REG - Informa PLC UBM PLC - Recommended Offer for UBM plc by Informa PLC <Origin Href="QuoteRef">INF.L</Origin> <Origin Href="QuoteRef">UBM.L</Origin> - Part 2

InformaAnnouncement

30/01/2018 07:05

- Part 2: For the preceding part double click  ID:nRSd2991Da 

value of approximately £3.9 billion for UBM; 
 
·          a premium of 29.9% to the Closing Price of 747.5 pence per UBM
Share on 15 January 2018 (being the Closing Price on the last Business Day
before the commencement of the Offer Period); and 
 
·          in addition, based on the respective thirty-day volume-weighted
average share prices to the last Business Day before the commencement of the
Offer Period, the Offer Price represents a premium of 29.0% 
 
The Offer will result in Informa Shareholders owning approximately 65.5% of
the Enlarged Group and UBM Shareholders owning approximately 34.5% of the
Enlarged Group (based on the existing ordinary share capital of Informa and
the fully diluted share capital of UBM). 
 
3.         Mix and Match Facility 
 
UBM Shareholders (other than certain persons in Restricted Jurisdictions) will
be entitled to elect, subject to availability, to vary the proportions in
which they receive New Informa Shares and cash in respect of their holdings in
UBM Shares. However, the total number of New Informa Shares to be issued and
the maximum amount of cash to be paid under the Offer will not be varied as a
result of elections under the Mix and Match Facility. Accordingly, elections
made by UBM Shareholders under the Mix and Match Facility will be satisfied
only to the extent that other UBM Shareholders make off-setting elections. 
 
To the extent that elections cannot be satisfied in full, they will be scaled
down on a pro-rata basis. As a result, UBM Shareholders who make an election
under the Mix and Match Facility will not know the exact number of New Informa
Shares or the amount of cash they will receive until settlement of the
consideration due to them in respect of the Offer. The Mix and Match Facility
is conditional upon the Scheme becoming Effective. 
 
Elections under the Mix and Match Facility will not affect the entitlements of
those UBM Shareholders who do not make such elections. 
 
Further details in relation to the Mix and Match Facility will be contained in
the Scheme Document and the related Form of Election. 
 
4.         Informa's background to and reasons for the Offer 
 
The Knowledge & Information Market is expanding at pace. Digitisation has
driven rapid growth in the internet, electronic communications and social
media, leading to exponential growth in the volume and availability of data
and information. 
 
For businesses, this creates challenges in understanding markets, identifying
trends and developing new customer relationships. There is a need for timely
insights, accurate intelligence and bespoke analysis that cuts through the
information noise to help focus on what matters. Similarly, there is a demand
for platforms that can provide targeted business connections at scale.
Knowledge has become the key competitive advantage, helping companies to make
better decisions faster, target the right buyers at the right time and improve
return on investment. 
 
Businesses with access, data and expertise in industries and markets, with the
tools to provide specialist knowledge and connections that creates advantage
have, therefore, become highly valued and sought after. 
 
As this market for B2B Information Services grows and expands internationally,
OperatingScale and IndustrySpecialisation are becoming increasingly important.
Businesses need partners with deep, specialist expertise in industry verticals
who can help them gain knowledge and develop relationships internationally,
incorporating a range of face-to-face platforms and events, data analytics,
targeted lead generation and trusted, reliable intelligence and research. 
 
This evolving and expanding landscape creates exciting opportunities for
Information Services companies that have the right mix of assets and
capabilities. 
 
Informa PLC 
 
The board of Informa has long-recognised the value and potential opportunities
in the Knowledge & Information Market and in 2014 launched the Growth
Acceleration Plan ("GAP") to better position the group to pursue these
opportunities. 
 
The headline ambition of GAP was to return all parts of the business to growth
whilst simultaneously building the capacity and capabilities for future growth
and scale. It was a strategy of pro-active change and investment, built around
five key initiatives: 
 
1.   Build and buy a scale B2B events business in the Global Exhibitions
Division 
 
2.   Repair and return to growth the Business Intelligence Division 
 
3.   Simplify, focus and grow the Knowledge & Networking Division 
 
4.   Build scale and management capability in the US market 
 
5.   Invest to build the platforms and capabilities for future scale and
growth 
 
GAP has driven a significant amount of change at Informa, resulting in a
simplified group structure, greater focus on end markets and customers, and
improved levels of operational fitness. It has also led to significant
investment in technology, building robust platforms for the delivery of future
growth and scale. This has been matched by significant external investment
through the targeted addition of businesses, helping Informa to expand
internationally, strengthen its position in key industry verticals and broaden
its range of B2B capabilities. 
 
GAP was successfully completed in 2017, with all five initiatives achieved
along with the over-arching ambition for higher levels of growth: 
 
·    All four Divisions delivered positive underlying revenue growth in 2017,
with the group underlying growth rate at over +3% compared to a base of +0.7%
in 2014. 
 
·    In Global Exhibitions, revenue has grown from £160 million in 2013
pre-GAP, to more than £550 million in 2017 through a combination of
market-leading underlying growth and a programme of targeted acquisitions,
including: 
 
·    Health & Nutrition (Virgo, Penton) 
 
·    Construction & Real Estate (Hanley Wood, WWETT) 
 
·    Beauty & Aesthetics (China Beauty, FACE) 
 
·    Life Sciences (FIME, EHI) 
 
·    Agriculture (Penton, Agrishow) 
 
·    International Yachting (YPI) 
 
·    Pop Culture (Dallas Comicon, Orlando Megacon) 
 
·    Following the acquisition of UBM, the Enlarged Group is expected to have
total B2B events revenue of around £1.7 billion creating a leading, scale
position in this attractive market. 
 
·    In the key US region, which accounts for around half of the global B2B
events industry and around half of the B2B intelligence industry, Informa has
expanded rapidly, building strong market positions with highly experienced
management teams. Revenue across all Informa's businesses in the US reached
more than $1 billion in 2017, representing more than half of Informa Group
revenues. 
 
·    Informa has invested around £100 million through the GAP period in a
range of individual projects across all four operating divisions as well as
centrally in Global Support. These initiatives have mainly been focused on
technology, enhancing the group's core platforms, ranging from customer
management systems, to marketing automation to front-end delivery platforms.
This has strengthened the group's core capabilities, supporting the delivery
of consistent future growth and further scale. 
 
