Meeting Mentor Magazine

December 2018

Business Events Drive Wave of
2016 Mergers and Acquisitions

The business-to-business (B2B) event space saw significant merger and acquisition activity this year, with U.K.-based business information provider Informa Plc leading the pack with the purchase of Penton Information Services for $1.6 billion.

New York-based Penton adds 30 exhibitions/conferences to Informa’s portfolio of more than 160 trade and consumer shows around the world. With the Penton acquisition, the U.S. becomes Informa’s largest single market.

UBM, one of the world’s leading B2B events organizers, is another British company making major acquisitions in the U.S. in recent years. In April, UBM bought fashion shows in New York and Las Vegas from Business Journals Inc. for $69 million. That was followed by the $17.6 million purchase of the Content Marketing Institute, including the Content Marketing World conference. And in November, UBM picked up the Battery Show, a 7,000-attendee trade show in the Detroit area.

Overall, there were 22 global M&A deals involving B2B events in the third quarter of this year — a high point for activity over the last five years, according to Steve Monnington, managing director of Mayfield Media Strategies, and a frequent speaker on global M&A trends in the exhibition industry.

“Two years ago more than half of these deals would have been in emerging markets but in this case it’s just two – one in Mexico and one in China – with the rest focused primarily on the U.S.and U.K.,” he wrote in a recent column in Exhibition World. “The drop in emerging market activity is a combination of the lack of good opportunities there and an increasing focus towards the U.S. and U.K., where the number of businesses coming to market is very high.”

Another reason for the attractiveness of U.S. trade shows and conferences is the strength of the dollar. The British pound took a beating after the decision to leave the European Union, but U.K.-based Informa will generate less than 10 percent of its revenue in the U.K. after the Penton acquisition, benefitting from a favorable exchange rate when overseas earnings are converted into pounds.

In the past, M&A activity in B2B media and event space has been dominated by private equity companies, Monnington says in his Exhibition World column, but with more and more companies like Informa and UBM moving into this space, that may be changing, even as there is an “enormous amount of PE money looking for a home.”

Conferences and trade shows are still luring plenty of private equity investment, however. The Wicks Group, for instance, purchased Innovation Enterprise in May, including the company’s 122 events around the world. Wicks also paid $50 million for Bisnow’s event business.

Events are attractive for investors because they typically have strong margins and cash flow, little working capital requirements, relatively small staffing and good geo-cloning opportunities, according to JEGI, a U.S.-based investment bank providing M&A services in the B2B media/events, technology and marketing sectors.

According to JEGI, the number of M&A transactions this year so far across all industry sectors is down from 2015, 1,660 transactions compared to 1,758 last year. But overall deal value is up 75 percent, thanks to several mega-deals, such as Microsoft’s purchase of LinkedIn for $29 billion. JEGI is predicting 2017 will be another good year for M&A activity.

“Given the Republican Party’s control of the executive and legislative branches of government, we expect the financial markets to react favorably,” JEGI’s Q3 2016 Overview report states. “With robust equity and debt markets, and excess cash in the hands of both corporate and private equity buyers, we expect M&A activity to remain strong in 2017.” — Regina McGee

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