Under (relatively) new broom Pedro Ros training and professional information specialist Wilmington (WIL) (and 15 for 15 portfolio constituent) is looking to expand its global horizons. The first big move in this direction is being well received by the market – the shares up 4.1% to 265.34p as it agrees to buy US healthcare and finance events firm Financial Research Associates for an initial consideration of $13 million rising to a maximum of $20.6 million based on specified performance targets.
This morning’s announcement is a prelude to a capital markets day today which should offer further colour on this deal and the group’s wider strategy under Ros – who assumed the hot seat in October 2014.
An earlier update in December (10 Dec '14) unveiled a new structure for the business built around four core areas: Risk & Compliance; Finance; Legal and Insight. Financial Research Associates has offices in Charlotte, North Carolina and Santa Cruz, California and manages more than 80 events with around 60% of revenues coming from the healthcare sector and 40% from the financial space.
The deal is expected to be earnings enhancing in the first full year of ownership and based on the full deferred consideration is being valued on an earnings before interest, tax and amortisation multiple of 6.2 times. The deal is being financed from an existing £65 million bank facility.
Westhouse reiterates its neutral recommendation and 247p price target but says it will review its position in the wake of the CMD and comments: ‘We are encouraged by this morning’s acquisition which looks a strategically sensible deal in areas that the group knows well and should create synergies with existing operations.’