Emerald Holding, Inc. has followed in the wake of major exhibition organisers Infoma and Hyve by going to the markets to raise funding to strengthen the balance sheet.
The California-based business tradeshow organiser, particularly active in the sports, technology, jewelry, and construction sector, has announced plans to raise US$400m through the issuance of preferred stock to affiliates of controlling shareholder Onex Corporation.
Onex has said it will acquire $263.5m of preferred stock in an initial private placement and also backstop a rights offering of $136.5m of the same series of preferred stock to the company’s other holders of common stock.
All holders of common stock will have an opportunity to acquire preferred stock on a pro rata basis.
The proposed injection significantly boosts Emerald’s liquidity and the organiser is expected to use the investment to pay down debt under its credit facility and for acquisitions and growth initiatives.
As of 9 June, 2020, the company carried cash on its balance sheet of $68m, had borrowings under its revolving credit facility of $100m, and borrowings under its term loan of $529m, while ithad funded $24m of its cancelled event liability which had stood at $72m on 31 March, 2020.
The initial purchase by Onex is expected to close on 9 July, 2020, and the rights offering is expected to close during the third quarter of 2020.
"We are extremely pleased to expand our relationship with Onex as we position our business for recovery once the impact of Covid-19 is behind us," said Brian Field, Interim President and Chief Executive Officer of Emerald. "We have continued confidence in our strategic plan and the long-term prospects of our marketplaces. The capital we are raising positions us to build on the strength of our brands and accelerate new growth opportunities we expect will arise during these uncertain times."
“We believe Emerald has the platform, strategy and management team in place to deliver strong performance through future periods of economic recovery and create meaningful long-term stockholder value,” said Kosty Gilis, Managing Director at Onex and Chairman of the Board of Emerald. “With this investment, Emerald’s enhanced liquidity and strong balance sheet will position the company to pursue many attractive opportunities that will arise in the coming years. We look forward to continuing to work with the management team to create value for all stakeholders.”
Full details of the stock issue available in the Emerald press release, here