The businesses will be integrated principally within Reed Exhibition Companies which, following the acquisition, will be the world’s largest exhibition organiser.
Miller Freeman Europe is the leading trade exhibition organiser in Continental Europe, serving the major European markets of France, Germany, Italy, Spain and Scandinavia. It organises over 100 shows and has 66 related websites. Its portfolio includes prestigious international and domestic events across a number of sectors, including building and construction, retail, food and hospitality and environmental services. It is also a major business to business publisher in Italy with more than 50 journals.
This acquisition is an important strategic expansion of Reed Exhibition Companies and represents an excellent fit both geographically and by sector. Reed Exhibition Companies has leading positions in the US, UK and Asia and now, with this acquisition, in continental Europe.
Reed Exhibition Companies has performed strongly over many years, with a well established management team. The Miller Freeman Europe business has also seen good revenue growth in recent years. The combination with Reed Exhibition Companies provides a platform for acceleration of this growth as well as margin improvements. Reed Exhibition Companies reported revenues in 1999 of £301/(Euro) 458 million, whilst Miller Freeman Europe reported revenues of £118/(Euro) 179 million.
Crispin Davis, Chief Executive Officer of Reed Elsevier, said The acquisition is a significant step in the expansion of our Exhibitions business in key markets and into Business to Business publishing in Italy. Reed Exhibition Companies has a good track record of organic growth and in integrating acquisitions, and the combination with Miller Freeman Europe provides a strong platform for further growth.
Mike Rusbridge, Chief Executive Officer of Reed Exhibition Companies, said We are very excited about the opportunities from the acquisition of Miller Freeman Europe. This high quality portfolio complements well our position in Europe. We see good opportunities through the replication of strong market leading concepts and the extension of established brands on a global basis.
In the financial year to 31 December 1999, Miller Freeman Europe reported revenues, including its share from joint ventures, of £118/(Euro) 179 million and operating profits before interest and tax of £30/(Euro) 46 million. The business operates with negative working capital and, at 31 December 1999, had net operating liabilities of £19.5/(Euro) 31.4 million. The acquisition is expected to be accretive to earnings before goodwill and intangible asset amortisation in the first full year of ownership.
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Following the acquisition, Reed Exhibition Companies will own and operate over 440 events across 29 countries and the pro forma combined gross revenues in 1999 would have been £419/(Euro) 637 million.
The acquisition is being funded from Reed Elsevier’s cash resources. The acquisition of the French, Italian and Spanish businesses has been completed today, whilst completion of the acquisition of the business in Germany is subject to regulatory approval and of the business in Scandinavia is subject to the rights of the joint venture.
