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November 19, 2010

STEVE MONINGTON:Global Exhibition M&A Watch – Autumn 2010

The managing director of Mayfield Media looks at the last three months in mergers and acquisitions in the international events industry, exclusively for MEETINGS:review.

It’s been a busy quarter on the acquisition front, with deals taking place in most continents. All of the smaller strategic acquisitions were overshadowed by UBM’s acquisition of Canon Communications for US$287 million from Apprise Media who were backed by Spectrum Equity Investors.

Canon was one of the many US private equity-backed businesses, but, unlike those that unravelled in the economic crisis through over expansion and borrowing, they stuck to their core market of tradeshows for medical device design and manufacturing.

This was the first and possibly only big exhibition deals of the year and it will be interesting to see how UBM can prise more value out of Canon to make sense of the 7.8x multiple they paid. Canon has been through a number of financial owners and, therefore, one can imagine that the cost base is already very lean. This means that the only way forward is top line growth. 

Child’s play
As usual there were a couple of emerging market transactions, both involving UBM  – is anyone else buying in these markets? First UBM moved into a new sector, acquiring the International Children-Baby-Maternity Products Expo in Shanghai, China, together with two smaller business-to-consumer child and baby products fairs in Guangzhou and Beijing, and Fashion Baby, one of China’s leading consumer titles serving mothers and pregnant women. The combination of trade show, consumer show and magazine gives UBM an instant leading position in the sector.

Meanwhile in Turkey, UBM acquired 65% of Rotaforte, organiser of the marketing-leading Istanbul Jewellery shows. This was a natural follow on from the strategic sales and marketing collaboration the two companies signed last year, and further enhances UBM’s position as the worldwide market leading organiser for the jewellery sector.

Turkey appears to be one of the new priority markets for UBM, so we should expect to see more acquisition activity in the country in the coming months, as it seeks to consolidate its position. I believe that we will be seeing more of this type of majority stake partnership in emerging markets. It suits local organisers who are looking for an international partner to add value to their business, and it is a low-risk way for the internationals to enter into new markets.

Beauty and the beasts
For once there were a number of UK deals this quarter, with EMAP buying one and selling one. The acquisition was of the Energy Event from Western Business Media. The show will relocate from the National Motorcycle Museum to the NEC to run alongside Emap’s Recycling and Waste Management exhibition. On the selling side, EMAP unloaded the UK Professional Beauty Show back to Mark Maloney, who originally sold it to them for £19m less than four years ago. The original deal included six beauty exhibitions in the UK, including the flagship Professional Beauty Show and a number of related magazines. Maloney recently launched Total Beauty, a competitive event to Professional Beauty and one that split the market and more or less caused the demise of the brand that EMAP had paid so much money for. 

QD Events, meanwhile, acquired the London Pet Show from Nicole Cooper of Blue Inc Events. This is QD’s first exhibition outside Scotland and was one of several exhibitions – along with Passion and Ten Years Younger Live – originally launched by entrepreneurs and financed by Mayridge. Consumer launches are risky at the best of times, never mind during an economic crisis, and most of the other launches don’t seem to be on future event calendars. It’s a tribute to Nicole’s belief and tenacity that the Pet Show lives on.

To the rescue
easyFairs seems to be on a bit of an acquisition drive at the moment. It opportunistically picked up the assets of Business North West and Business Midlands in the UK from the liquidator of Nationwide Publishing, which had ceased trading having run into financial difficulties. Horizontal events are usually the first victims of a recession as exhibitors cut marketing budgets, so it will be interesting to see how easyFairs make financial sense of these shows. If they can use their low-cost formula to make exhibiting a no-brainer for the exhibitors, then this could prove to be a smart acquisition.

EasyFairs also acquired the Belgian business-to-business exhibition business, Fairtec, organiser of industrial technology shows in sectors such as measurement and control instrumentation, pumps and valves, subcontracting, welding, safety and security. Fairtec’s ‘one-day fair’ formula, is bang in line with the easyFairs core strategy of providing value for money shows. 

Finally, in the online sector, UBM acquired Astound, a privately-owned American virtual career fairs business to add to its virtual recruiting fairs in the UK and Asia, and in Germany. It also signalled more expansion of this medium with the launch of two new virtual fairs in the UK: Training and Career Development Live and Training and Careers in Active Leisure and Sport.

Steve Monnington is managing director of exhibition acquisition and business development specialists Mayfield Media Strategies.

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