The initial consideration of $165m, consists of $100m in cash (net of indebtedness and working capital adjustments on completion) and a $65m vendor loan*. The cash element of the consideration will initially be used to reduce Group net debt. A further cash payment of up to $15m will be received by Informa in 2014 dependent upon the businesses achieving a certain level of revenue in 2013.
In the year ended 31 December 2012, the contribution attributable to the Corporate Training businesses was revenue of approximately $194m (£122m) and adjusted EBITA of $23.5m (£14.8m). As at 31 December 2012 the business had gross assets of $358.8m (£225.7m).
The Group believes the consideration is an attractive price for these assets in the current economic environment. The disposal is in line with Informa’s stated strategy to focus on high quality subscription assets, resilient events and businesses with strong digital and emerging market prospects. The Group continues to search for attractive opportunities in core growth areas such as exhibitions and data subscriptions and, in due course, would anticipate reinvesting some or all of the proceeds.
The disposal is subject to customary regulatory approvals and is expected to complete in the third quarter of 2013.
(*The vendor loan is for a maximum term of 6.5 years and attracts a PIK interest rate of 1% in the first two years, rising to 10% in the third year with a further 1% per annum increase thereafter.)
Peter Rigby, Chief Executive, said: “The disposal of our Corporate Training businesses creates a more focused, higher growth, higher margin Events division with more visible and predictable revenue streams, enhancing the underlying quality of Group earnings.
I would like to take this opportunity to thank all of our colleagues within Corporate Training who have worked so diligently and intelligently to develop the businesses through a highly challenging economic period. I believe Providence, with a significant investment already in the education sector, will be an excellent home for the businesses.”
Moelis & Company is acting as Informa’s financial advisor.
The Corporate Training businesses were acquired as part of the IIR Holdings acquisition, announced in June 2005. There are five separate business units, each focused on a particular segment of the corporate training market: Achieve Global, ESI International, Forum, Huthwaite and Omega. These assets were previously grouped under the divisional title of Performance Improvement.
The Corporate Training businesses will be classified as discontinued in Informa’s interim & full year consolidated results.
