Dealmakers: Steve Monnington on early/mid 2017 M&A World

There are two main themes that emerge from the last two months’ M&A transactions. The first is the usual one revolving around the continuing acquisition drive of the private equity owned organisers in order to grow as quickly as possible before an exit.

US based Emerald Exhibitions’ latest acquisitions are the San Diego based home technology show CEDIA, bought from the Custom Electronics Design & Installation Association and the International Drone Conference and Exposition held in Las Vegas. At the same time Reuters reported that Emerald, owned by PE firm Onex, is now on the block with a reported asking price of US$2bn. 

Emerald was created in June 2013 when Onex acquired Neilsen and since then they have been on an acquisition spree acquiring George Little Management for $335m as well a whole block of diverse businesses from the National Pavement Exhibition to Pizza Expo. One thing they haven’t done is expand outside the USA – an obvious growth opportunity for whoever buys it. It’s hard to see any of the trade buyers stumping up this amount of cash, especially after the recent big purchases of Penton by Informa, and Advanstar and AllWorld by UBM. Either a sale to another PE Firm or a stock market flotation are the obvious options.

There were more buys from private equity-owned Clarion, this time GROW London, the contemporary garden fair and RetailEx in Thailand. Clarion’s pace of acquisition mirrors that of Emerald – more than 15 transactions since Providence invested. Go back to the start of this column to see what is happening there…

The second theme is the divestment of previously acquired businesses by some of the international players. In 2013 Fiera Milano International paid €7.5m (US$8.4m) for 75 per cent of Worldex, a Chinese organiser running a portfolio of shows in agrifood and hospitality. Now in a change of strategy they have exited the investment by selling their stake to Singex, the in-house organiser of Singapore Expo for €2.75m, thus realising a capital loss of €4.75m.

In 2011 UBM acquired Ecobuild from David Wood for (according to its 2012 annual report) total consideration of £44.9m (US$57m). For a single show generating £9.4m revenue this was considered a high price but, at the time of the acquisition, UBM’s CEO David Levin expected to double the size of the show and replicate it in China, Brazil, India and UAE. Unfortunately none of this happened, and six years later, the show has been sold to its brand director, Martin Hurn, for a nominal sum. We never hear about the vast majority of acquisitions that work out well, only the ones that don’t and Ecobuild is the most high profile in recent years.

Tom Hall

Editor, Exhibition World