Informa has announced that it will purchase Datamonitor for £502 million: around $1 billion. It is an astonishing price, reflecting more than a ten percent premium over the firm’s market capitalisation. In contrast, Forrester Research’s capitalisation is currently $700 million.
However, not everyone thinks Informa may have over-paid. Jonny’s feeling is that this “of course means they are getting a great package deal as Ovum and Butler – amongst others – are also in the bag”.
Although Informa’s investors have reacted positively, we will keep an open mind on the deal. Ovum itself is worth less than the premium over the market price that Informa has paid. To generate this much value from the purchase, Informa must have aggressive plans. At first glance, we don’t see this move allowing the firm to move easily in Gartner’s territory.
P.S. There’s an excellent comment here that points out that the deal may not be mainly about the tech side of these companies. That’s bound to be partly true. Even so, a ten percent premium is a lot of money. Informa will have to work hard to make it worthwhile.