Shares in Informa PLC (LSE:INF) rose to their highest level since the pandemic after the events and exhibitions group delivered results in line with market expectations and announced the US$940mln acquisition of international B2B exhibitions group Tarsus.
Analysts at UBS said they expected forecasts to be upgraded following the news.
Informa's revenues increased 33% to £2.4bn versus and group adjusted EBIT 38% to £535mln, with free cash flow of £466mln and diluted adjusted earnings per share of 26.4p, which was above expectations of 25.4p due to lower finance costs.
Tarsus is expected to generate £175mln of revenue in 2023, which UBS said implies a 4.5x EV/sales multiple.
Stephen Carter, chief executive of the FTSE 100-listed group, said: “We have long admired the Tarsus business which, like Informa, has been built around major brands in attractive, specialist B2B markets in the growing regions of Asia, China, the Middle East and the Americas.”
The new addition was also said to offer "strong portfolio alignment" in sectors from healthcare, beauty, packaging, infrastructure, aviation, fashion and sustainability, with its events including the Health Connect Partners conferences, Labelexpo in Brussels, Intertraffic in Mexico, the Dubai Airshow, the Shenzen International Brand Underwear Fair (SIUF), and the Mexico WindPower expo.
The acquisition is also expected to deliver US$20mln of synergies and this to contribute to a mid-single-digit accretion to EPS in 2024/2025.
Informa said it will increase its share buyback to £1bn, up from £725mln, with £513mln so far executed in 2022.
The shares rose 3% to 707p on Thursday morning, topping 700p for the first time since late February 2020.