REG - Informa PLC - Divestment of Pharma Intelligence for £1.9bn

InformaAnnouncement

10/02/2022 08:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220210:nRSJ2750Ba&default-theme=true

RNS Number : 2750B  Informa PLC  10 February 2022

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

Informa PLC Press Release

10 February 2022

Informa to divest Pharma Intelligence for £1.9bn and commence share buyback

2021-2024 Growth Acceleration Plan II Update

Informa (LSE: INF.L), the international B2B Markets, Knowledge Services and
Business Intelligence Group today announced two significant steps in its
2021-2024 Growth Acceleration Plan II ("GAP II").

The Group has agreed to divest Pharma Intelligence, the largest business
within its Informa Intelligence division, to Warburg Pincus for £1.9bn, while
separately commencing a share buyback.

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

 "Like GAP I, our GAP II programme is ambitious for growth, value creation and
 shareholder returns. Since announcing the intention to divest our Informa
 Intelligence portfolio, we have received significant interest in its
 high-performing brand portfolio, leading to today's binding agreement for
 Pharma Intelligence, which reflects the quality and value created in this
 business, as well as its significant future potential."

 He added:

 "Our capital allocation discipline, combined with the pace and scale of
 today's agreement, allows us to commence our share buyback programme with
 immediate effect. It also enables us to strengthen the balance sheet, generate
 funds for further growth investment in our two leadership businesses and
 retain a minority position in Pharma Intelligence to benefit from its future
 growth."

Growth Acceleration Plan II - Increased Portfolio Focus

At Informa's Capital Markets Day last December, the Group outlined GAP II, a
four-year programme designed to create a more focused, higher growth business.

As part of GAP II, the Group announced its intention to focus investment on
the two markets where it has leading brands and leadership positions of global
scale, with attractive opportunities for further growth and expansion:
Academic Markets & Knowledge Services (Taylor & Francis) and B2B
Markets & Digital Services (Informa Markets, Informa Connect, Informa
Tech).

The Group announced the intended divestment of its Informa Intelligence
portfolio of businesses, which were transformed during the 2014-2017 GAP I
investment, providing funds to accelerate investment and expansion in our two
businesses with scale leadership positions.

Divestment of Pharma Intelligence

Over the past two months, Informa has received significant interest in its
Pharma Intelligence business, a leading provider of specialist intelligence
and data for Clinical Trials, Drug Development and Regulatory Compliance. In
2020, this business accounted for approximately 40% of Informa Intelligence
reported divisional revenues of £305m and c.50% of reported divisional
adjusted operating profit of £103m.

The value created in this high-quality business and its significant future
growth potential have led to a binding agreement with Warburg Pincus that
values Pharma Intelligence at £1.9bn, equating to an attractive EV/EBITDA
multiple based on 2020 reported figures or 2021 expected outcomes.

Under today's agreement, Warburg Pincus' commitment to future investment and
growth, and our own knowledge and belief in the business, has led to a
structure whereby 85% of equity value is realised today, equating to c.£1.7bn
in cash, pre-tax, with Informa retaining a c.15% shareholding in the business
going forward. This c.15% equity interest ranks pari passu with Warburg
Pincus' equity and includes customary rights in the event of a sale of the
business.

Retaining this shareholding, as well as Board representation, will contribute
to the efficiency of the separation process, enabling the business to focus on
its forward growth opportunities.

Today's binding sale agreement for Pharma Intelligence, which has the full
approval of the Informa Board as being in the best interests of shareholders
is expected to complete by early June subject to relevant regulatory
clearances.

Following completion and separation of Pharma intelligence, Informa will
proceed with the next process in its GAP II divestment plans, focusing on its
Financial Intelligence business comprising EPFR Global, IGM and Zephyr but
excluding the retail banking joint venture, Curinos.

Adarsh Sarma, Co-Head of Europe, Warburg Pincus LLC said:

"We are delighted to be the partner of choice for Informa and to have the
opportunity to acquire Pharma Intelligence with its operating management team.
Pharma Intelligence plays a critical role in supporting and maintaining the
ecosystem that surrounds clinical trials, drug development and regulatory
compliance, and we intend to invest and significantly grow the business and
its product offerings. We are also pleased to be working again with Jay
Nadler, who we worked with at MLM Information Services and Interactive Data
Corp and he was previously CEO of Clarivate. He will also be joining the Board
of the newly separated company."

Stephen A. Carter, Group Chief Executive, Informa PLC, commented:

"We received significant interest in the Pharma Intelligence business. We are
delighted to partner with Warburg Pincus and share their view on its future
growth potential, hence, we welcomed an agreement that represented value today
and growth and value tomorrow."

Share Buyback Programme

Alongside investing for growth, the Group has previously announced its
intention to return a proportion of the proceeds from the divestment of
Informa Intelligence to shareholders. Following today's binding agreement for
the Pharma Intelligence business, the Group intends to commence a share
buyback programme.

As such, Informa has entered into a non-discretionary arrangement with its
broker, Merrill Lynch International (BofA Securities), to purchase on its
behalf and within certain pre-set parameters, ordinary shares of 0.1 pence
each in the Company, with the intention to cancel those shares purchased.

The programme will commence with immediate effect and run through to the AGM
in June, including through the Company's close period (30 days from 13
February to 14 March 2022). The maximum amount allocated to the initial
tranche of the buyback programme will be £100m. The share buyback programme
will take place in accordance with the Company's current approved buyback
authorities and be effected in accordance with Chapter 12 of the FCA's Listing
Rules. The maximum number of ordinary shares that may be repurchased under
those authorities is 150,311,000.

