Hyve Group PLC (LON:HYVE) completed a £63.9mln placing on Friday to acquire two US-based retail industry conferences announced overnight.
The two conferences, acquired for US$145mln on a cash free, debt free basis, were also paid through withdrawing from refinanced debt facilities.
The proceeds represent 10% of the capital of the company and will be used to fund part of the acquisition of Shoptalk Commerce and Groceryshop, which are events focused on e-commerce and the food and grocery segments.
Both events have generated estimated adjusted underlying earnings (EBITDA) of US$12.2mln in 2019 and are expected to add to earnings in 2021, the first full financial year following completion.
Hyve raised the new cash by selling 59mln new shares at the price of 88p each, a 3% discount on Wednesday’s closing price of 90.5p, with founders taking stock and directors participating in the deal.
Broker Peel Hunt put its target price and recommendation for the organiser of exhibitions and conferences ‘under review’ on Thursday but added the deal was “to be welcomed”.
Analysts said in a note this deal gives Hyve a material presence in the US, where it has a geographic gap, addressing an “interesting” subject area.
“The price being paid is not excessive, 11.9x historic, and the deal structure allows for accretion and should deliver a [retrun on invested capital] above [weighted average cost of capital] in three years,” the note read.
Shares picked up 4% to 94.5p on Thursday morning.