Informa Plc, the £10bn UK-based B2B information and events, might not be celebrating its 25th anniversary this year. After all, this is post-pandemic recovery year for the hyperactive business that has kept investors and competitors on their toes ever since it was formed from the merger of newsletter publisher IBC and Lloyd’s List in 1998.
That deal eventfully brought together the two CEOs Peter Rigby and David Gilbertson. That was just the start of a company that has reinvented itself repeatedly during a quarter century when the value of business and professional information business has soared as a result of the same digital explosions that upset the profitability of many of their B2C counterparts. It’s not been dull.
It’s a story of The Eight Lives of Informa:
- It merged with listed academic publisher Taylor & Francis in 2004 to create a £500mn-revenue company with 2,500 subscription-based products and services, 2,800 events per year and databases of almost 10mn names. It was a bargain no-premium all-share merger.
- It acquired the £300mn-revenue privately-owned IIR conference and training business in 2005 for £768mn, which almost doubled the Informa headcount. It looked like a transatlantic stretch too far but worked.
- In 2007, it paid £513mn (27x EBITDA) for the business information and research group Datamonitor. Mike Danson was the lucky vendor to get a price equivalent to 27x EBITDA – but managed to buy back much of it eight years later for just £25m. It was the last big deal done by Rigby and Gilbertson, both of whom had left Informa by 2013.
- It had upset investors by failing to agree a merger with UBM and, in 2006, by rejecting an offer from private equity-owned Springer at a valuation that Informa would not reach for a whole decade after. The apparent loss of investor confidence in the company’s senior executives was especially ironic since both had tried vainly to get their board colleagues to accept the Springer offer. But it was the end of an era, signalled first by Gilbertson’s departure and, in 2013, by Rigby’s retirement.
- Stephen Carter was appointed CEO. Following a series of trade show acquisitions especially in the US, he paid £3.9bn for UBM in 2018 to make Informa the world’s largest exhibitions organiser with a claimed 24 of the top 250 exhibitions in the US and 150 brands globally. But…
- The Covid pandemic 2020-21, among much else, upset the exhibitions strategy, forced Informa quickly to raise funds from a share issue and then to sell-off some of its more attractive intelligence operations. It succeeded in raising a total of £2.5bn from divestments (including a heady $1.9bn (36 x operating profit) for its Pharma Intelligence. The sell-off also included Lloyd’s List, one-time foundation stone of Informa. The smart deals reassured investors and enabled the resumption of shareholder dividend payments as the the pandemic receded.
- In 2022, it acquired the fast-growing, 10-year-old US-based B2B newsletter publisher Industry Dive for for an expected total of $500mn – 15x EBITDA or 5x 2022 revenue.
- In 2023, with trade shows recovering around the world, Informa acquired Tarsus Group (also 25 years old) from Charterhouse private equity for $940mn. Taking into account biennial events, the price may be about 14x EBITDA for the livewire exhibitions company which – like Informa itself – had concentrated on launching and acquiring major events (eg Labelex and the Dubai Air Show) in high-growth areas including China/Asia, the US and the Middle East. It’s a good fit and Charterhouse is pleased too with the cash and shares deal for a company it had bought for $708mn in 2019 and has spent up to $100mn on bolt-on acquisitions. Even with profits that may not exceed pre-pandemic levels until ext year, the vendor has made a return on its investment in Tarsus that had – to say the least – seemed unlikely at this stage of the recovery. Given its 22% of the consideration in Informa shares (the price is some 10% up so far) and also a $45mn share bonus if / when its share price reaches £8.50 (some 20% above the current price), Charterhouse expects to profit from the continuing recovery and from the $20mn of annual operating synergies forecast to increase the Tarsus profits by up to 30%.
So what will be the 9th chapter in the eventful life and times of Informa Plc?