The largest single addition to the portfolio through the GAP period was Penton
Information Services for £1.2 billion in November 2016. It significantly
strengthened Informa's Global Exhibitions and Business Intelligence Divisions,
extending its US presence and market position in key verticals such as Health
& Nutrition, Agriculture & Food, TMT, Infrastructure and Transportation. 
 
Penton Information Services also broadened Informa's portfolio of B2B
capabilities through its expertise in B2B marketing and data solutions,
digital communities and specialist community content. This range of additional
B2B services reflected Penton's highly commercial approach to customers,
focused on maximising revenue by selling a full range of information services
products tailored to each specific industry vertical. 
 
The Penton approach is reflective of a market that is rapidly moving to
OperatingScale and IndustrySpecialisation, as customers increasingly look for
partners with specialist knowledge and relationships who can deliver a range
of services providing intelligence, data, networks, community and connections
within their industry globally. 
 
Informa has maintained this approach with the Penton businesses since the
acquisition, keeping its historical franchises intact and continuing to sell
across multiple services. 
 
UBM plc 
 
UBM plc is the largest pure play B2B events business in the world, owning and
operating more than 300 exhibitions and events. The board of UBM recognises
the long-term value and opportunities in the business information services
market, with a particular focus on the power of face-to-face platforms for
delivering valuable connections. 
 
In November 2014, UBM launched the Events First strategy, to focus the group
on the attractive B2B events industry. Over the past three years UBM's
management team, under the leadership of Tim Cobbold, has been successfully
implementing that strategy, reshaping the group's portfolio of businesses and
transforming UBM into a high quality events business. Significant progress has
also been made towards improving operational effectiveness and efficiency,
leading to both accelerating growth and an operating margin that is trending
towards the group's medium-term margin target of 30%. 
 
Creating a leading B2B Information Services Group 
 
Informa believes that the complementary nature of Informa and UBM's businesses
and common focus on expansion and growth within the Knowledge & Information
Market have, understandably, led to a history of discussions between the two
groups in regards a potential combination. These have never progressed further
for a number of reasons pertinent at the time, mainly reflecting historical
portfolio mix and timing. 
 
As the market for B2B Information Services progressively moves to
OperatingScale and IndustrySpecialisation, the boards of Informa and UBM
recognise there is a compelling strategic rationale to combine the strengths
of the two companies, creating a group with the scale and specialist
capabilities to capture the full long-term growth potential of this attractive
market. 
 
The timing is supported by the completion of Informa's transformation
programme in 2017 and the significant progress UBM has made with its Events
First strategy,  which leaves both Informa and UBM focused and operationally
fit, with greater geographic and portfolio complementarity and with
accelerating underlying growth rates, ensuring the two groups come together
from a position of strength. 
 
·    The Enlarged Group has pro-forma revenues of around £2.6 billion and
adjusted operating profit of around £0.8 billion (based on results to 31
December 2016) and is expected to build on the success of the GAP and Events
First strategies. 
 
·    The Enlarged Group will employ around 11,000 colleagues, with a leading
presence in the United States, China, Middle East, ASEAN, South America and
India, amongst others. 
 
·    The Enlarged Group will become the number one B2B events group globally
and the leading exhibitions organiser in the key markets of China and the US.
It will own 24 of the Top 250 US exhibitions as measured by the Trade Show
News Network and have more than 150 brands globally that each generate more
than £2 million a year, and more than 60 brands that generate more than £5
million a year, underlining the quality of its portfolio. This creates the
scale, high quality B2B events business that both Informa and UBM have been
building towards. 
 
·    The Enlarged Group will also own complementary subscription-based B2B
Intelligence and specialist B2B marketing services businesses. Its
Intelligence business includes leading brands within six industry verticals,
including Pharma (Citeline), TMT (Ovum), Maritime (Lloyd's List), Agriculture
& Food (Fertecon), Finance (EPFR Global) and Industry & Infrastructure
(IndustryWeek). On marketing services, the Offer will bring together Informa
Engage with a range of specialist marketing businesses within UBM. 
 
·    The Enlarged Group will continue to own the leading scholarly research
business, Taylor & Francis, with annual revenues of more than £500 million.
While this serves a different end market in upper level education and
research, it is an information business with similarities and crossover to the
rest of the group in areas such as content production, data management and
digital delivery. It remains a core business for the Enlarged Group,
delivering steady underlying revenue growth and attractive margins to produce
consistently strong cash flow. 
 
Having built a leading position in B2B events, as the wider B2B market moves
to OperatingScale and IndustrySpecialisation, the Enlarged Group will focus
the next stage of development on its broader portfolio, whilst maintaining
strong cash discipline, a progressive dividend and robust balance sheet. 
 
Informa believes that the next stage of the Enlarged Group's evolution will be
about using the immediate benefits of OperatingScale to invest, adapt and
accelerate to reap the wider benefits of IndustrySpecialisation. 
 
Benefits of Operating Scale 
 
·    Revenue growth… 
 
·    The Enlarged Group creates a scale growth business within attractive
growth markets, both geographically and by category; 
 
·    The Enlarged Group is expected to benefit from incremental near-term
revenue opportunities in areas including cross-marketing,
internationalisation, comprehensive marketing solutions, digitisation,
sponsorship and customer value initiatives. Longer term, there is the
potential for further growth acceleration through the benefits of
IndustrySpecialisation. These revenue opportunities have not been quantified
and therefore have not been reported on under the Takeover Code; 
 
·    Global reach…creating broader based growth and market opportunities: 
 
·    Informa and UBM have highly complementary geographic portfolios with
Informa's strength in the US and Middle East fitting seamlessly with UBM's
strength in China, the US and South America; 
 
·    The Enlarged Group is expected to operate in more than 30 countries,
including B2B positions in the major markets of the United States, China,
Middle East, ASEAN, South America and India; 
 
·    Quality of earnings… 
 
·    The Enlarged Group is expected to have more predictable and resilient
earnings on the back of its increased scale and international breadth, with
less exposure to individual customer or market volatilities; 
 
·    The Enlarged Group is expected to generate more than two thirds of
revenue from forward booked and recurring revenue streams, including
exhibitions, subscriptions and multi-year sponsorship, further underpinning
the predictability, visibility and resilience of earnings; 
 
