusted EPS accretion

á      2024/2025 Average: Mid-single digit adjusted EPS accretion

Return on Invested Capital (including fees and integration costs):

á      2025: Double-digit post-tax ROIC

á      2024/2025 Average: High single digit post-tax ROIC

Transaction timetable

á      Class 2 transaction under UK Listing Rules

á      Subject to standard regulatory clearances, including Hart Scott
Rodino in the United States

á      Completion expected by 1 July 2023.

Informa 2022 Full Year Results

Separately, Informa has today published its 2022 Full Year Results, reporting
c.43% revenue growth (£2,262m), c.59% adjusted operating profit growth
(£496m) from continuing businesses. The full release is available via
InformaÕs website at www.informa.com (http://www.informa.com) .

 

 Enquiries
 Stephen A. Carter, Group Chief Executive                  +44 (0) 20 8052 0400
 Gareth Wright, Group Finance Director                     +44 (0) 20 8052 0400
 Richard Menzies-Gow, Director of IR & Communications      +44 (0) 20 8052 2787
 Tim Burt / Simon Duke Ð Teneo                             +44 (0) 7583 413254 / +44 (0) 7815 779225

Notes to Editors

About Tarsus

Founded in 1998, Tarsus has grown to become one of the most well-known and
respected names in the B2B events industry. Businesses around the world, from
small businesses to fast-growing start-ups and well-known brands rely on its
events and media to launch products, build supply chains and brand awareness.

Tarsus has been owned by Charterhouse Capital Partners since 2019. In 2021, it
reported statutory revenue of $106m, statutory loss before tax of $92m and
gross assets of $1,037m.

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