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Events group Informa sees scope for more deals after UBM

By Esha Vaish

(Reuters) - Informa (INF.L), fresh from a 3.6 billion pound agreement to buy rival UBM (UBM.L), will look for bolt-on deals to exploit its enlarged range of business-focused exhibitions, it said on Wednesday.

A decade after their previous merger attempt failed, Informa in January agreed to buy UBM for 1.083 Informa shares and 163 pence cash per UBM share, gaining more exposure to events that allow firms to showcase their products and meet potential suppliers and business customers face to face.

The two companies both reported higher annual earnings on Wednesday.

Their merger will add UBM's 300 events portfolio that includes Black Hat security events and Game Developers Conference to Informa's 200 exhibitions such as Arab Health and Agrishow. Sixty percent of the enlarged group revenue will come from events.

Informa will look to buy up smaller events and exhibitions to fold into its biggest sector shows and take their brands into newer geographies, Informa Chief Executive Stephen Carter said.

"(It's not that) we are not alive to further opportunities internationally... but our primary focus will be on the successful combination and then the further development of the brands and the portfolio that we will have," he told Reuters.

The entrance of disruptors like Facebook (FB.O) has prompted companies to spend less on traditional newspapers and television advertising, but events businesses have thrived as companies look for ways to connect directly with customers.

Informa and UBM are also helped by their events being more focused on business-to-business customers. Their successes have prompted peer ITE (ITE.L) to sharpen its events focus.

On Wednesday, Informa said adjusted operating profit rose 31 percent to 545.5 million pounds last year, while UBM said profit grew 25 percent to 294.2 million pounds.

Informa's underlying revenue grew 3.4 percent, prompting a target to improve growth to more than 3.5 percent in 2018.

"There may be some underlying consensus upgrades coming through, both for Informa and also because the UBM events performance looks better than expected," Liberum analysts wrote.

They have a 855 pence target price on Informa and 910 pence on UBM.

Informa's shares were up 0.5 percent at 689.6 pence on Wednesday morning, while UBM's stock was up 0.4 percent at 909 pence. Based on Informa's Tuesday close, it will pay about 3.6 pounds for UBM.


(Reporting by Esha Vaish in Bengaluru; Editing by Sunil Nair and Keith Weir)