The London-based AgriBriefing is gearing up for M&A after selling-off its original UK business. This is what we now know about the divestment that effectively halved the B2B information provider:
- The EagleTree-backed Arc Media Holdings paid £20.5m – 10 x EBITDA and 1.6 x revenue – for: Farmers Guardian, Dairy Farmer & Arable Farming, and the events LAMMA, CropTec and the British Farming Awards.
- In 2020, these UK assets accounted for 44% (£12.3m) of AgriBriefing’s £27.7m revenue, 26% (£2m) of operating profit, and 50% of its 180 people.
The August 2021 sale to Arc was accompanied by upbeat assertions that AgriBriefing would be generating some 80% of its revenue from subscriptions and would focus on its global pricing, analytics, forecasting, market data and consulting units based on the digital enterprise subscription services Urner Barry, Feedinfo, Stratégie Grains (acquired in 2021 for €2m), Agrimoney, Foreign Trade Data, Seafood News, Foodmarket and Obsono, “which provide proprietary data and intelligence on the estimated US$5tn global trade in agricultural commodities, food and biofuel”.
The 10 x multiple was, to say, the least, a good vendor price for a business dominated by the Farmers Guardian newspaper. That little detail had been a stumbling block in AgriBriefing’s ambitious 2019 deal to “merge” with two larger, all-digital counterparts.
Despite the price, the deal gave the new Arc (led by former UBM executive Simon Foster) a promising platform from which to acquire and launch events, especially in the UK. It was win-win.
Just as we were wondering what follows the seemingly unlikely event of a CEO agreeing to divest almost half his company, the highly-rated Rory Brown announced the appointment of a new European Managing Director, Julien Hardwick who has deep international financial markets experience for companies including S&P Global, CME, and Thomson Reuters.
Try not to be surprised but the company which has cut itself in half has appointed a senior executive to under-study CEO Brown, one of the troika that impressively bought and built AgriBriefing from the unlikely platform of… Farmers Guardian, acquired from UBM almost 10 years ago.
He said this week: “We are building the largest pureplay pricing, consulting, forecasting and market data business in agri-commodities globally”.
In deciding to sell the UK operation, AgriBriefing’s private equity owners knew they were strengthening the value of the remaining data businesses in France and the US (by freeing them from the drag of print) and creating the best opportunities – either for selling or buying. There will now be pressure to get something done.
The pe companies Horizon Capital, of the UK, and Ares Management, of the US, together valued AgriBriefing at £123m just over two years ago – when soaring exhibition values might have been expected to boost the eventual UK divestment price by at least 50%. But that was pre-pandemic. Given that the remaining AgriBriefing assets cost Horizon and Ares some £100m but have EBITDA of perhaps £6-8m, the investment may be under water. AgriBriefing must be searching for a transformative deal. That’s where its newly -strengthened management team comes in.
The Horizon-Ares shopping list might include the Agribusiness division of IHS Markit, believed to be valued at more than £150m. Markit had paid £70m ( 2 x revenue) for Informa Agribusiness Intelligence which operates in the US, Canada, Brazil, UK, Belgium, Germany, Hong Kong and Australia. At the time of the Informa deal – in which Markit’s TMT assets were exchanged at a similar value – Markit CEO Lance Uggla had said: “The Informa Agribusiness Intelligence portfolio is a clear extension of our Chemical and Downstream businesses and builds our existing data, pricing, insights, forecasting and news services within our Resources segment. Agriculture is the largest end-chemical market in the world and this transaction expands our capabilities into fertilizers and chemical crop protection while substantively expanding our capabilities in biofuels.”
But that was before the late 2020 announcement of IHS Markit’s merger with S&P Global. It may now be a clear opportunity for AgriBriefing which had – in 2019 – attempted that three-way merger with Informa Agribusiness and the private equity-owned Kynetec. The UK-based Kynetec is a £77m-revenue UK-based, agriculture research specialist which now shares with AgriBriefing a US bias – and also a private equity involvement with Ares Management.
Combining the IHS Markit agribusiness and/or Kynetic with AgriBriefing would create the global food and farming data business of their dreams. It might be more tricky but so too would the Agriculture division of the £1.2bn Euromoney. The growing-again listed UK company acquired AgriCensus in 2020 and now provides over 1,000 proprietary prices in food and farming. It’s a significant part of Euromoney’s burgeoning Fastmarkets price reporting (including metals, mining, and forest product) accounting for more than 25% of revenue but 45% of the profit. It’s their best business.
That’s why Euromoney is a more likely buyer of AgriBriefing than a seller. The same may apply to the $2bn Argus Media, the leader among the highly-valued Price Reporting Agencies (PRA) whose “official” prices govern trading in the world’s commodity markets. But AgriBriefing’s pe owners won’t worry about whether they are buying, selling or merging their assets to create a global business and values to match. They might even be thinking of buying the UK-based CRU and becoming a broader PRA rival to Argus et al. There’s so much potential now they’ve ditched the print.