Financial publisher Euromoney Institutional Investor has accepted a £1.7bn takeover bid from private equity groups Astorg and Epiris, in one of the few take-private deals to be agreed at a time of market turmoil.
The FTSE 250-listed company’s board has accepted the buyout offer, which would split the business in two, and will put it to shareholders, Astorg said on Monday.
The deal values Euromoney’s shares at £1.6bn and gives it an enterprise value of £1.7bn. That is about 21.5 times its earnings before interest, tax, depreciation and amortisation for the year to September 2021, a relatively high figure for a buyout deal. It is above last year’s average for take-private deals of 19.3 times, according to a report by Bain & Co.
Under the deal, Astorg would take control of Euromoney’s Fastmarkets division, which provides price reporting for raw materials such as wood and metals. Epiris would take its other divisions, the asset management business which includes publishing its Institutional Investor magazine, and the financial and professional services arm that runs the BoardEx and Wealth-X information services.
“I appreciate that this sort of change is unsettling,” Euromoney chief executive Andrew Rashbass said in a letter to staff and seen by the Financial Times. The business is due to be split within a year of the deal and “unfortunately some central roles will no longer be required”, he said.
Rashbass added that Euromoney’s board had “firmly rejected” four lower offers from the buyout groups but “in the end . . . had to ask itself whether, taking into account the economic and geopolitical uncertainty in the world, the board could be confident of delivering enough value quickly to shareholders compared with the certainty of a sale at a good price now”.
The £14.61 per share bid price is 33.5 per cent above Euromoney’s closing price before the private equity offer was announced.
The buyout groups are particularly drawn to Euromoney’s subscription revenues, which rose 7 per cent in the nine months to June 30, according to a trading update published on Monday.
The sale has been approved at a time when dealmaking has slowed significantly, as inflation, interest rate rises and the war in Ukraine hit confidence. Major deals, such as the planned sale of UK chemist chain Boots by US parent Walgreens Boots Alliance, have fallen through because of difficult conditions including the rising cost of borrowing to fund leveraged buyouts.
Global mergers and acquisitions activity fell 21 per cent in the first half of this year compared with the same period in 2021, figures from Refinitiv show.
Astorg and Epiris’ previous offers for Euromoney ranged from £11.75 to £13.50 per share. Their latest offer would need the support of 75 per cent of shareholders in order to go ahead.
“We continue to believe the fundamental value of the company is higher than the 1461p offer,” analysts at Investec said in a note on Monday, although they added that “tightening debt markets may have moderated expectations”. Analysts at Berenberg said they expected shareholders to accept it.
The UK company, which owns the Euromoney financial magazine and runs exhibitions, was hit by the pandemic but has previously said growing demand for its data services helped it recover. Its finance chief Wendy Pallot said in October that it was planning an acquisitions spree.
Euromoney’s shares rose 9.5 per cent to £14.52 after the announcement on Monday.
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