UBM acquires Canon Communications LLC

UBM acquires Canon Communications LLC (a leading provider of tradeshows and magazinesto the global medical device design industry and advanced manufacturing markets), from Spectrum Equity Investors and Apprise Media LLC for $287 million.

In the twelve months to 30 June 2010, Canon generated $106 million (£68 million) in revenues and $37 million (£24 million) in EBITDA on a pro forma basis (see Notes for definitions). Pro forma revenues and EBITDA for the six months to 30 June 2010 were $66 million (£44 million) and $27 million (£18 million) respectively. Principally reflecting the timing of events during the year, approximately 64% of Canon’s annual revenues were generated in the first half of 2009, and we anticipate that this pattern will continue in 2010. Canon has a number of biennial events which lead to a revenue uplift of approximately $1 million in the first half of even years relative to odd years. In its unaudited balance sheet dated 30 June 2010, Canon’s gross assets were $253 million (£168 million). All financial data are based on unaudited financial information.

The consideration of $287 million (£185 million) will be funded from UBM’s existing bank facilities. UBM’s net debt at 30 June 2010 was £303 million (see Notes for definition). Pro forma for the acquisition of Canon, net debt would have been £489 million at that date. UBM anticipates that its bank borrowings will be refinanced in long term capital markets in the near future, subject to market conditions. Excluding the impact of potential synergies, UBM expects the acquisition to be approximately 9% EPS accretive in its first full year of ownership, generating returns in excess of UBM’s cost of capital. The acquisition is not expected to materially affect UBM’s effective tax rate.