Acquisition of ABC-CLIO Bloomsbury has today announced the acquisition of ABC-CLIO, an established academic publisher of reference, curriculum & professional development materials (across online and print formats) focused on the North American market. ABC-CLIO has four imprints, 32 databases and 23k titles in its portfolio – and is a strategically very attractive acquisition in our view, given it bolsters Bloomsbury’s footprint in the region and strengthens the wider Bloomsbury Digital Resources offering (with BDR likely to sell ABC-CLIO’s digital products globally now). Cash position supports growth The consideration is £17.3m, of which £0.5m is post completion, and ABC-CLIO generated revenue of £11.5m (implying a multiple of c1.6x sales) and PBT of £0.9m in CY20 – the deal is expected to be earnings enhancing even in the current year (with £2.1m of revenue expected before the fiscal year end in February). We currently forecast a net cash position of £53m by Y/E FY23E, so see scope for more acquisitions over time as the company continues utilising strong cash generation to accelerate and strengthen future growth. Significant upside to go for The recent pull-back now leaves the shares trading at c.8x CY23E EBITDA – we believe this is far too cheap given the structural resilience of Bloomsbury’s growth, the scope for upside risk to consensus estimates over time, and recent industry transaction multiples.