Informa has made a £2.24 billion bet that the future of the company lies in getting people into conference halls rather than putting academic research into journals.
Investors appear to agree.
Shares in the FTSE 100 exhibitions group jumped around 4% on Tuesday after it agreed to buy Clarion Events from private equity giant Blackstone, while simultaneously announcing plans to separate Taylor & Francis, its academic publishing business.
By mid-afternoon, Informa was trading at about 896p, up roughly 4%, making it one of the stronger performers in the FTSE 100.
That's interesting because Informa is asking shareholders for a lot of money, which usually puts the lid on the share price.
So what has Informa actually done?
There are two moving parts.
First, Informa is buying Clarion from Blackstone for an enterprise value of £2.24 billion.
Clarion owns more than 100 business-to-business event brands spanning electronics, defence and security, gaming, energy and technology.
Its better-known properties include electronics show IFA Berlin, defence exhibition DSEI, gaming event ICE and energy conference Distributech.
Informa expects Clarion to generate more than £575 million of revenue in 2027, with an adjusted operating margin above 30%, according to the company's announcement.
That implies adjusted operating profit of at least £173 million.
On that rough calculation, Informa is paying less than 13 times Clarion's expected 2027 operating profit before allowing for any benefits from combining the businesses.
For an events business capable of 30%-plus margins and operating in markets Informa believes can grow substantially, that does not immediately look extravagant.
How is Informa paying for it?
This is where existing shareholders come in.
Informa is raising approximately £940 million of new equity, equivalent to roughly 9% of its existing share capital.
The money will come through an institutional placing, a RetailBook offer for UK retail investors and subscriptions by directors and senior management.
The rest of the purchase price will come from committed acquisition financing.
The company has also paused its share buyback programme so the cash that would have gone into repurchasing shares can instead be directed towards the Clarion transaction.
The full financing details are contained in Informa's placing announcement.
In plain English, shareholders are being diluted by around 9%, the buyback has stopped and Informa is taking on additional borrowing.
Normally that combination might be expected to knock the shares lower.
Instead, they rose.
That tells you quite a lot about what investors think of the deal.
Why Clarion?
Scale is one answer.
Informa already operates more than 800 business-to-business brands in more than 40 specialist markets and over 30 countries.
Adding Clarion takes the live-events operation to around 1,000 specialist brands generating more than £4.2 billion of annual revenue.
It also gives Informa immediate scale in areas where it wants to become bigger.
Clarion's 10 largest category franchises generate around two-thirds of its revenue, with particularly strong positions in electronics, defence and security, gaming, energy and technology.
The acquisition will take the number of Informa event franchises generating more than $50 million annually to more than 20, according to its company update.
There is also a geographical play.
Clarion strengthens Informa in Europe, North America and Asia, while Informa believes it can take Clarion brands into faster-growing markets where it already has infrastructure, particularly India, the Middle East and Africa.
That is potentially where a sizeable part of the value gets created.
Informa does not simply have to cut costs. It can take an established exhibition and reproduce or expand it in another geography.
That is one of the attractions of owning successful events brands.
What does Informa think it gets financially?
Management is promising three things.
The Clarion acquisition should produce mid-single-digit enhancement to adjusted diluted earnings per share in 2027.
It should deliver a double-digit post-tax return on invested capital within three years.
And the enlarged events operation should be capable of 7%-plus underlying revenue growth.
Clarion itself is expected to generate more than £575 million of revenue in 2027 at margins above 30%.
Debt will rise, but Informa expects pro-forma net debt to earnings before interest, tax, depreciation and amortisation to remain below three times at the end of 2026 and fall below 2.5 times by the end of 2027. Alliance News has a useful summary of the numbers.
So Informa's pitch to shareholders is straightforward.
Accept some dilution and more debt today in exchange for a larger, faster-growing and more profitable events business tomorrow.
But Clarion is only half today's story
The more profound announcement may be what Informa is doing with Taylor & Francis.
The academic publisher has been part of Informa since 2004 and is approaching $1 billion of annual revenue, growing at around 4%.
Informa has now formally started a process to separate it from the rest of the group.
Precisely what "separate" means has deliberately been left open.
It could mean a sale. It could mean a spin-off to shareholders. There could be another structure.
Informa says it is reviewing all options and will report the outcome alongside its 2026 results in March 2027.
Chief executive Stephen Carter told the Financial Times that Informa had already received approaches from potential buyers.
That matters.
Taylor & Francis is not being discarded because it is broken.
It is a substantial, profitable academic publishing operation approaching $1 billion of sales.
Rather, Informa has decided that there is no longer enough strategic reason to own it alongside an increasingly dominant global exhibitions business.
