Informa seeks tech growth with US merger, shares drop

Informa (LSE: INF) shares fell 3% Thursday after the company announced plans to merge its Tech digital business with US rival TechTarget to create a “market leader” called New TechTarget.

The deal aims to strengthen Informa’s position in the fast-growing business-to-business digital services market. Informa will contribute $350 million in cash for a 57% stake in the new combined entity.

Informa also reported strong full-year revenue growth of 30%. It expects £3.17 billion in revenue for 2023, up from £2.26 billion the previous year. It also anticipates £845 million in adjusted operating profit, up from £496.3 million in 2022.

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The company issued an upbeat 2024 outlook targeting high single-digit revenue growth thanks to strength in the US and Asia. Informa foresees the TechTarget deal boosting its annual B2B revenue to around £3 billion upon completion in late 2024.

Over the past 12 months Informa shares are up 17%, but declined 3% Thursday morning following the TechTarget merger announcement. Investors seemed unimpressed despite Informa’s strong results and growth plans.