·    Cash flow strength…around £0.8 billion of adjusted operating profit and
£0.6 billion of annual free cash flow on a pro forma basis for 2016, allowing
for: 
 
·    Flexibility and funding for continuous reinvestment back into the
business for new growth initiatives and product development; 
 
·    Consistent and progressive returns to shareholders through dividends or
other forms of capital return; 
 
·    Targeted bolt-on acquisitions, adding further geographic reach and/or new
capabilities; 
 
·    Capital discipline, ensuring a robust balance sheet at the Enlarged
Group, with a target of maintaining a profile consistent with investment grade
status; 
 
·    B2B events strength…around £1.7 billion of B2B events revenue: 
 
·    Depth and breadth in major geographical events markets of the United
States, China, Middle East, ASEAN, South America and India; 
 
·    Strong vertical positions, including Health & Nutrition (Food
Ingredients, Natural Products West Expo), Life Sciences (Arab Health,
Hospitalar), Pharma & Biotech (CPhI, Bio Europe) and Technology (Black Hat,
Ovum); 
 
·    Increased scale in regions and verticals will strengthen customer
relationships, improve partnership opportunities and drive operational
efficiencies; 
 
·    Operational excellence… 
 
·    The Enlarged Group will bring together some of the most talented and
experienced colleagues within their respective B2B markets. Combining the
world class in-market talent, extensive operating experience and leading
processes should ensure operational fitness and performance; 
 
·    Technology innovation… 
 
·    The increased operating and financial scale of the Enlarged Group will
allow for greater absolute levels of reinvestment and innovation in the
business, delivering greater frequency and quality of new products, technology
and platform enhancements; and 
 
·    Operating synergies… 
 
·    The Offer will lead to scale efficiencies and reduction in cost
duplication, producing significant operating synergies. It is anticipated
there will be annual recurring pre-tax cost savings of at least £60 million,
with around £50 million to be delivered in the 2019 financial year. The
implementation of these recurring synergies is expected to lead to one-off
cash costs of approximately £80 million. 
 
Over time, Informa expects that the Enlarged Group will enable it to capture
the wider benefits of IndustrySpecialisation in B2B Information Services,
accelerating the shift to a more customer-led operating model built around the
strengths of the Enlarged Group's positions in key industry verticals and
broad set of powerful B2B capabilities. 
 
Benefits of Industry Specialisation 
 
·    Industry strength and depth…reach and depth in more than 15 targeted
verticals: 
 
·    The Enlarged Group will provide professional networks and communities
with subscription-based products, high quality branded confexes, scale
exhibitions, specialist lead generation and content and other information
services across more than 15 industry verticals; 
 
·    On completion of the Offer, the Enlarged Group will already have
established, focused strength in several major verticals, including - Health &
Nutrition,Life Sciences, Pharma & Biotech and Technology; 
 
 Selection of verticals                      Examples of events, data and media brands:        
 Health & Nutrition                          Food Ingredients, Natural Products West           
 Life Sciences                               Arab Health, Hospitalar                           
 Pharma & Biotech                            CPhI, Bio Europe                                  
 Technology                                  Black Hat, Ovum                                   
 Infrastructure, Real Estate & Construction  Expo CIHAC, World of Concrete                     
 Food Technology & Hospitality               Hotelex &Expo Finefood, Fispal Technologia        
 Advanced Manufacturing & Industrial         ExpoMafe, MD&M                                    
 Maritime                                    Lloyd's List, Seatrade Cruise Global              
 Fashion & Jewellery                         Hong Kong Jewellery & Gem Fairs, MAGIC            
 Agriculture                                 Agrishow, Farm Progress                           
 Finance                                     EPFR Global, SuperReturn                          
 Transportation                              MRO Europe, World Routes                          
 International Yachting                      Monaco Yacht Show, China International Boat Show  
 Pop Culture & Brands                        FanExpo, Licensing Expo                           
 Furniture                                   Furniture China, Formobile                        
 Lifestyle                                   CBME, Bahrain Autumn Fair                         
 
 
·    Customer strength… 
 
·    As the Enlarged Group offers an increasing array of connected B2B
services across multiple channels, it has the opportunity to develop deeper,
more strategic customer relationships. It will increasingly become a growth
partner for customers and a market maker for particular industry verticals; 
 
·    Data and Marketing Solutions… 
 
·    The combination of high quality brands, depth in verticals and
international reach provides the Enlarged Group with a major growth
opportunity in specialist B2B marketing services; 
 
·    Utilising its audience reach, specialist vertical knowledge and data
capabilities, it can provide customers with highly targeted B2B lead
generation products; 
 
·    Verticalisation… 
 
·    Over time, the Enlarged Group will gradually shift its operating model to
be more customer-led and market-focused. This will position the business as a
market maker or growth enabler for the vertical, partnering closely with
customers to help them build market share and grow the overall size of the
market. 
 
Benefits for Colleagues 
 
Informa expects the Enlarged Group will employ around 11,000 colleagues, whose
energy, ideas and contribution create the content, events, intelligence and
learning that customers value.  The Enlarged Group will create new
opportunities for colleagues through: 
 
·    Scale and Specialisation…as part of a broader-based Information Services
Group, there will be greater opportunity for colleagues to gain knowledge in
adjacent markets, learn new skills and pursue internal roles in different
areas; 
 
·    International opportunities…the Enlarged Group's operational footprint
and geographic reach will provide exciting opportunities for colleagues to
work internationally as part of a more global organisation; 
 
·    Colleague investment…the Enlarged Group will benefit from scale
efficiencies, providing greater scope for investment in areas of training and
personal development; 
 
·    Growth markets…the Enlarged Group will have strong positions in
attractive and growing information markets, providing job satisfaction and
career opportunities. 
 
