Informa plc (LON:INF), the international B2B Events, B2B Digital Services and Academic Markets Group, has announced an agreement to combine Informa Tech’s digital businesses with TechTarget to create US-listed New TechTarget.
Stephen A. Carter, Group Chief Executive, Informa, said:”Today we significantly strengthen Informa’s position in the growing B2B Digital Services market, creating a platform to serve B2B customers at scale digitally, as we already do in Live & On-Demand B2B Events.”He added: “Over the last three years, Informa has built a proprietary first party data platform, IIRIS, and expanded our position in the B2B Digital Services market. Now, through a majority shareholding in US-listed TechTarget, we are positioning this business firmly where the customers and the value are.”
Highlights
· A Leading Platform in B2B Data and Market Access…Informa Tech’s digital businesses (Industry Dive, Omdia (including Canalys), NetLine and our Digital Media Brands eg Information Week, Light Reading, AI Business) will combine with US-listed TechTarget to create New TechTarget, a market leader with annual sales of c.$500m;
· B2B Digital Acceleration… New TechTarget’s focus within B2B Data and Market Access includes Audience Development (Specialist B2B Content/Brands, First Party Data), Demand Generation, Buyer Intent, Content Marketing and Tech Research; The majority of commercial activity is currently in the US, dominated by Enterprise Technology customers;
· Value Creation…Long-term growth of the Technology market, growing demand for B2B Digital Services, combination synergies (c.$45m target within three years) and new product development provide the ingredients for significant value creation, with a five-year ambition to double revenues;
· Fully Consolidated…Informa will contribute Informa Tech’s digital businesses and c.$350m1 cash for a 57% ownership position in New TechTarget, consolidating its revenues, profits and cashflows;
| New TechTarget: A Leading Platform in B2B Data and Market Access |
| · Leading industry brand: TechTarget |
| · Leading Buyer Intent Platform: Priority Engine |
| · c.50m Permissioned First Party B2B Audience Data: TechTarget, IIRIS |
| · 220+ Leading Specialist B2B Content & Brands: TechTarget, Industry Dive, Dark Reading |
| · Leading Tech Research: Omdia, Canalys, Enterprise Strategy Group |
| · Leading Demand Generation & Engagement Platforms: TechTarget, NetLine, BrightTALK |
| · Leading Content Development Services: BrightTALK, Studio ID |
· First Party Data: The combination further strengthens Informa’s first party data capabilities, with TechTarget’s audience data, when combined with Informa’s IIRIS B2B data, delivering a total B2B audience of c.50m;
· A Controlled Company…New TechTarget will be US-listed on Nasdaq (Ticker: TTGT), classified as a Controlled Company, and led by Gary Nugent as CEO (current Informa Tech CEO);
· Enhanced Financials…Post completion, the combination will immediately enhance Informa’s Revenues and Adjusted Operating Profit and is expected to be accretive to adjusted Earnings Per Share from 2026, delivering a post-tax ROIC ahead of long term WACC within three years.
New TechTarget: Informa Accelerates in B2B Digital Services
Informa Tech’s digital businesses enter agreement to combine with TechTarget
Informa has reached an agreement to combine Informa Tech’s digital businesses with TechTarget to create New TechTarget, a leading platform in B2B Data and Market Access.
TechTarget is listed and headquartered in the US, a leading provider of data-driven B2B products to enterprise technology customers. It delivers new customers, influences purchasing decisions and drives revenue, based on buyer intelligence derived from its first party B2B data. TechTarget estimates it will generate 2024 Revenues of c.$235m and Adjusted EBITDA of c.$73m.
Over the last three years, Informa has been building a position in B2B Digital Services. We invested in IIRIS to create a B2B customer data platform for collating, standardising and analysing all the Group’s first party B2B data.
We expanded in Specialist Tech Research organically (Omdia), then extended our B2B digital product portfolio through Industry Dive (Specialist B2B Content/Brands), NetLine (Demand Generation and Buyer Intent) and most recently Canalys (Specialist Tech Research).
New TechTarget will combine TechTarget’s portfolio of B2B products and brands (eg Priority Engine, BrightTALK) with Informa Tech’s digital businesses – Industry Dive, Omdia, Canalys and NetLine, as well as the Specialist Digital Media Brands (eg Information Week, Light Reading, Heavy Reading, AI Business). In aggregate, it is estimated these digital businesses of Informa Tech will generate 2024 Revenues of c.$275m and Adjusted EBITDA of c.$50m, which when combined with TechTarget will mean New TechTarget is estimated to have 2024 revenues of c.$500m and Adjusted EBITDA of c.$120m.
