International exhibition organiser ITE has announced it has agreed to acquire Mining Indaba from Euromoney Institutional Investor plc in a deal worth £30.1m on a cash-free, debt-free basis.
Mining Indaba is a leading event dedicated to bringing together mining and investment experts involved in Africa.
The exhibition, held in Cape Town, South Africa, was founded in 1995 and marked its 24th edition in February 2018. The next edition is scheduled for 4–7 February 2019.
ITE chief executive officer Mark Shashoua (pictured) said: “We are delighted to be able to add Mining Indaba, another well-regarded must-attend event, to our portfolio. This acquisition is consistent with our stated strategy of making disciplined and value-enhancing acquisitions of market-leading events and Mining Indaba is also highly complementary to our AOW exhibition.
“We believe the acquisition will deliver value for our shareholders and consolidate our position as an organiser of must-attend international industry events.”
ITE also manages Africa Oil Week (AOW) in Cape Town, a market-leading event for the energy industry and says there are opportunities in terms of customer base, associations, ministries across Africa to find benefits from both events operating together.
AOW is benefiting from ITE’s TAG (Transformation and Growth) programme and the company says sales are currently tracking significantly ahead of this time last year.
In the year to 28 February 2018, which encompasses the 2018 event, ITE says Mining Indaba generated sales of £7.2m (US$9.36m) and EBITDA of £3.7m. As at 28 February 2018, Mining Indaba reported gross assets, excluding cash, of £600,000.
The acquisition includes an initial cash consideration of £20m to be paid on completion, with a deferred cash consideration of £10.1m to be paid in June 2019.
The acquisition will be funded from a combination of ITE’s existing cash resources and bank borrowing.
ITE says it expects, “to realise operational synergies and to strengthen its presence in the natural resources end-market given its existing ownership of AOW”. The group also expects the acquisition to enhance earnings in its first full year of ownership and deliver return on invested capital (ROIC) greater than WACC (weighted average cost of capital) within three years.
ITE anticipates the acquisition to be fully completed by the end of October 2018.