Value Creation for Shareholders 
 
Informa expects the Enlarged Group to create significant value for
shareholders as the benefits of increased Operating Scale and Industry
Specialisation lead to significant operating synergies, increased financial
strength and higher levels of sustainable and predictable growth: 
 
·    Sustainable growth…the combination of increased scale, international
reach in attractive markets, operational fitness and a broad set of B2B
capabilities will make the Enlarged Group a powerful partner for B2B
customers, leading to higher levels of sustainable growth; 
 
·    Predictable growth…the Enlarged Group will be a more predictable and
robust business, reflecting increased international scale, portfolio balance
and breadth and a higher level of forward booked and predictable revenue, with
more than two-thirds generated from exhibitions, subscriptions and pre-booked
sponsorship; 
 
·    Financial strength…the Enlarged Group is expected to be highly cash
generative, generating £0.6 billion of free cash flow annually, providing
increased flexibility for investment and shareholder returns while maintaining
a strong balance sheet; 
 
·    Operating synergies…the Enlarged Group is expected to deliver at least
£60 million of annual recurring pre-tax cost savings. Furthermore, the Offer
is expected to lead to attractive incremental revenue opportunities in areas
such as cross-marketing, increased customer retention, the
internationalisation of products and services and digital platforms. Over the
long term, the benefits of Industry Specialisation are also expected to
generate additional revenue opportunities, as the Enlarged Group offers a more
integrated approach to B2B services through industry verticals. These revenue
opportunities have not been quantified and therefore have not been reported on
under the Takeover Code. 
 
As a result, the board of Informa expects the Offer to result in: 
 
·    Attractive earnings accretion…positive earnings enhancement in the first
full financial year following the Effective Date; 
 
·    Positive returns… a post-tax return on invested capital in excess of
Informa's cost of capital within 3 full financial years of ownership; 
 
·    Increased liquidity…the creation of the Enlarged Group is expected to
increase the liquidity of the group's equity, making it easier for investors
to buy and sell shares. The Enlarged Group is expected to have a market
capitalisation of over £8 billion and be a member of a number of major
indices, including the FTSE 100 Index. 
 
5.         Further financial benefits and effects of the creation of the
Enlarged Group 
 
·    Informa expects the Enlarged Group to raise its leverage to around 3
times net debt to adjusted EBITDA at the Effective Date. This position is
supported by high levels of forward visibility on revenue and projected strong
cash generation, which are expected to reduce leverage below the target
ceiling of 2.5 times net debt to adjusted EBITDA over time. The board of
Informa believes that this is a level which is broadly consistent with an
investment grade profile. 
 
·    The Effective Tax Rate for the Enlarged Group is expected by Informa to
be around 19% in 2018 on a pro-forma basis and a similar level in 2019 and
2020. This reflects the combined tax structures of both groups as well as the
effects of recent changes to US tax legislation through The Tax Cuts and Jobs
Act of 2017. 
 
·    The board of Informa intends to maintain a progressive dividend policy,
using Informa's dividend per share as the base. It will seek to deliver
consistent growth in dividends, reflective of its free cash flow growth. 
 
·    Informa's intention is to disclose the results of the UBM Group as a
separate division with the Informa Group for the 2018 Interim Results in July.
By the end of 2018, Informa expects to provide results for the Enlarged
Group. 
 
Informa Quantified Financial Benefits Statement 
 
The board of Informa is confident that, as a direct result of the transaction,
the Enlarged Group will generate attractive synergies and create additional
shareholder value. 
 
The immediate benefits of OperatingScale are expected to generate significant
operating synergies, including a run rate of at least £60 million of annual
recurring pre-tax cost savings by the end of 2020, with around £50 million to
be delivered in the 2019 financial year. 
 
These anticipated cost synergies will accrue as a direct result of the
creation of the Enlarged Group and would not be achieved on a standalone
basis. The potential sources of quantified operating synergies are in addition
to any savings previously targeted and already underway by either Informa or
UBM. 
 
The constituent elements of quantified cost synergies, which are expected to
originate from the cost bases of both Informa and UBM, comprise: 
 
·    Corporate overhead reduction: Approximately £20 million (33%) of the cost
synergies are expected to be generated from the reduction of duplicate costs
across the board and executive leadership teams, as well as across other
corporate and group functions; 
 
·    Management and support restructuring: Approximately £37 million (61%) of
the cost synergies are expected to be generated from a reduction of duplicate
management and associated costs, and the rationalisation of overlapping IT
systems, processes and associated investment spend; and 
 
·    Procurement benefits: Approximately £3 million (6%) of the cost synergies
are expected to be generated from leveraging the Enlarged Group's scale across
procurement, commissions, insurance and property. 
 
Informa estimates that the realisation of these synergies will give rise to
one-off cash costs of approximately £80 million, the majority of which will be
incurred in the first two years after the Effective Date. 
 
Aside from these one-off costs, Informa does not expect any material
dis-synergies to arise from the creation of the Enlarged Group. 
 
The Quantified Financial Benefits Statement set out above has been reported on
under the Takeover Code by Deloitte, and by Informa's financial advisers,
Centerview Partners and Barclays. Further details on the anticipated cost
synergies are included in Appendix 4. 
 
In addition, the board of Informa has identified further cost savings, which
have not been quantified and therefore have not been reported on under the
Takeover Code. 
 
Potential revenue opportunities 
 
The board of Informa is also confident of delivering significant further value
through the realisation of incremental revenue synergies that have not been
quantified and therefore have not been reported on under the Takeover Code.
The board of Informa believes such further value could be generated through
its 6-Step Revenue Growth Plan, further details of which are set out under
"Customer First - Revenue opportunities" on page 34 below. 
 
Informa's past experience in executing and integrating significant
acquisitions provides the board of Informa with reassurance and confidence in
the deliverability of the quantified cost synergies outlined, as well as in
the value potential incremental revenue opportunities identified. 
 
6.         Informa's intentions and Strategic Plans 
 
The Accelerated Integration Plan 
 
It is Informa's ambition to move with pace and purpose to create a unified
business by the end of 2018. 
 
This will be achieved through The Accelerated Integration Plan ("AIP"), a
detailed programme that follows a similar approach to the integration of
Penton Information Services, designed to minimise disruption to customers,
maintain operational momentum, and create opportunities for all colleagues
from Informa and UBM. 
 
Guiding Principles 
 
1.   Simplicity and Speed - Management and leadership 
 
Patrick Martell, the Chief Executive of Informa's Business Intelligence
Division, will additionally take over from Tim Cobbold as Chief Executive of
the UBM operating unit to lead the AIP from the Effective Date through to a
target date for completion of market-facing commercial integration of 31
December 2018. With this approach, Informa will be replicating the process and
structure it adopted during the integration of Penton Information Services. 
 
