London, England – United Business Media (UBM) reached an agreement to acquire Canon Communications LLC for $287 million.The agreement between UBM and Canon’s ownership, Apprise Media LLC and Spectrum Equity Investors, was announced the night of September 15 and is subject to the approval of U.S. antitrust regulators. The deal propelled UBM stock to 655 pence, up 8.4%, making it the best performer on Britain’s FTSE 250 mid-cap sector.
In the 12-month period ending June 30, Canon generated $106 million in revenues while earnings before interest, tax, depreciation and amortization (EBITDA) reached $37 million. UBM said the purchase price represented a multiple of 7.8 times EBITDA and 2.7 times sales and would be funded from existing bank facilities. The deal was expected to boost earnings per share by 9% in its first full year of ownership, with the return on investment in that year exceeding the cost of capital.
Charles McCurdy, chairman and CEO of Canon, will assist with the transition and will remain with Apprise Media and continue his role investing in media companies.“The management team, led by Charlie McCurdy, has done a great job in developing the Canon business,” UBM CEO David Levin said in the official announcement. “I look forward to welcoming Canon’s staff to UBM and to working with them as we accelerate Canon’s growth.”
Levin called Canon a “great strategic fit” that would make UBM a world leader in trade shows for the high-end manufacturing and medical device sector. Canon organizes nearly 50 exhibitions worldwide in 10 sectors related to precision manufacturing. It also publishes 15 titles. UBM had no immediate comment on its plans for the existing Canon shows or any new launches.
“Canon gives us a complementary portfolio of market-leading branded trade shows and related products which serve highly attractive growth markets,” Levin said. “The combination of Canon’s brands with both our worldwide infrastructure and our existing electronic engineering business offers us exciting growth opportunities, particularly in Canon’s core medical device design and manufacturing markets.” UBM is looking to boost its presence in fast-growing emerging markets in China, Brazil and India.
UBM has been very active in the past five years, having completed 80 acquisitions valued at £ 642 million (about $1 billion) including a dozen companies in the first two quarters of 2010. Levin said the company may make a number of smaller-scale acquisitions in the coming months.