Events organiser and publisher Informa has agreed to sell 85 per cent of its pharma intelligence business to New York-based investment fund Warburg Pincus for £1.9billion.
Shares in the world’s largest exhibitions group rose as much as 5.4% per cent to their highest level since November 2020 off the back of Thursday’s announcement.
The London-based company confirmed it is planning to return a portion of the proceeds to shareholders through a share buyback.
Events organiser Informa has agreed to sell 85% of its pharma intelligence business to New York-based investment fund Warburg Pincus for £1.9 billion
Pharma Intelligence, which provides data on clinical trials, drug treatments and medical devices, accounted for about 40 per cent of Informa’s Intelligence division in 2020, making a pretax profit of £55.3million.
Informa said it would retain about 15% of the business after the deal closes, which is expected by early June subject to regulatory clearances.
It will then turn its attention to selling its financial intelligence business.
‘We intend to invest and significantly grow the business and its product offerings,’ Adarsh Sarma, co-head of Europe at Warburg Pincus said in a statement.
Meanwhile, CEO of Informa Stephen Carter said: ‘Since announcing the intention to divest our Informa Intelligence portfolio, we have received significant interest in its high-performing brand portfolio, leading to today’s binding agreement for Pharma Intelligence, which reflects the quality and value created in this business, as well as its significant future potential.’
He added: ‘Our capital allocation discipline, combined with the pace and scale of today’s agreement, allows us to commence our share buyback programme with immediate effect.
‘It also enables us to strengthen the balance sheet, generate funds for further growth investment in our two leadership businesses and retain a minority position in Pharma Intelligence to benefit from its future growth. ‘
Informa, which had previously announced plans to return a part of the divestment proceeds to shareholders, also said the maximum amount allocated to the initial tranche of the buyback programme will be £100million.
Ahead of its annual results on 15 March, the group confirmed it expected 2021 earnings in line with forecasts, set at over £1.8billion for revenues and more than £375million for adjusted operating profit.