The company is forecast this year to achieve revenue of £2.8bn and operating profit of £726mn, 18% and 36% respectively ahead of 2022. Next year, revenue could be at least £3.2bn – 10% ahead of pre-pandemic 2019. Exhibitions will have rebounded and be likely to generate some 60% of total profit. The fact that the trade show market continues to be fragmented (even Informa as the leader only has a 8% market share) continues to give it scope for further acquisitions. But there may be something else on the mind of CEO Carter as his company starts to accelerate.
Many exhibition organisers doubt it will be ‘business as before’ for trade shows. For all the post-pandemic realisation that face-to-face events do have a unique role, scarcely threatened by many ho-hum digital experiments, there are some factors that may affect the future profitability of global events, including:
- ESG pressure to minimise the cost and maximise the effectiveness of business-related travel, hospitality and entertainment
- Continuing health fears and travel restrictions in some countries
- The increased cost of air travel in many markets
These factors may affect the pricing, duration of events and – perhaps – the very survival of all but the biggest exhibitions in some industries. But, for all the disappointments, the trialling of digital media during lockdown has encouraged business people to see the value of its integration with live events and/or to maintain year-round communications and networking. While some organisers believe that digital-controlled meetings might actually replace the random experience of visitors to trade shows, the greatest likelihood is – again – that they would simply become part of the offering, like conferences and seminars.
It all contributes to a sense in which trade show organisers may have to work much harder actually to prove the economic benefit of events. They might need to do more to limit the ‘arms race’ where exhibitors try to out-spend each other, arguably to the eventual benefit only of the organiser. They might uniformly do even more to ensure that exhibitors maximise the value of their contact with their desired visitors and vice versa. Serendipity might be part of the appeal of live events but many exhibitions may need to leave much less to ‘chance’.
Organisers may need to find fresh ways to measure, prove and audit the cost-effectiveness of events especially as part of the sought-after 365-day communication with customers. After all, many of the world’s media advertisers are now accustomed to paying prices pegged to the actual audience delivered. Live events may be different but…
We have repeatedly drawn attention to the potentially valuable statistical data that is ‘missing’ from many B2B verticals, partly as a result of the longterm decline of trade and business magazines. If you doubt the possibilities, just consider that almost every market sector would value a real-time indicator of business conditions and ‘traffic’ levels. Then, try to find such data in any sector in which you are interested and, of course, there are many other types of valuable stats ‘missing’ too. You might be surprised at the gaps.
Then there’s the growing appetite for networks (like World50, EGN, Peer150, CharterGroup, and Senior Executive Network) enabling business people to engage with each other either in their own markets or beyond. As a business publisher or trade show organiser, just imagine how such networks could enhance the appeal of an event, increase the loyalty of customers and increase profitability.
Such activities will require some new skills and resources for trade show companies but they could be the perfect complement at a time when exhibitor budgets are under fresh scrutiny. But the important emphasis is that any of these high-value services must be just that – not merely promotional media.
The potential is why we might predict the 9th life of Informa, as the world’s largest trade show organiser. The clue is its Informa Tech division which this year is forecast to generate some £405mn revenue (14% of the Informa total) and £78mn operating profit (11%) from a portfolio of media, research, events and lead gen for professionals in the tech and communications industries. It is managing events, media and data together in the way that many specialist companies once did and some still do. But they’re deep in high value data and research.
With Informa having developed its IIRIS proprietary system to manage first-party data across its whole portfolio, it seems clear that its Tech division could be a template for multi-media operations in other key sectors.
It seems at least possible that Informa will (this year or next) roll-out this integrated approach to its media-events in two of its largest and fastest-growing markets: healthcare and aviation (both enhanced by the recent Tarsus acquisition).
Over time, that could be the real change in how trade shows are managed. It would be real progress. And, once the new strategy is underway and trade shows have resumed their pre-pandemic growth trajectory, Informa might just feel able to go for a £3-4bn sale (yes) of its subscription-rich Taylor & Francis academic publishing.
That would be a fitting way to celebrate Informa’s 25 eventful years, in the new era of trade shows.