Trading Update

Informa will report its 2021 Full Year Results on 15 March 2022. Ahead of
this, the Group can confirm that it expects to report trading in 2021 in line
with guidance of £1.8bn± Group Revenue and £375m± of Adjusted Operating
Profit.

Since the beginning of the COVID pandemic, the Group has put particular
emphasis on cash control, cash management and cash generation as key financial
and company performance targets. This focus has delivered a strong performance
through the year and, as a result, free cash flow is expected to be ahead of
previous guidance of £325m+.

Trading in 2022 has started confidently in our two leadership businesses,
Academic Markets and B2B Markets, alongside continuing growth in our Informa
Intelligence portfolio. Unlike the previous two years, we have a full physical
events calendar scheduled through the first quarter in North America and the
Middle East, with trading in China scheduled to start in mid-March after the
annual holiday period. To date, exhibitor and attendee participation levels
and forward bookings have been robust, with our brands in Construction &
Real Estate (World of Concrete, TISE), Healthcare (Arab Health, Medlab),
Luxury & Lifestyle (Miami International Boat Show) and Technology (LEAP)
all performing in line or ahead of plan.

 Enquiries
 Stephen A. Carter, Group Chief Executive                  +44 (0) 20 7017 5000
 Gareth Wright, Group Finance Director                     +44 (0) 20 7017 5000
 Richard Menzies-Gow, Director of IR & Communications      +44 (0) 20 8052 2787
 Tim Burt / Zoë Watt - Teneo                               +44 (0) 7583 413254 / +44 (0) 7713 157561

Notes to Editors

About Pharma Intelligence

A leading operator in the $22bn global pharma and life sciences analytics
markets, Pharma Intelligence delivers highly valued specialist intelligence
and data in areas of Clinical Trials, Drug Development and Regulatory
Compliance. Its portfolio of specialist brands includes the Citeline suite of
products (Citeline Predict, Citeline Engage, Citeline Connect), Biomedtracker,
Datamonitor Healthcare, Scrip, Pink Sheet and TrialScope.

The Pharma Intelligence business performed strongly in 2021 and this has
continued into 2022, with high levels of subscription renewals and continued
momentum in annualised contract values. For the purpose of UK listing rules,
the last reported Profit Before Tax of Pharma Intelligence was £55.3m for the
year ended 31 December 2020 and the last statement of Gross Assets was
£479.9m, as at 30 June 2021.

About Warburg Pincus

Warburg Pincus LLC is a leading global growth investor. The firm has more than
$73 billion in assets under management. The firm's active portfolio of more
than 235 companies is highly diversified by stage, sector, and geography.
Warburg Pincus is an experienced partner to management teams seeking to build
durable companies with sustainable value. Founded in 1966, Warburg Pincus has
raised 20 private equity and 2 real estate funds, which have invested more
than $100 billion in over 1,000 companies in more than 40 countries. The firm
is headquartered in New York with offices in Amsterdam, Beijing, Berlin, Hong
Kong, Houston, London, Luxembourg, Mumbai, Mauritius, San Francisco, São
Paulo, Shanghai, and Singapore. For more information please visit
www.warburgpincus.com. (http://www.warburgpincus.com.) Follow us on LinkedIn
(https://protect-us.mimecast.com/s/eAwsCn5YzpcXWmJl5iJebIr?domain=linkedin.com)
.

Cautionary Statement

This announcement contains forward-looking statements, including in relation
to the financial condition of the Group and the results of operations and
businesses of the Group. Forward-looking statements are sometimes, but not
always, identified by their use of a date in the future or such words and
words of similar meaning as "ambition", "anticipates", "aspire", "aims",
"due", "could", "may", "will", "should", "expects", "believes", "intends",
"plans", "potential", "targets", "goal" or "estimates". Although the Group
believes that the expectations reflected in such forward-looking statements
are reasonable, these statements are not guarantees of future performance and
are subject to a number of risks and uncertainties and actual results,
performance and events could differ materially from those currently being
anticipated, expressed or implied in such forward-looking statements. Factors
which may cause future outcomes to differ from those foreseen in
forward-looking statements include, but are not limited to, those identified
in the "Principal Risks and Uncertainties" section of the Group's Annual
Report. Forward-looking statements contained in this announcement speak only
as of the date of preparation of this announcement and have not been audited
or otherwise independently verified. Past performance should not be taken as
an indication or guarantee of future results and no reannouncement or
warranty, express or implied, is made regarding future performance. The Group
therefore cautions against placing undue reliance on any forward-looking
statements. Nothing in this announcement should be construed as a profit
forecast.

Statements in this announcement reflect the knowledge and information
available at the time of its preparation. Except as required by any applicable
law or regulation, the Group expressly disclaims any obligation or
undertaking, including to release publicly any updates or revisions to any
statements contained in this announcement to reflect any change in the Group's
expectations or any change in events, conditions or circumstances on which any
such statement is based.

This announcement does not constitute or form part of any offer or invitation
to purchase any securities of any person nor any offer or invitation to sell
or issue, or any solicitation of any offer to purchase or subscribe for, any
such securities, nor shall it or any part of it, or the fact of its
distribution, form the basis of, or be relied on in connection with, any
contract or commitment or investment decisions relating thereto, nor does it
constitute a recommendation regarding any securities.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  DISQBLBFLLLXBBB