Informa, the UK-listed exhibitions and information group, is selling its Pharma Intelligence to Warburg Pincus private equity for £1.9bn – equivalent to the total sum that the company had expected for the divestment of all its subscription-based B2B operations in pharma, finance, and maritime.
The divestments follow the US sales of Informa’s Asset Intelligence Group. Informa will retain a 15% share in the pharma business which had £122m revenue/ £52m operating profit in 2020.
It is now believed that the finance and maritime intelligence groups – with a combined revenue/ profit of £183m/£50m – will be sold for some £800m. The finance divestment is believed to be in negotiation, with maritime scheduled for “later in the year”.
In total, the three divestments are, therefore, expected to raise funds equivalent to almost 30% of the Informa market cap, a nice reward for the patience of shareholders during the pandemic which paralysed the world-leading exhibitions portfolio. Even now, as trade shows gradually resume, many people are not expecting a return to the 2019 peak until 2023 or even 2024.
The pharma divestment, in particular, has always seemed to reflect shareholder tactics more than corporate strategy: it is the one broad market which overlapped with both of what are now the Informa core business, ie exhibitions and academic/ scientific publishing (Taylor & Francis). But, with these prices, CEO Stephen Carter again gets the credit for bringing debt under control and looking after shareholders.
At much lower multiples, Informa may now sell-off its 18% share in the PA news agency group and 20% of Independent Television News, legacies of a distant past in newspapers and TV. The two companies have some common shareholders.
We might, however, have to wait longer for the next upheaval.
There is no current suggestion that Taylor & Francis will be sold and current digital investment is making it more valuable. At this stage of the slow recovery in exhibitions, that seems like a comfortable position for Informa. But it also seems reasonable to predict that any kind of return to the pre-pandemic growth levels of trade shows might just prompt divestment of the slower growth T&F. The creation of an exhibitions pureplay will again become attractive to investors – eventually.
We hesistate to re-state our longtime suggestion that RELX could be interested in exchanging its RX exhibitions group for Taylor & Francis. That might, of course, depend on the state of the exhibitions market. The better that RX does (and it got back to breakeven in 2021, according to figures released this week) the more tricky might be any plan to combine the world’s two largest trade show organisers. At this stage, we might not read too much into RELX’s cautious words about exhibitions or Informa’s more bullish tone. Long way to go.