Simon Foster (pictured) says that Private Equity is a positive force in supporting the exhibitions industry, as his consortium, Arc, has made five acquisitions
Since partnering with New York-based private equity firm EagleTree Capital, Simon Foster’s global events industry consortium Arc has acquired five B2B shows from Fortem International as well the Farmers Guardian and LAMMA from AgriBriefing. The former CEO at Comexposium and UBM, says he sees PE as a positive way to support the exhibitions industry in its recovery.
How would you describe Arc?
Arc was really trying to take the benefit of all my experience and trying to pick the best of what a buy and build organisation can be. I was very fascinated by PE and how you can create value, not just for the shareholders but for the business.
We grandly say we want to redefine the future of networking and focus on bringing businesses together, but the truth is we want to create value by creating scale, using the backing of PE partners, but also using the experience, knowledge and networks we’ve got to drive and help businesses grow.
UBM were a big machine, we bought businesses and plugged them in. On the other hand we had some businesses at Comexposium, where they just buy the business for the profit and then don’t do anything with it. I want to build something that’s somewhere between the two and benefits from the fact that we have knowledge, networks and understanding from all over the world to be able to do that.
I do want to do that with the learning that live events always have to be blended with online and digital.
Do you think you view the events industry differently from your current perspective to when you were in your previous post as CEO of Comexposium?
It’s probably fair to say my position hasn’t changed. Even before Covid-19 I was a big believer in digital as an enhancement to the offering, with particular focus on how we best leverage our data and insight, how we understand our audiences.
Our customers are now much more open to the value proposition. More open also to the fact that live events and media needs to be more targeted, not just getting 10,000 people in a room, but making sure we get the right people in.
Now as events open up seeing slightly smaller shows, smaller audiences, but the quality is better and that’s all about how you are better implementing technology to create communities, and how you’re better at integrating data and understanding the people you need to connect.
What qualities in events businesses are attractive to PE investors?
Prior to Covid-19 they were very robust, predictable and didn’t stop. One of the big things I’ve seen over the past couple of years is the appetite for our industry remains.
There’s plenty of people who want to invest. The way we book means you get very good visibility of the way it is going forward. It’s very cash positive, the risks are relatively balanced, most of the costs are flexible. The financial characteristics are very interesting from the perspective of PE, as it the ability to scale up.
Even with the mega-deal of Informa buying UBM, the two biggest players of our industry, still account for less than 10% in an industry that continues to grow.
What sort of businesses are you looking to invest in?
We want strong brands, brands that are well known and respected within their respective industry. We want real community focus. Where a business has the capability to be at the centre of their industry or is well embedded in their industry, that includes the opportunity for content, written or live or digital.
How do you see the future of events businesses?
I think when we get back to the same cadence of business and good strong events running – which is probably 2023 – the more important question will be what will it be like?
I’d like to think this is the wake up call for us as an industry.
If I’m really critical, the industry spent a lot of time building big venues, it’s very good at building shows, very good at rebooks and sales and less good at understanding the dynamics of why people are there, which is to meet each other, and buy and sell and do business.
When you compare our medium – putting thousands of people in a room – versus more focused medium, digital, online, social media where you have very clear targeted metric, that is what has got to change.
The industry of the future will be fully engaged, embracing content and other media, even though at the core of it live media may still be the biggest and most important revenue generator.
What’s coming up for Arc?
We’re very focused on partnership and working with operators, owners and associations. What makes our industry magic is the people who are in it. Often the private owners of businesses are the ones who have the connections, have the drive, the market.
We are looking at acquisitions in Europe and North America and the market is very good at the moment. We have lots of people we are talking to.
We should be announcing some more deals in the coming months.
We’re lucky because were at the start of our investment cycle, which means we have different dynamics to my friends at Comexposium, Clarion, Tarsus. That doesn’t put them in a bad position, just a different position.
We want to invest more and continue to grow.
Any final thoughts?
One of the things I’ve learnt a lot over past four years is how many misconceptions there are about PE. A lot of people’s opinion of PE companies is they are nasty people who will come in and break companies up, or they’ll cut costs or try and squeeze every bit of profit out. That’s categorically not true.
Yes, PE is interested in money, but they are about creating value.
I have had pleasure to work with two [Charterhouse at Comexposium and EagleTree at Arc].
They have both been really invested in growing the business. Not because they are generous because they realise that’s how they can make value going forward. I think they are very positive for our industry.
My opinion of PE was probably very different when I was in a public company.
(This interview was originally published in Exhibition News, March 2022)