Informa PLC: Disposal of its five Corporate Training businesses
Informa PLC (“Informa” or the “Group”), a leading Academic Publishing, Business Information and Events Group, today announces it has signed a definitive agreement to sell its five Corporate Training businesses to Providence Equity Partners (“Providence”) for a total consideration of up to $180m.
The initial consideration of $165m, consists of $100m in cash (net of indebtedness and working capital adjustments on completion) and a $65m vendor loan*. The cash element of the consideration will initially be used to reduce Group net debt. A further cash payment of up to $15m will be received by Informa in 2014 dependent upon the businesses achieving a certain level of revenue in 2013.
In the year ended 31 December 2012, the contribution attributable to the Corporate Training businesses was revenue of approximately $194m (£122m) and adjusted EBITA of $23.5m (£14.8m). As at 31 December 2012 the business had gross assets of $358.8m (£225.7m).
The Group believes the consideration is an attractive price for these assets in the current economic environment. The disposal is in line with Informa’s stated strategy to focus on high quality subscription assets, resilient events and businesses with strong digital and emerging market prospects. The Group continues to search for attractive opportunities in core growth areas such as exhibitions and data subscriptions and, in due course, would anticipate reinvesting some or all of the proceeds.
The disposal is subject to customary regulatory approvals and is expected to complete in the third quarter of 2013.
*The vendor loan is for a maximum term of 6.5 years and attracts a PIK interest rate of 1% in the first two years, rising to 10% in the third year with a further 1% per annum increase thereafter.
Peter Rigby, Chief Executive, said:
“The disposal of our Corporate Training businesses creates a more focused, higher growth, higher margin Events division with more visible and predictable revenue streams, enhancing the underlying quality of Group earnings.
I would like to take this opportunity to thank all of our colleagues within Corporate Training who have worked so diligently and intelligently to develop the businesses through a highly challenging economic period. I believe Providence, with a significant investment already in the education sector, will be an excellent home for the businesses.”
Moelis & Company is acting as Informa’s financial advisor.
Enquiries
Informa PLC
Peter Rigby, Chief Executive +41 (0) 41 444 1341
Adam Walker, Finance Director +41 (0) 41 444 1343
Richard Menzies-Gow, Investor Relations +44 (0) 20 3377 3445
FTI Consulting
Charles Palmer +44 (0) 20 7269 7112
Notes
1. The Corporate Training businesses were acquired as part of the IIR Holdings acquisition, announced in June 2005. There are five separate business units, each focused on a particular segment of the corporate training market: Achieve Global, ESI International, Forum, Huthwaite and Omega. These assets were previously grouped under the divisional title of Performance Improvement.
2. The Corporate Training businesses will be classified as discontinued in Informa’s interim & full year consolidated results.
3. Informa will receive an additional $15m in cash above the initial consideration of $165m if the Corporate Training business achieves 2013 revenue equivalent to 2012 reported revenue (approximately $194m). If business revenue of only $189m is achieved, additional consideration of $5m will be received. Additional consideration will increase on a linear basis from $5m to $15m between business revenue of $189m and $194m.
4. The vendor loan element of the initial consideration of $165m will be reduced by $15m if the Corporate Training business does not achieve a minimum level of business revenue in 2013 of $180m. There will be no reduction in the vendor loan if 2013 business revenue exceeds $185m. The reduction in the vendor loan will decrease on a linear basis from $15m to $5m between business revenue of $180m and $185m.
5. USD/GBP 2012 average exchange rate of 1.5898.
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Cautionary Statements
This announcement contains forward looking statements. These statements are subject to a number of risk and uncertainties and actual results and events could differ materially from those currently being anticipated as reflected in such forward looking statements. The terms 'expect', 'should be', 'will be', ‘anticipate’ and similar expressions identify forward looking statements. Factors which may cause future outcomes to differ from those foreseen in forward looking statements include, but are not limited to: general economic conditions and business conditions in Informa's markets; exchange rate fluctuations, customers' acceptance of its products and services; the actions of competitors; legislative, fiscal and regulatory developments; changes in law and legal interpretation affecting Informa's intellectual property rights and internet communications; and the impact of technological change. These forward looking statements speak only as of the date of this announcement. Except as required by any applicable law or regulation, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained in this document to reflect any change in the Group's expectations or any change in events, conditions or circumstances on which any such statement is based.