Recommended acquisition of Datamonitor plc by Informa Group

Released : 14 May 2007

Summary

The Boards of Informa and Datamonitor are pleased to announce that they have reached agreement on the terms of a recommended offer for Datamonitor by Informa Acquisitions at a price of 650 pence per Datamonitor Share in cash, valuing the fully diluted¹ ordinary share capital of Datamonitor at approximately £502m.

Datamonitor is a leading global provider of market intelligence through on-line data, analysis and forecasting platforms. Through its research-based proprietary databases and wealth of expertise, Datamonitor provides clients with objective, high quality data, analysis and in-depth forecasts for six industry sectors: Automotive, Consumer (including Retail), Energy, Financial Services, Healthcare and Technology/Telecoms. This electronic, high value content helps its clients make better, more timely decisions.

Datamonitor represents an attractive opportunity consistent with Informa's strategy of providing high value, specialist content through a variety of delivery formats to identified communities of business interest, globally.

• Highly complementary business models
• Scalable technology platforms
• Significant cross-over revenue opportunities with Informa through sales, marketing and product development synergies
• Further resilience and visibility in Informa's revenue mix across each of its three divisions, through Datamonitor's high renewing subscription models
• Enhanced growth prospects and margins for Informa
• Expected annualised cost savings of £3m

As a result of revenue and cost synergies, the Informa Directors expect that the effect of the Acquisition on Informa's adjusted earnings per share will be neutral in 2007 and will be enhancing in the first full year² and expect that the post-tax return on invested capital will exceed Informa's cost of capital in the second full year.

The price of 650 pence for each Datamonitor Share represents:

• a premium of approximately 35.7 per cent. to the average Closing Price of 479.2 pence per Datamonitor Share for the 12 months prior to 11 May 2007, being the last business day prior to this announcement;
• a premium of approximately 2.2 per cent. to the Closing Price of 636.0 pence per Datamonitor Share on 11 May 2007, being the last business day prior to this announcement;
• an enterprise value which is a multiple of approximately 7.3 times Datamonitor's revenue for the year ended 31 December 2006 of £70.4m;
• an enterprise value which is a multiple of approximately 31.7 times Datamonitor's reported EBITDA for the year ended 31 December 2006 of £16.2m; and
• an enterprise value which is a multiple of approximately 18.6 times the consensus of analysts' estimates of Datamonitor's EBITDA of £27.5m for the year ending 31 December 2007³ .

The Board of Datamonitor, who have been so advised by LongAcre Partners, Datamonitor's financial adviser, consider the terms of the Offer to be fair and reasonable. In providing their advice, LongAcre Partners have taken into account the commercial assessments of the Board of Datamonitor. Accordingly, the Datamonitor Directors unanimously recommend that Datamonitor Shareholders accept the Offer as they intend to do in respect of their own entire beneficial holdings of Datamonitor Shares.

Informa Acquisitions has received irrevocable undertakings to accept (or procure acceptance of) the Offer from the Datamonitor Directors in respect of 9,687,994 Datamonitor Shares representing, in aggregate, 13.4 per cent. of Datamonitor's issued ordinary share capital.

Michael Danson, CEO of Datamonitor, has committed to purchase £5 million of Informa Shares in the 30 days following the Offer becoming or being declared wholly unconditional and to hold those shares until the announcement of the preliminary results for Informa for the year ending 31 December 2008.

A Loan Note Alternative will be made available.

Further information on the terms and conditions to which the Offer will be subject are set out in Appendix 1 and will be set out in the Offer Document, which Informa expects to post to Datamonitor Shareholders as soon as practicable although the Offer is not being made directly or indirectly in or into the United States, Canada, Australia or Japan.

Commenting on the Acquisition, David Gilbertson, Managing Director of Informa, said:

"Datamonitor is a model example of a company that slots neatly into the Informa group. Both companies provide business customers with data and analysis that is essential and unique - information they cannot do without.

"Datamonitor will enable us to extend our range of high value, specialist information products by adding greater depth of proprietary data in our core sectors, such as healthcare, financial services and telecoms; as well as take us further into the technology and energy sectors. As part of the Informa group we believe Datamonitor will be able to market to our 20 million-strong contact database, take part in our 10,000 events each year and use our global sales infrastructure across 43 countries. Combining the businesses will enhance growth prospects and margins."

Peter Rigby, Chief Executive of Informa, added:

"The team at Datamonitor has built a terrific business information company that nicely complements our publishing, events and performance improvement businesses. As part of Informa, we believe Datamonitor can accelerate growth and provide data to a wider range of clients. Additionally, Datamonitor's subscription-based business is strongly cash generative, economically resilient and characterised by robust renewal rates."

Commenting on the Acquisition, Bernard Cragg, Chairman of Datamonitor, said:

"Informa and Datamonitor together make an excellent combination. This is an excellent outcome for our shareholders. Like us, Informa has enjoyed the benefits of a clear strategy executed well, with sustained investment in the product range. It is the right home for Datamonitor. Together the two businesses will be stronger and have greater potential."

Greenhill is acting as lead financial adviser to Informa and Informa Acquisitions in connection with the Acquisition.  Merrill Lynch is acting as joint broker and has provided certain financial advice to Informa. Hoare Govett is acting as joint broker.

LongAcre Partners is acting as financial adviser to Datamonitor in connection with the Acquisition. Numis is acting as corporate broker to Datamonitor.

There will be an analyst and shareholder conference call at 9:00am today.  Please contact Sian Stanley at Maitland for details.
+44 20 7379 5151, sstanley@maitland.co.uk">sstanley@maitland.co.uk

Informa trading update

Trading during the first months of 2007 continues to be good. As reported in the preliminary results for the year ended 31 December 2006, which were issued on 14 March, all areas of the business started the year strongly and they continue to trade ahead of last year in constant currency terms. Informa has had some notable highlights in events, with a highly successful annual energy event in Germany adding to the success of SuperReturn (private equity) and the Arab Health event in Dubai which Informa reported in March. In publishing, high renewal rates across Informa's subscription titles and databases have continued. The performance improvement (PI) sector continues to perform well, with continued success with its expansion plans, in particular with the Asian business based in Singapore and growing operations in the Middle East.

The Board of Informa remains confident that 2007 will be another successful year.  The combination of organic and acquisitive growth is a solid base for further progress.  Informa has a balanced configuration of businesses across markets, formats and geographical regions, providing enhanced growth capabilities in an economic upturn and defensive qualities in a downturn.

This summary should be read in conjunction with the full text of the attached announcement and the Appendices thereto. Appendix 1 sets out the conditions and certain further terms of the Offer. Appendix 2 contains source notes relating to certain information contained in this announcement. Certain terms used in this announcement are defined in Appendix 4 to the announcement.

¹Refer to Bases and Sources in Appendix 2 for definition of "fully diluted"
² This statement should not be interpreted to mean that the future earnings per share of Informa will necessarily be greater than those for the relevant preceding financial period
³ Refer to Bases and Sources in Appendix 2 for the definition of "consensus of analysts' estimates of Datamonitor's EBITDA"

Enquiries

Terms used in this summary but not defined herein shall have the meaning given to them in the full text of the announcement.

The Offer Document and the Form of Acceptance will be posted to Datamonitor Shareholders (other than those in a Restricted Jurisdiction) as soon as practicable.

Download the full announcement

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