Reporting directly to Stephen A. Carter, Patrick will work closely with
Charlie McCurdy, Chief Executive of Informa's Global Exhibitions Division,
Andrew Mullins, Chief Executive of Informa's Knowledge & Networking Division,
and Senior Operating Management from UBM to develop the Enlarged Group's
operating model and management structure. 
 
2.   Business First - Minimise disruption 
 
It is Informa's view that at the brand, market and operating level, UBM has
strong leadership with well-established customer relationships and deep
expertise within its numerous vertical-focused businesses. The AIP will seek
to minimise any disruption to these brand and event teams, providing strong
ongoing support to allow them to focus on continued delivery and growth. 
 
3.   Leaning into Strength - Operating approach by region 
 
In Asia, where UBM has a leading business, the combination will be approached
in a way that reflects its established position in the region and the strength
and experience of its Asian management team. This team will join forces with
Informa's brands, leaders and important joint venture partners to drive its
continued expansion and growth in the region. 
 
In the Americas, where UBM and Informa have highly complementary businesses,
the operating structure will reflect the Enlarged Group's depth in industry
verticals. Similarly, in Europe, operations will be merged and streamlined. 
 
In the Middle East & Africa, Informa has an established business with an
experienced management team, who will welcome UBM's operations into its
existing structure. 
 
4.   Stability and Continuity - No change to shared service centres 
 
The AIP is focused on streamlining the two businesses with minimal disruption.
To this end, there are no plans to make any changes to the shared service
centre structure of either UBM or Informa. This includes UBM's shared service
centres in Kent, Long Island and Hong Kong, as well as Informa's shared
service centres in Colchester, Cleveland, Sarasota and Singapore. 
 
5.   Efficiency First - Maximise the benefits of scale 
 
The AIP will quickly target potential areas of savings arising from scale
efficiencies, including in relation to venues, general contractors,
consultancies, travel, IT services, property, insurance, marketing and
governance. 
 
6.   Efficiency First - Duplication of resources 
 
There will be some overlap between the two businesses in corporate overhead,
and divisional and operating management. The AIP is designed to identify the
optimal combination of people and resources, providing clarity for colleagues
quickly. The approach will be one of minimising duplication and maximising
simplicity. 
 
7.   Focused-Scale - Growth in verticals and specialisation 
 
The Enlarged Group will have a range of focused scale positions across more
than 15 key industry verticals, some well-developed and others emerging. For
example, in Health & Nutrition there will be an immediate benefit by combining
the strengths of Informa's fully integrated market-facing business, the Global
Health & Nutrition Network, with those of UBM's successful Food Ingredients
team. This will further expand the Enlarged Group's presence in this
attractive international market. 
 
The Enlarged Group will have the opportunity to build similar market-focused
businesses in a number of other verticals where it will have focused-scale and
depth of expertise. This includes Life Sciences, Pharma & Biotech and
Technology. 
 
8.   Customer First - Revenue opportunities 
 
The AIP will pursue attractive short and medium-term revenue opportunities
through its 6-Step Revenue Growth Plan: 
 
1.   Cross-Marketing…Use the combined customer, subscriber and visitor
databases and focused-scale in verticals to offer a broader array of B2B
products and services to a broader array of domestic and international
customers. 
 
2.   Internationalisation…Leverage the Enlarged Group's expanded presence and
portfolio of brands across international markets to drive sales syndication,
geo-cloning and brand extension. 
 
3.   Comprehensive Marketing Solutions…Use the increased breadth and depth of
the Enlarged Group's vertical portfolios and specialist data and market
capabilities to bundle products for customers, providing a comprehensive and
effective solution for reaching their customers. 
 
4.   Digitisation…Deploy the Enlarged Group's digital platforms and data
enrichment capabilities across the expanded events portfolio to deliver
targeted lead generation for exhibitors and increase visitor engagement both
before and after events. 
 
5.   Sponsorship…Leverage the Enlarged Group's proven expertise and capability
in developing innovative and bespoke sponsorship opportunities across the
expanded events portfolio. 
 
6.   Customer Value Initiatives…Apply established customer value programmes
across the combined events portfolio. 
 
Board and Governance 
 
The Enlarged Group would continue to be domiciled and listed in the United
Kingdom, with major operational centres around the world. 
 
It is intended that, on completion of the Offer: 
 
·    Derek Mapp, Chairman of Informa, will be Chairman of the Enlarged Group
and Greg Lock, Chairman of UBM, will become the Deputy Chairman of the
Enlarged Group; 
 
·    Stephen A. Carter, Chief Executive of Informa, will be Chief Executive of
the Enlarged Group and Gareth Wright, Finance Director of Informa, will be
Finance Director of the Enlarged Group; 
 
·    Tim Cobbold, Chief Executive of UBM, and Marina Wyatt, Chief Financial
Officer of UBM, will step down from their roles within one month of the
Effective Date. Mr Cobbold will be retained in an advisory capacity through to
the end of 2018; and 
 
·    The board of the Enlarged Group will also include Informa's Senior
Independent Director Gareth Bullock and his other Non-Executive Director
colleagues from Informa. In addition to Greg Lock, Mary McDowell and David Wei
will join as Non-Executive Directors of Informa from UBM. The other members of
the board of UBM will step down with effect from the Effective Date. 
 
Colleague Commitments 
 
Colleagues 
 
Both Informa and UBM are proudly people businesses with the energy, ideas and
contribution of colleagues across the world their single most important asset.
The Enlarged Group will be able to draw on the collective talent and
experience from both companies to lead the business going forward. The
Enlarged Group creates exciting new opportunities for colleagues from both
companies within a business of greater size and scope. 
 
Informa intends to maximise the amount of operating synergies derived from
consolidation of overlapping IT systems and processes and leveraging the
Enlarged Group's scale across procurement, commissions, insurance and
property. 
 
To achieve the remainder of the cost synergies outlined above, Informa intends
to focus on the reduction of duplicate costs across the board and executive
leadership teams, as well as across other corporate and group functions.  In
addition, there will be reductions in duplicate management and associated
costs.  The reductions in these areas, could lead, in aggregate, to a
potential reduction in headcount of approximately 3% across the Enlarged
Group.  However, it is also anticipated that headcount reductions will be
partly mitigated by further job opportunities over the medium term as a result
of the potential revenue synergy opportunities, as well as the standalone
growth of the Enlarged Group, natural attrition and the elimination of vacant
roles. 
 
