Buyer: Euromoney Institutional Investor PLC Seller: Metal Bulletin PLCPrice: $408 million Date: OctoberTakeaway: Euromoney dished out $408 million, the ninth largest payout for an acquisition last year, according to media bankers DeSilva + Phillips.
One of the most inconspicuous but expensive M&A deals of 2006 occurred in October, when London-based Euromoney Institutional Investor PLC, a producer of international financial magazines, events and databases, paid a hefty $408 million to purchase Metal Bulletin PLC, a London-based producer of magazines, books, directories, market analysis and research and events that has a major, multimillion-dollar U.S. presence.
The Euromoney deal derailed a merger attempt between Metal Bulletin and United Kingdom b-to-b publisher Wilmington. Just when Bulletin was to be sold to Wilmington, the Daily Mail and General Trust-backed Euromoney decided to increase its original offer of over $367 million to $408 million to ward off the Wilmington threat. "Every acquisition is risky, but we aim to minimize risk by carrying out very meticulous due diligence and by integrating business quickly and according to detailed plans," says Euromoney director, Christopher Fordham.
In a statement released to Metal Bulletin shareholders at the time of the acquisition, Euromoney stated its reasoning behind the deal: To "join together two of the leading business-to-business information and events companies and consolidate their leading positions in the financial and metals, minerals and mining b-to-b markets based on a strong portfolio of market leading brands." The two companies were projected to have a balanced split of revenues. According to the proposal, approximately 32 percent would be derived from subscription-based products; 35 percent would come from events; and 26 percent of revenues were to be derived from advertising.
The deal combines Euromoney’s solid global market base in the international capital market and specialist financial industries with Metal Bulletin’s strong international metal-industry presence. "The acquisition was in line with Euromoney’s strategy of building high-growth, high-quality subscription and online businesses," says Fordham. "And so far, so very good. The Metal Bulletin Businesses are trading ahead of forecast and we are achieving the synergies we expected and we see opportunities to develop the business further."
As for the year to come, Fordham says Euromoney will concentrate on continuing the integration. "Our most significant goals for 2007 are continuing to integrate Metal Bulletin and investing in its further growth rather than making additional major acquisitions," says Fordham. "However, we continue to look out for bolt-on acquisitions where we can add value."
Comments: Metal Bulletin is a subscription and data-driven business information provider;just the kind of business that fits well with Euromoney. Like when Euromoney acquired Institutional Investor for $142 million eight years ago, this is a perfect fit. It overlaps with financial sectors that Euromoney is already in and introduces some new, but contiguous sectors, that will allow the company to grow and expand.