Britain's Informa to boost U.S. presence with Penton deal

By Noor Zainab Hussain

(Reuters) - British business information group Informa Plc (INF.L) said on Thursday it had agreed to buy U.S.-based information services company Penton for 1.18 billion pounds ($1.56 billion) to expand in the United States and grow its global exhibitions business.

The transaction is set to be funded by a combination of new debt and equity, including a fully underwritten rights issue to raise 715 million pounds.

Informa said it will buy Penton from private equity firms MidOcean Partners and Wasserstein & Co, which will receive 1.11 billion pounds in cash and 76 million pounds in Informa equity.

The deal will help Informa generate nearly half its annual pro-forma revenues from the United States and make its global exhibitions division one of the three largest in the country, with more than 70 U.S. shows annually.

"We want to grow in exhibitions and trade shows, business intelligence and information services. We see the natural next rotation step for growth as being the United States," CEO Stephen Carter told Reuters.

Penton owns brands in aviation, agriculture, natural food products, infrastructure, and technology, media and telecommunications sectors, Carter added.

Informa, which also publishes real-time news, research, market data and academic books, bought U.S. trade show operator Hanley Wood Exhibitions in 2014. (http://reut.rs/2d1RjnO)

Informa's global exhibitions business runs 170 trade and consumer events annually, including the China Beauty Expo, World of Concrete and Arab Health. The division accounted for about 22 percent of revenue in 2015.

"We see the deal as a major positive for Informa, being earnings accretive and increasing its exposure to geographically and divisionally attractive areas," Liberum analysts said.

The deal, expected to close in November, would add to the company's earnings in the first full financial year since completion. Liberum expects the addition of Penton to add 7-8 percent to Informa's earnings in 2018.

Informa's shares closed up 4.9 percent at 709.7 pence on the London Stock Exchange.

Analysts also expect attention to switch to other potential events merger and acquisition targets including UBM Plc (UBM.L) and Tarsus Group Plc (TRS.L).

For the private equity firms that owned Penton for a decade, the sale represented a positive outcome, six years after Penton had filed for bankruptcy.

Wasserstein & Co first invested in the company in 2005 when it bought Primedia, a media company that later merged with Penton. It will generate 4.2 times its investment. MidOcean Partners, which invested in 2007, will see a return of 3.5 times, sources familiar with the matter said.

Morgan Stanley, Centerview Partners, Rothschild and Barclays Bank PLC advised Informa.

($1 = 0.7553 pounds)

(Reporting by Noor Zainab Hussain in Bengaluru and Liana B. Baker in San Francisco; Editing by Sunil Nair and Will Dunham)