Meeting Mentor Magazine

August 2018

M&A Activity Continues
To Reshape Events Industry

Three weeks ago, two of the largest global tradeshow organizers, Informa and UBM, agreed to merge, creating the largest B2B events company in the world, with a combined workforce of about 11,000 people worldwide. Informa will pay more than $5.5 billion for its rival, with the deal subject to approval later this month by shareholders of both companies.

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“It is clear that the B2B market is moving to operating scale and industry specialization,” noted Informa CEO Stephen A. Carter, in a statement. “Our recommended offer for UBM promises to create a leading B2B information services group with the international reach and market capabilities to take full advantage of these trends.”

Informa’s U.S. portfolio includes such prestige shows as World of Concrete, Greenbuild and the Natural Products Expos East and West. UBM’s big U.S. shows include the biennial Magic Market Week, the Black Hat Conference and the Game Developers Conference. Informa and UBM both made major acquisitions in the U.S. in recent years. Informa acquired Penton in 2016 and Hanley Wood Exhibitions in 2014. UBM bought Advanstar Communications in 2014 and Canon Communications in 2010. Both companies are headquartered in the U.K.

In another deal announced in January, PSAV, a portfolio company of Goldman Sachs and Olympus Partners, acquired Maryland-based Hargrove, an experiential events and exhibitions production company. No financial terms were disclosed. According to a press release on the deal, “the acquisition creates opportunities for PSAV and Hargrove to partner and refer business to one another to facilitate delivery of services that enhance their respective clients’ live event experiences.”

The PSAV deal is the latest in a wave of event-tech mergers and acquisitions in recent years, the largest being the $1.65 billion purchase of Cvent in 2016 by Vista Equity Partners, owner of cloud-based software firm Lanyon.

Big Picture Dynamics
According to Deloitte’s 2018 M&A trends survey, more than 60 percent of the 1,000 U.S. executives surveyed said they expect the number and size of deals to increase this year. Seven in 10 said they plan to divest businesses in 2018 because of financing needs and changes in strategy.

How the recent volatility in the stock market, the new U.S. tax laws and the threat of inflation will affect M&A activity is uncertain. Some analysts see strong reasons for deal-making trends to continue. PitchBook analyst Dylan Cox, in an article last week in The Business Journals, said that many companies still see M&A as the only way to grow their global businesses. ”We expect 2018 to be another strong year for M&A activity,” Cox said. “With cash reserves among the S&P 500 companies at all time highs and financing being readily available, a lot of deals are going to get done.”

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Bloomberg columnist Tara Lachapelle offered a different perspective in an article last week: “It’s too soon to know exactly how this will all shake out, but stock-market weakness combined with rising borrowing rates will bring some sanity back to the M&A market by making it more difficult to explain away big, dumb deals.”  — Regina McGee

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