"This is a real positive sign for b-to-b media mergers and acquisitions," said Mike Parker, managing director at investment bank AdMedia Partners. "This was definitely not a distressed property sale."
The $287 million price tag represents a 7.8x EBITDA (earnings before interest, taxes, depreciation and amortization) multiple. In the 12-month period ended June 30, Canon generated $106 million in revenue and $37 million in EBITDA on a pro forma basis, UBM said.
Canon, which focuses on the advanced manufacturing sector with trade shows, magazines and digital properties, was acquired by Spectrum and Apprise in 2005. Since then, the ownership—led by Canon CEO Charles McCurdy—has built Canon around a single market focus of advanced manufacturing.
Canon has been one of the few b-to-b media companies owned by private equity funds that has not had debilitating debt problems in the wake of the downturn. The company recently acquired EDN and other manufacturing titles in the Reed Business Information divestiture.
Canon generates about 48% of its revenue from the 41 trade shows it operates. Trade shows have consistently been an area attractive to United Business Media, which has been a rare strategic buyer in the downturn. In addition to acquiring trade show businesses, UBM has focused its acquisitions on Asia and other emerging markets, where Canon has a strong presence.
Direct conversations between David Levin, CEO of UBM, and McCurdy led to the deal, McCurdy said in an interview. "We didn't shop the company," he said.
"The acquisition of Canon is an exciting step for UBM, building on our track record of identifying, completing and integrating value-enhancing acquisitions over the last five years," Levin said in a statement. "Canon is a great strategic fit for us: it gives us a complementary portfolio of market-leading branded trade shows and related products which serve highly attractive growth markets experiencing globalization. The combination of Canon’s brands with both our worldwide infrastructure and our existing electronic engineering business offers us exciting growth opportunities, particularly in Canon’s core medical device design and manufacturing markets.”
McCurdy will remain at Canon during a brief transition period.