A March trio of mega deals among global exhibition sector big beasts illustrate the strength of the industry’s comeback and its attractiveness to Private Equity and investors. Paul Colston breaks it down
The largest exhibitions group in the world, Informa strengthened its presence in growing regions and markets significantly with the acquisition of B2B events group Tarsus from Charterhouse Capital Partners in a deal valued at $940m and announced 9 March. The deal was put together in just five weeks. Less than a week later Hyve Group announced it was selling to private equity group Providence Equity Partners in a $580m deal. And that news came just a day after events and hospitality technology provider Cvent had been sold to Blackstone in a mammoth $4.6bn deal.
Informa’s swoop for Tarsus
Stephen Carter, group chief executive, Informa, said his team had long admired the Tarsus business “which, like Informa, has been built around major brands in attractive, specialist B2B markets in the growing regions of Asia, China, the Middle East and the Americas”.
Douglas Emslie, chief executive of Tarsus Group (pictured left) returned the compliment saying he, “could not think of a better partner than Informa to lead our brands and colleagues through the next phase of growth and expansion”.
“They’ve always wanted to buy us. I always thought they would be the best home for us,” Emslie told Mash Media. “The cultures are a good match, geographically we’ve got good footprints.”
Emslie also predicted data and digital would be the future of the business under Informa control.
Both companies are seeing a strong return to the market for Live and On-Demand B2B Events in 2023, although the markets might have expected – and Emslie himself certainly admits to expecting it – a move for Tarsus likely 18 months to two years down the line. The ‘pre-emptive strike’, as it were, was certainly a surprise, but can be seen as a confident stake on the market continuing to come back fast, particularly in China.
The combination of Tarsus with Informa’s Live and On-Demand Events portfolio brings together market-leading brands in attractive B2B markets. There is a strong commercial and cultural fit between the two businesses, creating reach and depth in Asia, the Middle East and the Americas.
There is strong portfolio alignment in Healthcare (Health Connect Partners), Beauty & Aesthetics (A4M, LiVDerm), Packaging (Labelexpo), Infrastructure (Intertraffic), Aviation (Dubai Airshow), Fashion (SIUF, OFFPRICE) and Sustainability (Intersolar, Mexico WindPower).
Informa projects annualised combination benefits of c.$20m through efficiencies in procurement, real estate, technology, event contracts and other areas.
Other benefits of the deal outlined by Informa include its first party data engine, IIRIS (15m+ KEMA), which is set to directly benefit from Tarsus c.515k attendees, 8,350+ exhibitors and estimated audience (KEMA) of c.1.4m across its top ten exhibition brands.
The initial Tarsus enterprise value of $940m implies a post-synergy multiple of c.9.9x EV/EBITDA in 2023/24 and sub-9x in 2024/25 (averaging years to remove biennial effect).
The consideration is financed in cash and $210m of Informa equity. An additional earn-up of $45m is payable if and when Informa’s share price reaches 850p within a two-year period.
Tarsus owns and operates a portfolio of 160+ Live and On-Demand B2B Event brands and its top 10 brands are set to expand Informa’s Tier 1 portfolio to more than 85 brands. In 2023, Tarsus full year revenues are estimated to be more than £175m.
Informa has now embarked on a Combination Programme which it says will be focused on maximising 2023 performance, ensuring the portfolios enter 2024 operating as one company under the Informa brand.
Informa’s Mark Temple-Smith will step in as executive chair of Tarsus from completion through to the end of the Combination Programme in January 2024. He is currently Informa Markets chief operating officer and was formerly the CEO of Asia for Tarsus.
Emslie will become a senior advisor to the Informa Group through the Combination Programme, guiding on talent, brands and partnerships.
Completion of the deal is expected by 1 July 2023.
Stephen Carter is clearly bullish about the future and is confident the business will be running at 110%-115% of 2019 revenues in 2024 – although he has acknowledged that price rises would play a part here.
