Euromoney Institutional Investor plc, the London quoted B2B information company, is to acquire Wealth Engine Inc for $14.5m, some 7x EBITDA in 2020.
Wealth Engine is a software tool providing intelligence and analytics to wealth managers as well as non-profit and luxury goods users. The company profiles US individuals in order to identify potential donors and customers for its clients, with revenues primarily derived from subscriptions. The brand will join Euromoney’s “People Intelligence” subsidiary which recently acquired the ‘high net worth’ database Wealth X and which also includes BoardEx.
WealthEngine’s subscriptions revenue and pro-forma EBITDA for the year ending 31 Dec. 2020 financial year are expected to be $15m and $2m respectively. The acquisition is expected to be immediately earnings accretive for Euromoney.
In September, the £400m-revenue company annnounced plans to cut up to 240 jobs (about 10% of the total) to reduce costs by some £20m, principally in the events business ravaged by the pandemic.
Pre-pandemic, the company had engaged Goldman Sachs to sell-off its asset management business (comprising Institutional Investor, BCA Research and NDR) which had accounted for 39% of revenues and 44% of operating profit ‘contribution’. The business was effectively withdrawn from sale because, it was believed, there had been an insufficient level of interest in acquiring the whole division rather than individual parts.
The decision first to sell and then to retain such a large (but systemically challenged) part of the company is obviously a strategic issue as the company now seeks to add higher-value B2B business including commodity pricing agencies.
Euromoney’s share price is down 18% in the past year but has increased by almost 25% in the last month.