The creation of New TechTarget will accelerate Informa’s ambition in B2B Digital Services, creating a leading platform in B2B Data & Market Access, an area offering significant growth and value. The addressable customer base for these products is primarily in the US, dominated by Enterprise Technology companies. Therefore, we are now planning to locate this combined business where the customers and the value are, within a US-listed company.
The Combination brings together brands and business that will give New TechTarget unique strengths in B2B Data & Market Access, including:
· Scale in Audience Development: Scale in segmented B2B audiences through a portfolio of 220+ leading Specialist B2B Tech Content Brands, and leading Tech Research business, Omdia;
· Scale in First Party B2B Data: The combination of Informa’s IIRIS proprietary data platform with the powerful B2B audience data of New TechTarget will create unique scale in permissioned first party B2B data, with access to a total B2B audience of c.50m professionals;
· Scale in B2B Customer Relationships: Established relationships with c.8,600 B2B technology customers, focused on Enterprise Technology, including key C-Suite tech decision makers;
· Scale in Leading B2B Technology: A leading buyer intent data platform, Priority Engine, leading Demand Generation platforms, TechTarget/NetLine, a leading video content marketing platform, BrightTALK, SEO-enabled content platforms and a growing number of AI-enabled tools that improve efficiency and enhance customer experience;
· Scale in Product Breadth: Full end-to-end go-to-market solutions, a range of B2B products, and significant capacity for new product investment to further expand the product portfolio;
| B2B Data and Market Access Platform | |
| B2B Product | Description |
| Audience Development | Specialist Business Content/Brands that inform and educate B2B professionals |
| Permissioned First Party Audience Data | Profile and behavioural insight on B2B buyers provided through proprietary subscriptions and interactions with Specialist B2B Content/Brands, including permission to use data for targeted marketing |
| Buyer Intent | Individual prospect data generation, through tech-enabled analysis of purchasing intent across segmented B2B audiences |
| Specialist Technology Research | Paid subscription-based access to specialist B2B market/product data, analytics and analysis, and custom project research that informs market, product and go-to-market strategy |
| Demand Generation and Engagement | Brand awareness and targeted lead generation through data-driven analysis of segmented B2B audiences |
| Content Development | Creation of bespoke content for B2B vendors looking to reach specialist B2B audiences |
Informa Connect further expands through Informa Tech’s Events portfolio
Informa Connect (Content-led Live & On-Demand B2B Events) will assume the management and operating responsibility for Informa Tech’s portfolio of 20+ Live and On-Demand Technology Events (eg Black Hat, Game Developer Conference (GDC), Enterprise Connect, AfricaCom, The AI Summit). This will expand the Informa Connect portfolio into a sixth growth market (Biotech & Life Sciences, Finance, Foodservice, Anti-Aging & Aesthetics, Lifestyle and now Technology) and take annual revenues to over $1bn.
New TechTarget Value Creation
Informa is contributing its Informa Tech digital businesses and c.$350m1 cash in exchange for a 57% majority ownership position in New TechTarget. This will be effected by the issue of approximately 40m new shares of common stock to a wholly owned subsidiary of Informa PLC.
On completion, TechTarget’s current shareholders will receive a c.$350m1 cash distribution and a 43% ownership position in the New TechTarget business, which will be a US listed business on the Nasdaq stock exchange, trading under the ticker symbol TTGT and will be a Controlled Company.
Annualised net synergies of c.$45m are targeted within three years, including c.$25m cost efficiencies from real estate, software, systems and other overheads, and c.$20m incremental revenue benefits through expanded data access, cross-promotion and cross-selling targeted across the combined customer base.
New TechTarget will be fully consolidated by Informa, immediately enhancing Group Revenues and Adjusted Operating Profit post-completion in 2024. The transaction is expected to be neutral to adjusted earnings in 2025 and accretive thereafter, and to deliver a return on invested capital above Informa’s long-term cost of capital within three years.
Growth in Technology, growing demand for data-driven B2B products
The long-term growth dynamics of the Technology sector remain strong and, within it, the increasing use of data-driven products that deliver differentiated Research, Demand Generation and Buyer Intent. Today’s agreement will give Informa scale in the US, the leading market for these products, a leading market brand in New TechTarget, valuable operating synergies and highly experienced operating management, all within a US listed company.
The creation of New TechTarget will provide both sets of shareholders with a balance of immediate benefits and longer-term returns, with the primary focus on the significant value that will be generated by creating a scale position in B2B Data and Market Access.