The Informa deal for Tarsus was pushed through at pace to meet the Informa financial reporting deadline and there was no bidding process – unusual in any deal of that size. Also of note was the fact taht a large part of the consideration was not in cash, but in Informa shares. Should Informa shares rise from 675p to 850p within two years the deal will become worth over $1bn.
PE backs the Hyve platform for growth
US firm Providence Equity Partners agreed to acquire UK-based exhibition business Hyve Group with an offer of 108p in cash for each Hyve share. The deal values the international exhibition organiser at approximately £481m (US580m).
A previous bid of 105p per share had been rejected. The Hyve directors, who have been advised by Goldman Sachs International and Numis, said they considered the new terms to be reasonable and unanimously recommended the deal. It now goes for approval to Hyve’s shareholders and is also subject to anti-trust clearance in the US.
Hyve’s global portfolio of market leading brands is divided across four divisions: RetailTech & FinTech, EdTech & Natural Resources and Retail, Manufacturing & Engineering and Asia. The portfolio consists of 33 in-person events and 23 tech-enabled products and includes brands such as: Shoptalk, Spring Fair, Bett, Mining Indaba and the recently acquired Fintech Meetup.
Commenting on the acquisition, Andrew Tisdale, a senior managing director of Providence Equity Partners, said: “We are delighted to be investing in Hyve and supporting Mark [Shashoua – CEO, pictured left] and the management team, including with capital, to support their growth plans.”
Providence is an experienced investor in the events sector having been the majority shareholder of CloserStill Media since 2018, and having previously invested in Clarion Events.
So, the first half of March would suggest that the world of finance believes that trade shows sure are back and worth backing.
Cvent raises the stakes again
Sandwiched between the Tarsus and Hyve deals was the daddy of them all – a huge $4.6bn acquisition by PE funds managed by Blackstone to take private event management software specialists Cvent.
A wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) is a significant minority investor alongside Blackstone as part of the transaction.
Cvent offers a suite of technology solutions to power the entire event management process and claims 22,000 customers globally in the corporate, non-profit, higher education and hospitality sectors.
Since its founding in 1999, Cvent has helped manage more than five million events, and listed over 302,000 hotels and venues as of 31 December, 2022 on the Cvent Supplier Network, an online platform with tools to search, negotiate and contract with hotels and venues for event space.
“We look forward to our next chapter alongside the Blackstone team,” said Reggie Aggarwal, founder and CEO of Cvent (pictured left). With Blackstone’s backing, Aggarwal said the plan was to continue to invest in the business, “and deliver the innovative solutions that meet our customers’ needs and power the meetings and events ecosystem.”
David Schwartz, a senior managing director at Blackstone, sounded just as bullish as Informa’s Stephen Carter and the Providence team, when he said: “The continued events and travel recovery is one of Blackstone’s highest-conviction investment themes."
"Given our extensive experience in the hospitality, events and real estate sectors, we believe Blackstone is well positioned as a growth partner for this exceptional business.”
Vista Equity Partners, majority stockholder of Cvent, agreed to invest a portion of its proceeds as non-convertible preferred stock in financing for the transaction.
“Since Vista first invested, Cvent has undertaken considerable business transformation and has been a testament to how we partner with founders like Reggie to help their businesses scale and thrive,” said Monti Saroya, chairman of the Cvent Board of Directors, co-head of the Vista Flagship Fund and senior managing director.
“The newly digitised events landscape, coupled with Cvent’s strong existing customer base and commitment to innovation, has provided a new growth vector in a post-Covid world. We look forward to seeing the company continue to execute on the opportunities ahead of it.”
The transaction is expected to close mid-year 2023, subject to approval by Cvent’s stockholders and required regulatory approvals. Cvent will become a privately held company.
So, with their wager on the strong, the new owners of Tarsus, Hyve and Cvent have identified digital and data as big areas for exploitation and growth, while appreciating the returning power of the face-to-face event paradigm.
After some difficult years, the global exhibitions organiser locomotive has clearly worked up a mighty head of steam and is rolling down the track at speed again.