Informa is effectively breaking itself up
Seen from that perspective, Tuesday's announcement is much bigger than the acquisition of Clarion.
It marks the culmination of a transformation that has been running for more than a decade.
Informa says its business-to-business revenues have increased tenfold since 2014.
It has simultaneously extracted more than $3 billion of value from its Business Intelligence assets and increased Taylor & Francis revenues fourfold since acquiring the academic publisher.
Now the portfolio simplification is reaching its logical conclusion.
Sell or spin out Taylor & Francis.
Buy Clarion.
Concentrate the remaining company overwhelmingly on business-to-business events.
After Clarion, the group expects revenues above $6 billion.
That leaves investors with something considerably easier to understand.
Informa becomes, essentially, a global exhibitions machine.
Why does the market like that?
Partly because investors generally like focus.
A company combining academic publishing with international trade exhibitions inevitably attracts a conglomerate argument. The two operations have different growth rates, capital requirements, customers and investment characteristics.
Separating Taylor & Francis removes that complication.
It also potentially crystallises value.
If Taylor & Francis attracts a good price from a strategic or financial buyer, Informa could emerge from the process with an even stronger balance sheet after absorbing Clarion.
And the remaining company will be overwhelmingly exposed to the part of Informa that has been growing fastest.
The Financial Times reported that the shares initially fell after the announcement before reversing direction and rising as much as 6%.
That reversal is particularly interesting.
Investors had time to digest the £940 million capital raise and dilution and decided that the strategic reshaping was worth more.
There is another shareholder in the room
Parvus Asset Management has built a roughly 13% holding in Informa, according to The Times.
That adds another dimension to the decision to separate Taylor & Francis.
Whether or not activist pressure directly caused Tuesday's announcement, Informa is doing exactly the sort of thing activist investors frequently demand: simplifying the portfolio, concentrating capital on the highest-growth operation and exposing the value of a separately owned business.
It will therefore be worth watching what Parvus does next.
What about the brokers?
The most useful signal so far is actually the market itself.
Informa is issuing new shares equivalent to about 9% of its existing equity, suspending its buyback and borrowing money to buy a company from one of the world's most sophisticated private equity sellers.
Yet Informa shares have risen roughly 4%.
That is a fairly emphatic first verdict.
What can go wrong?
There are three obvious risks.
The first is execution.
Informa has already swallowed Ascential's events operations following its £1.2 billion acquisition in 2024. It is now adding another 100-plus brands.
Buying exhibitions is relatively straightforward. Integrating them, retaining their management teams and continuing to grow them is harder.
Second is leverage.
Informa expects debt to fall relatively quickly, but net debt approaching three times earnings before interest, tax, depreciation and amortisation leaves less room for error than the company has enjoyed recently.
Third is the nature of the events business itself.
Covid provided an extreme demonstration of what happens when people cannot travel to exhibitions.
Today's risks are less dramatic but still real. Informa has already had to reschedule events in the Middle East because of regional conflict, something highlighted by The Guardian.
A company increasingly concentrated on physical events inevitably becomes more exposed to travel disruption, geopolitics and the economic cycle.
Academic publishing, by contrast, provided a very different and relatively defensive earnings stream.
Selling Taylor & Francis therefore increases focus, but also removes diversification.
The Break-down
The headline is that Informa is buying Clarion for £2.24 billion.
The more interesting story is that Informa has decided what it wants to be when it grows up.
It is prepared to raise £940 million from shareholders, stop buying back its own shares and increase borrowing to become even bigger in exhibitions.
At the same time, it is preparing to cut loose a nearly $1 billion academic publishing operation that has been part of the group for more than two decades.
That is not portfolio tinkering. It is a strategic break-up.
There is plenty that can go wrong. Informa is buying from Blackstone, which is rarely confused with a charitable institution. Shareholders are being diluted. Debt is rising. And the company will become substantially more dependent on an industry whose revenues rely on companies continuing to spend money sending people around the world to meet each other.
But the arithmetic explains Tuesday's reaction.
Clarion should produce at least £173 million of adjusted operating profit in 2027 based on Informa's own revenue and margin forecasts. Informa expects earnings enhancement from the first full year and a double-digit return on the investment within three.
Then there is Taylor & Francis.
If Informa can secure a strong valuation for that business, it potentially gets to recycle capital from a slower-growing 4% operation into an events portfolio it believes can grow at 7% or better.
Yes, Informa is buying another exhibitions company. But it is also selling investors a much simpler proposition: fewer textbooks, more trade shows, and considerably more growth.
So far, the market is buying it.
