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April 8, 2015

CONVENE -- How Mergers and Acquisitions Are Shaking Up the Industry

By Regina McKee

The blockbuster sale last year of U.S. show organizer Advanstar Communications to global information-service provider UBM plc for $972 million marked a milestone for the events industry. Advanstar’s 54 trade shows and 100 annual conferences vaulted U.K.-based UBM into top position as the largest organizer of business-to-business (B2B) trade shows and conferences in the United States. The purchase heralded a strategic shift for UBM: focusing on event acquisition and development to lead its global expansion.

It also capped two years of robust merger-and-acquisition activity within the B2B media/event space, where the volume of deals has returned to pre-recession levels, according to the Jordan, Edmiston Group Inc. (JEGI), an investment bank specializing in M&A transactions in media/events, technology, and marketing. Indeed, in the exhibitions-and-conferences sector, JEGI identified 64 M&A deals valued at a total of $3.8 billion in 2013 and 53 deals valued at $1.1 billion last year.

What’s behind this upswing? Increased confidence in the economic environment, low borrowing costs, and a vast supply of available investment capital have fueled a bonanza of mergers and acquisitions across the spectrum of business and industry. As for events in particular, “they offer business-model characteristics that are attractive to investors — strong margins and cash flow, little to no receivables risk, little working-capital requirements, and relatively small staffing,” said Richard Mead, JEGI’s managing director. “Event platforms also give investors the chance to add revenue streams from magazines, online media, data, and research.”

Read more at PCMA.org

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