Informa's priority will also be to preserve market-facing positions at the
Enlarged Group.  There are no plans to change the balance of skills and
functions of employees across the Enlarged Group. 
 
Protection of Existing Contractual and Employment Rights 
 
The existing contractual and employment rights of the employees from both
companies will be safeguarded on and post completion of the Offer.  In
addition, for employees of the UBM Group, Informa has agreed that, for a
period of one year from the date on which Informa Shareholders approve the
Offer (or, if later, six months following the Effective Date) there will be no
changes to their existing terms and conditions regarding base pay, benefits
and allowances, and severance rights will be protected. 
 
Commitment to Pension Obligations 
 
The existing rights under UBM's defined benefit pension schemes will be
safeguarded on and post completion of the Offer. Informa intends that, post
completion of the Offer, the Enlarged Group will continue to comply with all
of UBM's existing defined benefit pension obligations, including commitments
to make previously agreed deficit contributions and contractually required
employer contributions, and any amounts that become payable under existing
guarantees in favour of the trustees of the schemes. 
 
All of UBM's defined benefit pension schemes are currently closed to the
admission of new members. Both of UBM's defined benefit pension schemes in the
UK are also closed to the future accrual of benefits for existing members. It
is not intended that any changes shall be made to reopen (i) any of UBM's
defined benefit pension schemes to the admission of new members or (ii) either
of UBM's defined benefit pension schemes in the UK to the future accrual of
benefits. 
 
Building Communities through Office Locations 
 
The headquarters of the Enlarged Group will remain in London.  While there are
no intentions to make changes to major office locations, including the
location of UBM's headquarters, Informa would anticipate consolidating offices
with near-term expiring leases that are located in close proximity to one
another, to enable colleagues to work more closely together. 
 
Other than this community-oriented approach to consolidating office space,
Informa has no intention to redeploy material fixed assets of the Enlarged
Group or make changes to locations of business of the Enlarged Group. 
 
Furthermore, UBM does not currently have a research and development function
and Informa has no plans in this regard. 
 
Stability in Shared Service Centres 
 
Informa has no intentions to make any changes to the shared service centre
structure of either UBM or Informa.  This includes UBM's shared service
centres in Kent, Long Island and Hong Kong, as well as Informa's shared
service centres in Colchester, Cleveland, Sarasota and Singapore. 
 
7.         Financing of the Offer 
 
Informa intends to finance the cash consideration payable to UBM Shareholders
pursuant to the Offer from third party debt. 
 
Informa has entered into an acquisition facility with Bank of America, N.A. in
connection with the financing of the cash consideration payable to UBM
Shareholders pursuant to the Offer. 
 
Centerview Partners is satisfied that sufficient resources are available to
Informa to satisfy in full the cash consideration payable to UBM Shareholders
under the terms of the Offer. 
 
Further information on the financing of the Offer will be set out in the
Scheme Document. 
 
8.         UBM recommendation 
 
The UBM Directors, who have been so advised by Credit Suisse and J.P. Morgan
Cazenove as to the financial terms of the Offer, consider the terms of the
Offer to be fair and reasonable. In providing its financial advice to the UBM
Directors, each of Credit Suisse and J.P. Morgan Cazenove has taken into
account the commercial assessments of the UBM Directors. 
 
Accordingly, the UBM Directors intend to recommend unanimously that Scheme
Shareholders vote in favour of the Scheme at the Court Meeting and UBM
Shareholders vote in favour of the resolutions relating to the Offer to be
proposed at the UBM General Meeting (or in the event that the Offer is
implemented by Takeover Offer, to accept or procure acceptance of such offer)
as the UBM Directors who have beneficial holdings of UBM Shares have
irrevocably undertaken to do in respect of their beneficial holdings totalling
110,187 UBM Shares (representing approximately 0.02796% of existing issued
ordinary share capital of UBM on 29 January 2018, being the last Business Day
before the date of this announcement). Further details of these irrevocable
undertakings are set out in Appendix 3 to this announcement. 
 
Background to and reasons for the UBM recommendation 
 
In November 2014, UBM launched the Events First strategy to focus the group on
the attractive B2B events industry. Over the past three years UBM's management
team, under the leadership of Tim Cobbold, has been successfully implementing
that strategy, transforming UBM into a 'pure play' events business and
delivering a total shareholder return of 85.1% as at the last Business Day
before the commencement of the Offer Period (and therefore not reflecting any
impact of the Offer). 
 
The group's portfolio of businesses has been reshaped in line with this
strategy.  Significant progress has also been made towards improving the
group's operational effectiveness and efficiency, leading to both an
acceleration in growth and an improving operating margin that is trending
towards the group's medium-term margin target of 30%. 
 
The board of UBM expects the group's performance to continue to reflect the
attractive characteristics of the B2B events sector, with improving revenue
growth potential, margin expansion and strong cash generation. Accordingly,
the board of UBM believes that UBM remains well positioned to succeed as an
independent business. 
 
However, following the approach from Informa in October 2017 and after careful
consideration of its prospects as an independent business, the board of UBM
believes there are a number of compelling attractions to Informa's Offer which
was announced today. 
 
In considering the recommendation of the Offer to UBM Shareholders, the UBM
Directors have given due consideration to the assurances given to employees
within the UBM Group, as set out under "Colleague Commitments" in paragraph 6
above. The UBM Directors welcome the confirmation from Informa that the
existing contractual and employment rights, including existing rights under
UBM's defined benefit pension schemes, of the employees of UBM will be
safeguarded and that there are no plans to change the balance of skills and
functions of employees across the Enlarged Group. They also welcome Informa's
intention that the Enlarged Group will continue to comply with all of UBM's
existing defined benefit pension obligations. 
 
The UBM Directors note that in order to achieve the benefits from the creation
of the Enlarged Group operational and administrative restructuring will be
required and that there could be a reduction of approximately 3% of roles
across the Enlarged Group but acknowledge  that these reductions will be
partly mitigated by natural attrition and elimination of vacant roles as well
as medium term job opportunities. The UBM Board welcomes the confirmation from
Informa that it only anticipates limited consolidation of office space and has
no intention to make any changes to the places of business of the Enlarged
Group. 
 
