Corporate events organiser Informa has revealed plans to help buy business-to-business specialist Clarion Events. Dan Coatsworth, head of markets at AJ Bell, believes the decision could lead to Informa being a rollercoaster ride for shareholders.
He said: “Informa is not alone in combining events with academic publishing, but its latest announcement suggests time is up on this arrangement.
“The events arm has benefited from a post-pandemic surge in demand, and management are looking to double down through the sizeable acquisition of rival Clarion and by spinning off its academic arm Taylor & Francis.
“The deal adds major events like the consumer electronics-focused IFA Berlin, gaming conference ICE in Barcelona and defence event DSEI to Informa’s roster. It is expected to accelerate growth and enhance earnings from next year.
“Informa has expanded the ways it makes money from events through initiatives like charging companies to set them up with buyers through AI-backed matchmaking apps, offering data insights, selling VIP experiences and taking a cut from local hotel bookings and logistics partners.
“While potentially less profitable and exciting, the publishing side is arguably more defensive and less exposed to fluctuations in the economy. In the future, that could mean Informa is more of a rollercoaster ride for shareholders.
“Although Covid felt like a once in a generation episode, it had a massive impact on the events world. Some investors may be nervous about Informa being exposed to the risk of in-person gatherings being disrupted in the future.
“For now, the market has taken the news positively, despite the dilution implied by a major fundraise, but will be keen for clarity on plans for the future of Taylor & Francis which have been promised alongside next year’s full-year results.”
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