UBM acquires outstanding 50% stake of Canada Newswire for £30.1m

UBM company PR Newswire has acquired the outstanding 50% share in its Canada Newswire (CNW) business from the PA Group Limited (PA Group) for a cash consideration of £30.1m. Following the transaction, UBM will retain its 17% interest in the PA Group.

Established in 1960, CNW is the leading newswire provider in Canada, distributing approximately 90,000 wire releases per year. It is also the country’s largest investor relations webcast provider and a leading regulatory filing agent. In 2011 CNW generated revenues of £30.8m.

UBM has fully consolidated CNW’s results reflecting its direct and indirect ownership of 58.5%. The acquisition will not directly affect reported consolidated revenue or operating income. The transaction will eliminate the non-controlling interest in CNW profit which in 2011 was £2.3m.

Full ownership will enable PR Newswire to implement an aligned commercial, product development and infrastructure strategy across its North American business. Alignment is expected to result in incremental revenues in Canada by providing customers with access to PR Newswire’s full range of product offerings and by enabling the two organisations to work together in accelerating the trend towards higher engagement products. Cost savings from the integration of the businesses and technology platform are expected to be broadly offset by restructuring costs in the balance of 2012 and 2013. The return on this investment is expected to exceed UBM’s cost of capital in 2013 and subsequent years.

UK, London & Canada, Montreal and Quebec City

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