Reasons for the UBM recommendation 
 
The board of UBM believes that the terms of the Offer are compelling for UBM
Shareholders in that it presents an attractive valuation for UBM and allows
UBM Shareholders to participate in ongoing value creation from the
combination. 
 
Terms of the Offer 
 
Under the terms of the Offer, UBM Shareholders would receive 1.083 New Informa
Shares and 163 pence in cash per UBM Share.  This represents a 29.9% premium
to the undisturbed share price on 15 January 2018, being the last Business Day
prior to the commencement of the Offer Period, and a 30.0% premium to the
3-month volume-weighted average price. 
 
Dividend 
 
The boards of Informa and UBM have agreed that UBM Shareholders will be
entitled to receive the Final UBM Dividend. In addition, UBM Shareholders will
be entitled to receive the Final Informa Dividend if the Effective Date occurs
prior to the record date for the Final Informa Dividend or, if the Effective
Date occurs later, a special dividend from UBM of an amount of 14.9454 pence
per UBM Share, being the Final Informa Dividend multiplied by 1.083 (the
number of New Informa Shares to be issued for each UBM Share) (the "Special
Dividend"). 
 
UBM Shareholders will also be entitled to receive (a) any ordinary course
interim dividend declared by UBM before the Effective Date, being an interim
dividend of up to 8.2 pence per UBM Share with a record date in September 2018
(the "Interim UBM Dividend"), and (b) by way of a special dividend from UBM,
an amount (if any) per UBM Share equal to 1.083 times the amount of any
further ordinary interim dividend(s) declared or paid by Informa with a record
date falling prior to the Effective Date, less the value of any Interim UBM
Dividend paid or to be paid by UBM (the "Balancing Dividend"). 
 
Ongoing value creation 
 
Under the terms of the Offer, UBM Shareholders will own approximately 34.5% of
the Enlarged Group, allowing UBM Shareholders to continue to participate
meaningfully in ongoing value creation from the combination of the two
groups. 
 
The board of UBM believes that a combination with Informa represents a
compelling opportunity to create an Enlarged Group capable of achieving
significant strategic, operational and financial benefits. The board of UBM
believes these benefits will accrue firstly from the combination of the two
large B2B events businesses, and secondly, from the creation of a large,
globally significant and financially strong, UK-listed B2B Information
Services Group - the Enlarged Group. 
 
The board of UBM believes there will be significant synergies generated from
the combination, with cost synergies derived from the elimination of cost
duplication and from scale efficiencies. The board of UBM also expects that
over time potential revenue synergies will accrue first from the complementary
industry verticals in which the two events businesses operate and subsequently
from initiatives across a wider Information Services group. 
 
The combination of the events businesses 
 
The combination of UBM and Informa's large events portfolios creates the
world's largest B2B events business, which will represent more than 50% of the
Enlarged Group revenues, and provide an attractive growth engine for the
Enlarged Group. 
 
The two events portfolios are highly complementary and combined, offer both
geographic leadership, sector and geographical diversity and industry vertical
breadth and depth. The combined portfolio would have positions in all of the
key events growth markets; specifically, USA, China, Middle East, ASEAN, South
America, and India. Specific industry vertical exposures will be strengthened
whilst exposures elsewhere will be diluted. 
 
Creating the largest events business in the world also provides scale
benefits. In addition to creating a leading team of event professionals with
geographic, industry vertical and events expertise, the combination will be
able to leverage the scale benefits of common platforms, technologies,
processes and customer-facing technology innovations. 
 
The creation of a large, globally significant, listed B2B Information Services
Group 
 
The Enlarged Group will have a market capitalisation of over £8 billion, and
is expected by Informa to be a constituent of the FTSE 100 Index, with
enhanced trading liquidity for the shares. The strong and attractive combined
balance sheet strength and free cash flow profile will allow for reinvestment
in the business, supporting new high-growth opportunities and the development
of existing assets.  Additionally, the expected strong cash generation allows
for continuation of an attractive dividend policy for Enlarged Group
shareholders. 
 
The Information Services sector is changing as the use of data accelerates and
the prevalence of technology increases. As this trend develops the board of
UBM recognises that the wider B2B Information Services sector will
increasingly reward those businesses that have the scale to support customers
across multiple channels and geographies whilst having the resources to deploy
the technologies and collect, generate and utilise data to better target and
support customers. 
 
Summary 
 
After careful and thorough consideration, the board of UBM believes the Offer
is in the best interests of UBM Shareholders and the broader group of UBM
stakeholders and therefore unanimously intends to recommend that UBM
Shareholders vote in favour of the Offer. In reaching its conclusion, the UBM
Directors considered the terms of the Offer in relation to the value and
prospects of UBM's underlying business, the potential medium-term value of UBM
Shares on a standalone basis, the financial and strategic benefits deriving
from a combination with Informa, and the strategic positioning and prospects
of the Enlarged Group. 
 
The UBM Directors, who have been so advised by Credit Suisse and J.P. Morgan
Cazenove as to the financial terms of the Offer, consider the terms of the
Offer to be fair and reasonable. In providing its financial advice to the UBM
Directors, each of Credit Suisse and J.P. Morgan Cazenove has taken into
account the commercial assessments of the UBM Directors. 
 
9.         Irrevocable undertakings 
 
Informa has received irrevocable undertakings from the UBM Directors who have
beneficial holdings of UBM Shares to vote in favour of the Scheme at the Court
Meeting and the resolutions relating to the Offer to be proposed at the UBM
General Meeting (and if the Offer is subsequently structured as a Takeover
Offer, to accept any offer made by Informa) in respect of their entire
beneficial holdings, amounting to aggregate holdings of 110,187 ordinary
shares representing approximately 0.02796% of UBM's existing issued share
capital on 29 January 2018, being the last Business Day before the date of
this announcement. 
 
Informa has also received irrevocable undertakings from Tim Cobbold and Marina
Wyatt, also UBM Directors, to vote in favour of the Scheme at the Court
Meeting and the resolutions relating to the Offer to be proposed at the UBM
General Meeting in respect of any UBM Shares received prior to the Voting
Record Time for the UBM Meetings as a result of their beneficial interests in
UBM's 2015 Share Incentive Plan and interests in options over UBM Shares
(being interests over 693,586 UBM Shares for Tim Cobbold and interests over
469,413 UBM Shares for Marina Wyatt). 
 
