What makes a good international partnership? They can be fruitful, ensuring the whole is worth more than the sum of the parts. They can also be a nightmare; easy to get into and awful to get out of. Very different to get out of them.
UBM Live, a division of London-listed company United Business Media, counts for a third of UBM group profits, achieved through live event platforms including exhibitions, conferences and awards. The company has many successful businesses around the world, and generally speaking they’ve been built on the acquisition and partnership principle.
UBM Live group director Simon Parker is responsible for pushing UBM’s protection and management events around the globe. He recently worked on a partnership with Montgomery to launch the commercial security show IFSEC in Lagos, Nigeria, a move that followed a time-consuming and costly IFSEC launch without a local partner in India. Parker says the contrast between the Indian and Nigerian launches showed him that when crossing into new territory, bring a partner.
“Clearly, the UK and US are very mature markets” says Parker. “What we’ve deliberately done is reposition and rebalance the portfolio in the emerging markets. Among other places we now have an incredibly successful business in China, and the same situation in Brazil, where we’re seeing 25-30 per cent top-line growth. And in a four year period we are now in profit in India.”
UBM’s method for geo-cloning, a term used for the adaptation of an exhibition or event into new territories, is to look at “attractive geography” and then establish an entry strategy. Its preferred modus operandi is to identify the key player in each region and work closely with them to assess whether there is an opportunity there, and whether or not to proceed via a straightforward joint-venture, or more likely by buying a percentage of the business.
“There are not many brands that have a truly global resonance,” says Parker. “Some of our events that do are the pharmaceutical ingredients show CPhi, Food Ingredients and Health Ingredients and our security show IFSEC.”
The latter of these brands is the one UBM launched in Nigeria in February, as part of a sub-Saharan joint venture with Montgomery. Montgomery had run its Securex brand in South Africa for around 15 years before UBM came in for the 50 per cent joint venture UBM Mongomery in 2007, eventually rebranding the event IFSEC South Africa last September. The Nigeria launch, IFSEC West Africa, followed this year with the emergence of a world class venue in Nigeria’s financial and economic capital Lagos.
The operation perfectly demonstrated the value of working with a local partner, according to Parker. “It’s important not to have a one-size-fits-all attitude when building a relationship with a local partner. You tend to enter a partnership thinking you’ll achieve one thing, but more often than not you come out with lots of other opportunities. The partnerships we have in Brazil, and in Africa with Montgomery, have led to different things.
“The history of exhibitions is littered with examples of people going into territories and failing badly,” he claims. “Organisers need to give themselves the best opportunity for success in any country.”
Striking up accord
So what makes for a good partnership? Parker says it begins with identifying an individual rather than a business, ensuring that their goals align with your own and that both parties will bring an equal amount to the table.
“Most people we partner with are people we know, people we’ve worked with, people with who we have built up a sense of trust,” says Parker. “Montgomery in Africa is a classic example of this; we’ve known them for a long time and we feel we’ve got a common vision.
“The individual, the chemistry going forward, and the fit with UBM is absolutely vital in defining whether that partnership will be a good one or a bad one in the future.” Ultimately, most international partnerships are formed not only for market entry but for the long term. While some multinationals buy a brand, stamp their name on it and cut the vendor out of future proceeds, the majority are looking for a long-term sales agent as well as a platform for their brand.
“We need to be transparent. We act as one business. In Nigeria it really felt like one team and I think it’s really important to engender that attitude,” says Parker.
It’s important to define clear areas of responsibility from the outset, and very often this is where partnerships fall down. As Parker points out, “One party often thinks they are doing more than the other, so it’s important to have a solid contract in place from the beginning.”
Assigning responsibility
Establishing a solid contract from the beginning is vital. And while you shouldn’t be thinking about an exit or a termination right at the beginning of the partnership, you need to have a mechanism by which you can get out.
In terms of percentage of acquisition, UBM typically looks at a 51 per cent minimum of the business. And although that figure can climb, Parker claims there’s another factor to consider when establishing the partner’s share in the venture: motivation. “We like to leave the owner with enough of the company to be motivated to work with us and grow the business.”
IFSEC in Nigeria is one of parker’s best examples of the acquisition and partnership model working well. “We were sensitive during the transition. It’s important to do that and not just put your mark all over it,” says Parker.
“We’ve launched IFSEC in Lagos and there are four other launch potentials for next year on the back of that experience.”
In India, UBM built the show from scratch to a size of around 22,000sqm. “It was literally a case of one guy going over there, starting a business, hiring people locally and building up the infrastructure. It worked in the end, but was it the best route? It was certainly painful but we got there in the end.“
In territories where there are significant restrictions in foreign ownership, local partnerships can be the only way to go. But many benefits aren’t immediately apparent to an organiser looking to break new markets with its brands. Local knowledge can be expensive to obtain without a local partner, and partnerships help greatly with government bodies and trade associations, venues and contractors. They also bring cultural knowledge and understanding, not to mention awareness of factors such as religious festivals.
“We’ve decided that the go-it-alone approach is a very dangerous and costly way forward,” says Parker. “Our preferred route, pretty much all the time, is to work with a partner.
“If we were in a territory where we couldn’t find a local partner, we’d have to think very hard about whether or not we’d like to try and go it alone again.”
Ultimately you form partnerships to make more money together than you could make on your own.
It’s a simple philosophy, but one that seems to be working for globe-trotting UBM Live.
Any comments? Email exhibitionworld@mashmedia.net