New TechTarget will target double-digit organic revenue growth, 35%+ Adjusted EBITDA margins and strong free cash flow conversion within three years of completion, and a forward ambition is to generate $1billion in annual revenues within five years of closing.
| Combination Value Creation | |
| Informa Value Creation | TechTarget Value Creation |
| · Access to a leading brand | · Immediate cash payment to shareholders (c.$350m1) |
| · Scale in the US (where the customers/value are) | · Value premium on Day 1 |
| · US listing (Nasdaq) | · Participation in combination upside |
| · Specialist talent and management | · Increased market capitalisation |
| · Fully consolidated financials | · Diversification of revenue via paid subscriptions |
| · A Controlled Company | · Scale in Specialist Tech Research via Omdia/Canalys/ESG |
| · Expanded access to intent-based first party data | · Expanded access to intent-based first party data |
| · Operational scale benefits | · Operational scale benefits |
| · Operating synergies | · Operating synergies |
| · Scale player in long-term growth market | · Scale player in long-term growth market |
Leadership
New TechTarget will be headquartered in Newton (Boston), Massachusetts. Gary Nugent (currently CEO of Informa Tech) will become the CEO of New TechTarget. Michael Cotoia (currently CEO of TechTarget), will become Special Advisor to the CEO, supporting the effective combination of the businesses and delivery of New TechTarget’s growth and performance targets. Both have significant domain expertise and experience, as well as deep, long-term customer relationships in the Enterprise Technology market.
The Board of Directors of New TechTarget post completion will initially consist of nine Directors, including the CEO and Chair. The Non-Executive Directors will combine leadership and relevant experience, including:
Stephen A. Carter (Informa Group Chief Executive), Alex Roth (Informa Strategy Director), Sally Ashford (Informa HR Director), representing Informa’s shareholding.
The other non-Executive Directors include David Flaschen (Non-Executive Director of Nasdaq-listed Paychex and current/retiring Informa PLC Non-Executive Director), Don Hawk (TechTarget Co-Founder and current Executive Director), Christina Van Houten (TechTarget Independent Director), Perfecto Sanchez (TechTarget Independent Director).
In addition, a new Chair of the Board will be appointed with US listed company and relevant market knowledge and experience.
Path to Completion
The Boards of Informa PLC and TechTarget have unanimously approved the Combination. The proposed transaction is expected to complete in the second half of 2024, subject to TechTarget majority shareholder approval and customary regulatory approvals and other conditions.
Gary Nugent, Chief Executive, Informa Tech, said:
“Today we are creating a leading platform in B2B Data and Market Access that combines specialist brands, specialist content and cutting-edge technology, all underpinned by unique B2B audiences and proprietary First Party Data, providing B2B buyers with more opportunities to influence purchasing decisions, identify new customers and drive revenue.”
Michael Cotoia, Chief Executive, TechTarget, said:
“We believe that the importance of permission-based audiences and first party data is growing exponentially, and this combination positions New TechTarget to capitalize on these impactful trends by increasing our first-party intent signals, archive of original content, traffic footprint and size of our permission-based audience. I look forward to working with Informa Tech CEO, Gary Nugent, to combine our talented teams, drive new growth opportunities and unlock the full potential of this combination.”
Investor Presentations
Informa PLC
Informa will host an investor presentation at 11am UK time on 11 January 2024, focusing on its strong trading performance in 2023, the outlook for 2024, and today’s announcement on TechTarget. This will be held in person at its offices at 240 Blackfriars, London, SE1 and webcast live via www.informa.com, hosted by Group Chief Executive, Stephen A. Carter and Group Finance Director, Gareth Wright. They will be joined by the Informa Tech CEO, Gary Nugent and TechTarget Chief Executive, Michael Cotoia.
For those participants that would like to ask questions, the dial in is as follows:
Password if prompted: Informa Update
UK: 0808 109 0700 or +44 (0)330 551 0200
TechTarget
Separately, TechTarget will host a conference call to discuss the proposed combination of Informa Tech’s digital businesses with TechTarget. This will be held at 8.30am EST / 1.30pm UK Time on 11 January 2024, led by TechTarget Chief Executive Michael Cotoia, TechTarget Finance Director Daniel T. Noreck. They will be joined by Informa PLC Group Chief Executive Stephen A. Carter and Informa Tech CEO, Gary Nugent.
The live webcast can be accessed at https://events.q4inc.com/attendee/433854863 or by dialling as follows:
Access Code: 698382
International: 866-813-9403
US: 929-458-6194