Further details of these irrevocable undertakings, including the circumstances
in which they fall away, are set out in Appendix 3 of this announcement. 
 
10.       Offer-related arrangements 
 
Confidentiality Agreement 
 
Informa Group plc and UBM entered into a Confidentiality Agreement on 21
December 2017 pursuant to which each of Informa Group plc and UBM have
undertaken to keep certain information relating to the other party
confidential and not to disclose such information to third parties, except to
the extent required for the purposes of considering, evaluating, advising on
or furthering the Offer. 
 
The obligations of each party under the Confidentiality Agreement will
terminate on completion of the Offer or, in the event that the Offer does not
complete, the date that is twelve (12) months after the termination of
discussions or negotiations between the parties in relation to the Offer. 
 
Confidentiality and Joint Defense Agreement 
 
Informa, UBM and their respective external legal counsels have entered into a
Confidentiality and Joint Defense Agreement dated 9 January 2018, the purpose
of which is to ensure that the exchange and/or disclosure of certain materials
relating to the parties only takes place between their respective external
legal counsels and external experts, and does not diminish in any way the
confidentiality of such materials and does not result in a waiver of
privilege, right or immunity that might otherwise be available. 
 
Clean Team Confidentiality Agreement 
 
Informa and UBM entered into a Clean Team Confidentiality Agreement on 9
January 2018, which sets out how any confidential information that is
competitively sensitive can be disclosed, used or shared for the purposes of
due diligence, synergies evaluation, planning the transition and integration
and regulatory clearance. 
 
Co-operation Agreement 
 
Informa and UBM have entered into the Co-operation Agreement, pursuant to
which Informa and UBM have agreed to use their reasonable efforts to satisfy,
as soon as reasonably practicable, the Conditions relating to regulatory and
other third party clearances set out in sub-paragraphs (b) to (g) of paragraph
4 of Appendix 1 to this announcement. 
 
Informa and UBM have agreed to certain undertakings to provide each other with
reasonable information, assistance and access in relation to the filings,
submissions and notifications to be made in relation to such regulatory and
other third party clearances. Informa and UBM have also agreed to provide each
other with reasonable information, assistance and access for the preparation
of the key shareholder documentation. 
 
The Co-operation Agreement records Informa's and UBM's intention to implement
the Offer by way of the Scheme. However, Informa may implement the Offer by
way of a Takeover Offer if: (i) UBM consents; (ii) a third party announces a
firm intention to make an offer for UBM; or (iii) the board of UBM withdraws,
qualifies or modifies its recommendation of (or intention to recommend) the
Offer. 
 
Informa is subject to certain customary restrictions on the conduct of its
business during the period pending completion of the Offer, and which
prohibit, among other things: (i) the payment by Informa of dividends (other
than in the ordinary course and consistent with past practice and save as set
out in this announcement) and (ii) the allotment of further shares (or rights
or options in respect of shares) (other than pursuant to employee share
incentive plans, or in order to satisfy options or awards vesting under those
plans). 
 
The Co-operation Agreement also contains provisions that will apply in respect
of the UBM Share Schemes and certain other employee incentive arrangements. 
 
The Co-operation Agreement shall terminate if (amongst other circumstances): 
 
(i)      if Informa and UBM so agree in writing; 
 
(ii)     if the Offer is withdrawn, terminated or lapses in accordance with
its terms prior to the Long Stop Date and, where required, with the consent of
the Panel; 
 
(iii)    if the Scheme is not approved by the UBM Shareholders at the Court
Meeting and/or the UBM General Meeting or the Court refuses to sanction the
Scheme; or 
 
(iv)    unless otherwise agreed by the parties in writing, if the Effective
Date has not occurred by the Long Stop Date. 
 
11.       Ratings and Outlook 
 
UBM has a Moody's long term issuer credit rating of Baa3 with stable outlook,
affirmed on 10 August 2017 when the outlook was changed to stable from
negative. UBM also has a corporate credit rating of BBB- with stable outlook
with S&P Global Ratings, affirmed on 19 January 2018. S&P placed UBM ratings
on CreditWatch positive on 19 January 2018 following announcement of a
possible offer by Informa. UBM's $350 million senior unsecured notes due 2020
are rated by Moody's/S&P Global Ratings at Baa3 and BBB- respectively. 
 
The Enlarged Group will target a profile consistent with an investment grade
status supported by a robust balance sheet, consistently strong cash flow
generation and a measured financial policy. 
 
12.       UBM Share Schemes 
 
All options under the UBM Share Schemes will vest in connection with the
Scheme in accordance with their terms. In determining the levels of vesting of
the awards under the UBM 2014 Performance Share Plan, the UBM Executive
Retention Plan and the UBM 2008 Executive Share Option Scheme, generally, the
awards will be rounded up to the next whole year before pro rating is applied
to them. In the case of awards under the UBM 2014 Performance Share Plan, the
remuneration committee of the board of UBM will determine the extent to which
the applicable performance conditions have been met and may take into account
expected future performance. 
 
UBM Shares in the UBM 2015 Share Incentive Plan will be treated in the same
way as UBM Shares held by other UBM Shareholders. 
 
The Offer will extend to any UBM Shares unconditionally allotted or issued
prior to the Scheme Record Time including shares issued pursuant to the
exercise of options granted under the UBM Share Schemes. 
 
Informa has agreed that UBM employees who are eligible to participate in
Informa's all-employee share incentive scheme, called ShareMatch, will be
invited to participate on the same terms as Informa employees in the same
jurisdiction following the Effective Date.  Where this is impractical in any
jurisdiction, Informa will consider alternative arrangements. In addition, UBM
employees will be considered for awards under Informa's discretionary share
plans using similar criteria for participation which Informa applies to its
own employees. 
 
Appropriate proposals will be made in due course to participants in the UBM
Share Schemes. 
 
13.       Dividend policy 
 
The board of Informa intends to continue paying shareholders a progressive
dividend, using Informa's dividend per share as the base. It will seek to
deliver consistent growth in 

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