Hyve Group has entered into an agreement to sell its Turkish business Hyve Fuarcılık Anonim Şirketi and subsidiaries to ICA Events for up to £8m (US$9.13m).
The sale of the Turkish business completes the disposal all of the group’s Eastern and Southern Europe division, following the management buyout of Ukraine operations and withdrawal from Russia.
Hyve said the move represented a move away from risks relating to geopolitics and currency rates.
Hyve’s Turkish business ran five events in Turkey and for the year ended 30 September 2021 reported a loss before tax of £0.7m. As of 30 September 2021, the Turkish Business had gross assets of £1.9m.
ICA Events runs more than 50 trade exhibitions and conferences across the Middle East, Central Asia, and the Caucasus.
Hyve will receive a consideration of £2m on completion, less customary working capital adjustments, and between £4m and £6m of deferred consideration, payable over the six-year period until December 2028 based on the profitability of the Turkish Business. Mayfield Merger Strategies acted as adviser to Hyve during the sale.
Trading update
The announcement came as Hyve announced their 2022 full year trading update.
The group said they had delivered revenue of approximately £122m (2021: £22m), after excluding revenues from discontinued operations in Russia, Ukraine and Turkey, and that they run a full schedule of events outside China.
This represents more than 85% recovery compared to 2019 (after discounting revenues form Russia, Ukraine and Turkey).
The company said in a statement to the London Stock Exchange that is had “reduced its exposure to more volatile countries and FX rate fluctuations” adding that with 30% of Hyve’s revenues generated in the US, the weak pound and strengthening dollar was expected to have a positive impact on 2023’s results.
CEO Mark Shashoua said the business had now almost full recovered from the turbulence of the last two years, "and in many cases, we are pleased to have delivered significant growth compared to pre-Covid performance".
"In terms of our geographical focus, we continued to concentrate our capital on high growth industries in advanced economies," Shashoua added." The sale of the Turkish business is another milestone in this direction. We are pleased to have found the right buyer who can offer the necessary investment and support to the team, along with regional expertise. I would like to thank all of the people in the Turkish business and wish them the best in all of their future success.”
Looking ahead, Shashoua said the group must remain vigilant/mindful of macroeconomic challenges, "however we are optimistic about the next 12 months and this optimism is underpinned by strong forward bookings and an increase in like-for-like customer spend. We enter FY23 with a de-risked and concentrated portfolio of market leading events, clear opportunities for continued growth – both through analogue and digital – and our ever-present commitment and energy to make those a reality”.
Recovery
The group has forward bookings of approximately £68m for 2023 giving confidence for the year ahead. This compares to £50m this time last year going into FY22, which included significant rollovers from events cancelled in FY21.
The company said its strong recovery was down to “high-quality market leading events enhanced by the successful roll-out of the omnichannel strategy across the portfolio”.
The pace of in-person event recovery accelerated throughout FY22. Despite disruption caused by the Omicron variant in the first half of the year, revenue recovery was still approximately 75% in the first half of the year.
Two of the group’s largest events, Autumn Fair (UK) and Groceryshop (USA), took place in September and both significantly outperformed their previous editions. Groceryshop reported revenues more than 40% higher than its largest pre-covid edition and attracted more than 3,000 attendees.
Strategic acquisitions of 121 Group and Fintech Meetup expanded the size and diversity of Hyve’s omnichannel products.
They ran 14 tech-enabled programmes – a combination of digitally powered meeting programmes at in-person events and fully online experiences- in FY22, compared with four in FY21.
