Berenberg upgrades Ascential to 'buy' following Informa bid
By Iain Gilbert
Date: Thursday 25 Jul 2024
(Sharecast News) - Analysts at Berenberg upgraded business-to-business media firm Ascential to 'buy' from 'hold' and hiked their target price on the stock to 568.0p from 395.0p following a takeover offer from Informa.
Berenberg stated Informa had made a firm offer for Ascential at 568.0p per share, in line with the possible offer price disclosed on 23 July, and representing a 53% premium to the closing price on 22 July and valuing the company on a CY24 and CY25 enterprise value/underlying earnings ratio of 15.7x and 13.8x, respectively, pre-synergies.
"The CY25 EV/EBITDA of 13.8x, pre synergies is higher than historical take-out multiples in the sector - Informa bought Tarsus for 12.5x EV/EBITDA in May 2023. It also bought UBM for 14.3x in January 2018. Hyve was also bought by Providence February 2023 at >11x EV/EBITDA. When we take into account the potential synergies and better-than-expected trading, we estimate the implied CY25 EV/EBITDA valuation to be c11.5," said Berenberg.
The German bank added that Informa noted in its H1 results that its larger events were growing at above-average rates, benefiting from scale economics, and that Ascential expects H124 revenue to be roughly £158.0m, as organic growth came to 15% year-on-year.
Reporting by Iain Gilbert at Sharecast.com
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