FTSE 250 specialist information company, Ascential, has agreed to sell its exhibitions business to ITE Group for £300m in cash.
Following a strategic review of the business, Ascential concluded that a sale was in the best interests of all shareholders to allocate capital to higher growth digital brands.
Ascential said the continuing group is "well positioned" to execute on its strategy and drive growth by prioritising services that help customers succeed in the digital economy in the disciplines of product design, marketing and sales. This sale will also enable further steps in simplifying the way its organisation works to drive efficiency and synergies.
In the year to the end of December 2017, the exhibitions business generated revenues of £82.9m and adjusted earnings before interest, taxes, depreciation and amortisation of £23.3m.
Chief executive officer Duncan Painter said: "The strategic review of the exhibitions business was undertaken to ensure that we prioritize our time and capital on enabling our customers to succeed in the digital economy. We are therefore pleased to have found a good home and achieved a fair price for the exhibitions business. Winning in the digital economy is one of the biggest challenges our customers face and we want to ensure we are at the forefront of helping them achieve this."
Shore Capital analyst Roddy Davidson said this is a positive transaction for Ascential, which will further focus its portfolio of B2B business with strong organic growth prospects and will potentially provide the financial firepower for complementary acquisitions. Historic disposal multiples of 3.6x revenue and 12.9x EBITDA also look attractive, he said.
"More broadly, we like Ascential's focus on a relatively small number of quality brands which enjoy dominant market positions, demonstrable IP and strong cash flow. Based on our current forecasts we expect aggregate earnings per share and dividend per share growth of 16% and 13% over a two year view and see good potential for medium-term upgrades."
At 0810 BST, the shares
were up 0.6% to 422.60p.