UBM acquires Advanstar Communications for $1bn
Events and communications group UBM has agreed to acquire Advanstar Communications for $972m (£599m), making it the largest events company in the US by revenue.
UBM
1,080.00p
16:44 15/06/18
The deal, which is expected to be immediately accretive to earnings per share in 2015 with strong returns for shareholders, will be financed from a planned £563m rights issue and a new $100m UBM bridge facility.
Shares in UBM dropped as investors and traders took a dim view of the price. Analysts at Investec said it "looks a high price" for a mature asset and a "a big and brave strategic move" for new chief executive Tim Cobbold.
The move will increase the group's focus on events and is expected to increase the division's revenue of £463m produced in 2013 by a further £135m.
"This is a great acquisition for UBM and its shareholders," said Cobbold.
"In addition to being financially attractive, it strengthens UBM's core events business while balancing and complementing UBM's strong events portfolio in emerging markets. UBM will become the largest events organiser in the US - the biggest events market in the world."
The group anticipates the addition of Advanstar will give it a portfolio of high quality, large scale 'must-attend' events which serve growing markets, particularly the US fashion industry, a new area for UBM, which also owns PR Newswire.
Shares in UBM were down 4.2% to 558.5p at 08:43 on Wednesday.