Informa Plc, the world’s largest trade show organiser, is paying $940mn in cash and shares to acquire the $210mn-revenue private equity-owned Tarsus Group in a move which confirms its confidence in the recovery – and that pre-pandemic valuations are back.
In spite of Informa calculations that the deal price is a 9.9x multiple of 2023-24 EBITDA, it’s an estimated 16x multiple of 2022-23. But, given the biennial nature of some major Tarsus exhibitions, it is more meaningful to use a blended multiple covering 2022-23 and 2023-24 – which would give a multiple of 14x EBITDA.
That compares with the $708mn (12x $60mn EBITDA) paid by Charterhouse private equity in 2019. Even with up to $100mn of acquisitions and profits that may not exceed pre-pandemic levels until next year, Charterhouse has made a return on its investment in Tarsus that had seemed unlikely at this stage of the recovery. Given the share component of the Informa deal and also a $45mn share bonus if / when its share price reaches £8.50 (some 20% above the current price), the private equity firm expects to profit from the continuing recovery and from the $20m of annual operating synergies expected to increase the Tarsus profits by up to 30%.
| $mn Tarsus Group | 2023** | 2022 | 2021 | 2020 | 2019 |
| Revenue | 210 | 135 | 105 | 55 | 180 |
| EBITDA | 57 | 27 | 18 | (14) | 60 |
| Margin | 27% | 20% | 17% | — | 33% |
The acquisition was not the result of a sale process but a pre-emptive bid by Informa which made a direct approach to a surprised Charterhouse team in January. (It had reportedly attempted to acquire Tarsus twice previously.) After initial discussions, Informa was keen to complete the deal within six weeks to enable the announcement yesterday (9 March) with its 2022 financial results. Pow.
Tarsus owns and operates a portfolio of 160+ live and virtual B2B events. Its 10 largest brands – attracting a total of 500k+ visitors and 8,350 exhibitors across 385k net sq m of floor space – are said to “expand Informa’s Tier 1 portfolio to more than 85 brands” each with revenue of more than $5mn.
Informa said the two portfolios were complementary, both geographically and by market category, strengthening its position across a number of verticals including:
- Beauty & Aesthetics: A4M, LiVDerm, South Beach Symposium
- Healthcare: Health Connect Partners, PAINWeek, Cardiometabolic Health Congress
- Packaging: LabelExpo (US, Mexico, Europe, China, Thailand, India)
- Infrastructure: Intertraffic, Rail+Metro, Infrastructure Connect, Cambuild
- Aviation: Dubai Airshow, MEBAA Show, Space Tech Expo
- Sustainability: Intersolar, Mexico Wind Power, Aquatech Mexico
- Homewares: Home Furnishing Expo Shenzhen (Hometex), Zuchex
- Fashion: SIUF Show, OFFPRICE
In the four years since its acquisition by Charterhouse, Tarsus has expanded with 24 launches and 11 acquisitions at an eventual investment cost, depending on earnout results, of $60-100mn. (Informa will now be paying whatever comes due on the outstanding $40mn.)
Tarsus was particularly active in China which will eventually account for some 25% of its revenue (2019: 10%). That is only one element of Tarsus’ strategic distinctiveness. Once China re-opens fully (expected in second-half 2023), Tarsus will be concentrated heavily in the US/ Mexico, the Middle East, and China. It does not have any events in the UK.
Tarsus had said it bounced back to 75% of its pre-pandemic revenue in 2022 – despite the virtual absence of China earnings.
The formerly listed company had been launched by former Blenheim Exhibitions chief Neville Buch in 1998 and IPOd in 2007 before being acquired by Charterhouse 12 years later. It is one of the world’s top 20 exhibition groups and its principal events are in: aerospace, labels print and packaging, travel, medical, and textiles. Its major brands include: Dubai Air Show, Labelexpo, GreenTech, Space Tech Expo, and PainWeek. Douglas Emslie, who was formerly with Blenheim and UBM, has been CEO since the start. He will be an advisor to Informa throughout the transition of the business before leaving – after 25 years.
It is five years since Informa overhauled RX (formerly Reed Exhibitions) to become the trade show market leader, courtesy of its £4bn acquisition of UBM. Then came the 2020 pandemic which threatened to wreck its carefully developed strategy. What saved Informa was, arguably, the speed of its action in raising shareholder funds to cope with the suspension of trade shows and also its success in divesting what had been core pharma, maritime and engineering intelligence operations for a total of £1.7bn.
The early signs of investor approval for Informa’s strategy of recovery under CEO Stephen Carter are that – before the Tarsus deal this week – the company had a market cap of £9.5bn – closing up on the £10.7bn in 2019; 2024 revenue is expected to exceed the 2019 total. Following their temporary suspension, dividend payments to shareholders have been resumed and earnings per share increased by 92% in 2022.
Informa’s 2022 results showed growth of 43% in revenue and 59% in operating profit from continuing businesses:
| £mn Informa Plc | 2022 | 2021 | 2020 | 2019 |
| Total revenue (Exhibitions %) | 2,262 (42%) | 1,583 (38%) | 1,661 (32%) | 2,890 (50%) |
| Operating profit (Exhibitions %) | 496 (35%) | 313 (21%) | 268 (loss) | 933 (53%) |
| Margin | 22% | 20% | 16% | 32% |
It’s been an intensely painful three years, of course. But investor support for the $525mn acquisition of the US-based Industry Dive last year – and, now, for Tarsus – shows Informa is on track. It’s predicting 2023 revenues in line with 2019. Carter told Reuters that 2024 revenue will be “noticeably bigger than pre-pandemic.”
Whisper it but the rebound may yet lead to the de-merger or sale of its Taylor & Francis academic publishing which accounted for 25% of Informa revenue and 39% of operating profit in 2022. The prospects of a pureplay exhibitions group might depend on trade show growth, stockmarket ratings and on Informa’s next major B2B event/ data acquisition. They’re back.
