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April 4, 2008

£1bn Emap events sale counters economic doomongers

Mergers and acquisition activity within the live marketing sector continues to go against finance industry predictions of a difficult 2008, with the sale of Emap’s business-to-business events and magazine operation to Guardian Media Group and private equity firm Apax for around £1 billion.

The deal marks the final break-up of Emap, which began as a regional newspaper publisher in 1947 before expanding in the 1980s and 1990s to become one of the UK's biggest media companies, with businesses stretching across radio, TV, consumer and B2B magazines, as well as events.

"We are delighted to have secured the board's recommendation for our joint offer with Apax Partners," said Carolyn McCall, the chief executive of GMG, which publishes the Guardian, Observer and Guardian Unlimited network of websites, including MediaGuardian.co.uk.

"Emap Communications is a strong business with a range of highly successful brands. The acquisition meets our requirements in terms of diversifying GMG's media interests, in line with our commitment to guarantee the long-term financial security of the Guardian."

Alun Cathcart, the executive chairman of Emap, said that the deal represented a "further compelling opportunity for shareholders to crystallise the value of Emap's B2B business. This reflects the exceptional quality of these assets".

Emap's range of events and exhibitions include the Cannes Lions International Advertising Festival, the Education Show, Interbuild, the World Retail Congress, Professional Beauty and gift and home shows, Spring Fair and Autumn Fair.

Commenting on the acquisition, Events Industry Alliance group chief executive, Trevor Foley said: “Throughout the protracted and well documented breakup of the Emap group, it was rightly the B2B events arm that was extolled as the jewel in the crown. It is, therefore, gratifying to hear Eden Bidco (the GMG and Apax bid joint company), recognise ‘an asset of exceptional quality, uniquely positioned in markets with strong underlying fundamentals’ which made Emap a ‘compelling investment’. The EIA welcomes Apax and GMG’s planned support for the management's strategy of solid organic and selective acquisitive growth and looks forward to working together to grow the live event marketing medium.”

Making reference to the doom-laden economic predictions for 2008, Foley added: “More marketers than ever recognise that live event marketing ticks too many critical boxes to be dropped from their budgets and the signs are that, this time round, it will be the more traditional media like advertising that will be hit most by any spending cuts, if there is an economic downturn!”

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