Steve Monnington, managing director, Mayfield Media Stratgies, surveys the mergers & acquisitions landscape.
The exhibition M&A world is still subdued and is likely to continue that way until we start to get some visibility around the re-opening of events. Lockdown 2.0 doesn’t help this although the BioNTech Pfizer vaccine news is very encouraging – a single bright spot among the gloom.
Only Clarion and Tarsus from the big acquisitive organisers were involved in the small number of deals over the last two months. By far the largest deal was the acquisition by Clarion of a majority stake in Quartz Events who produce invitation-only executive summits in North America in 12 sectors ranging from Cybersecurity to Logistics, Procurement and Finance. The company is 13 years old and this was a transaction that should have happened earlier in the year but, like many others, was put on hold when Covid hit.
The fact that it has happened now is testament to the management’s ability to pivot the business to digital, a move that has been so successful that the second half of 2020 looks like beating pre-Covid forecasts. The effect of the pandemic has also accelerated the development of an online club for C-level executives and all of this ‘non-live activity’ should ensure that CEO Toby Harris and his team achieve a very healthy valuation once the earn-out unwinds.
Clarion already have an existing executive summit series MATCH so they already understand and operate the model successfully, but there is also the opportunity for them to use the Quartz model to create additional executive summits in their other sectors using the Quartz model.
Another business that has continued to grow despite Covid is the US brand Masters of Pediatric Dermatology (MOPD) and Tarsus has added it to their medical portfolio which includes Cardiometabolic Health Congress (CMHC), A4M|MMI, Painweek and LivDerm. Like Quartz Events, the transaction was started pre-Covid but in this case continued through lockdown and, as with Quartz, the digital element was key to providing security of profits. MOPD takes place annually alongside the dermatology event South Beach Symposium which Tarsus acquired in 2014.
The importance in the development of the Tarsus medical business was further underlined with the acquisition of the remaining 50% of Hubei Tarsus Hope, their original entry point into China in 2008. The main shows are the Chengdu Dental Show and the biannual Zhengzhou Medical and Dental Show. China is one of the few territories which has successfully resumed live business events in recent months.
Turkish organiser TG Expo has acquired 100% of Sectoral Fairs, organiser of ICCI - International Energy and Environment Fair and Conference. Back in 2014, Sectoral were acquired by Deutsche Messe subsidiary Hannover Fairs Turkey. This was at the time when local Turkish organisers were being snapped up by the international players. Hannover subsequently sold 50% of the business to energy exhibition media specialists PennWell. The 2020 edition was cancelled and held as a virtual event.
Hyve has sold its entire exhibition businesses in Azerbaijan and Uzbekistan in line with their strategy of concentrating on market leading events. The events are not expected to resume for some time due to Covid-19.
A few months ago Lupa Systems, founded by James Murdoch, entered into an initial agreement to invest into Swiss based MCH Group, organiser of many exhibitions including the Art Basel series in Basel, Miami and Hong Kong. This was driven by MCH’s need to strengthen the capital structure and shareholder base in order to cope with the consequences of the coronavirus crisis. A deal was subsequently blocked by LLB (Swiss) Investment AG who own 9.8% of the shares and preferred a Swiss solution. However, agreement has now been reached and the deal confirmed and Lupa will eventually own between 30% and 44% depending on the participation of existing shareholders.