Steve Monnington: The Dealmaker in July

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Steve Monnington of Mayfield Media Strategies, runs the rule over the latest global exhibition deals.

 

I read Phil Soar’s feature ‘Don’t confuse me with the facts’ in last month’s EN with great interest, not least because we have brokered a lot of the emerging market deals he refers to.


Our antennae is generally good but I don’t ever remember saying that the low number of deals in China was because of lack of interest. I did say that the reduction in the number of deals was due to a combination of economic slowdown and high price expectations (and that the CFTC launching competitive shows certainly hasn’t helped) but there is a high level of interest from the many international players in China for deals that make sense.


One business that almost all of the acquisitive international buyers have been chasing is the China Digital Entertainment Expo (known as ChinaJoy), China’s largest exhibition for the gaming sector, but the high price expectations of the owners have been a barrier to doing a deal. However, Hangzhou Shunwang Technology Co has scooped the deal and will acquire 51 per cent for up to 575m RMB (approx £59.5m). Shunwang Technology is a Chinese quoted company providing entertainment software to internet cafes and is an exhibitor at ChinaJoy. The initial payment of 350m RMB represents a multiple of 27x 2015 EBIT.


This is more in line with an internet company valuation than the multiple range paid for exhibitions but Shunwang can afford to pay this as they are currently trading on a Price/Earning (PE) ratio of 81 and will raise up to 2bn RMB by placing new shares to fund this acquisition and other projects. As a reference point, Reed Elsevier’s PE ratio is currently 27 and UBM’s is 31.


It’s not hard to see why the owners accepted Shunwang’s offer over the traditional organisers and arguably they can also add a lot more value to the business. The question is whether the Alibaba/UBM tie-up earlier this year and now this deal, is the start of a trend of significant involvement in our sector by the tech companies.

Global travel and meetings

In the USA, private equity firm Wasserstein Partners acquired Northstar Travel Group, the leading provider of B2B information and events for the global travel and meeting industries, from the Wicks Group of Companies, another private equity firm who themselves acquired Northstar from BV Investment Partners in 2012.

 

Northstar owns Travel Weekly, TravelAge West, Business Travel News, Travel Weekly China, Incentive, M&C China and Web in Travel as well as more than 50 exhibitions in thirteen countries in retail travel, corporate travel, travel technology and the meetings industry. Wasserstein also owns Penton but the two businesses will be run independently.


Staying with the USA, UBM acquired Content Marketing Institute (CMI), organiser of Content Marketing World in Cleveland, Ohio, the leading event in the content marketing sector together with a number of supporting conferences and websites that serve the content marketing community.


Acquisitions in South Korea seem to be the preserve of Reed Exhibitions. Following their partnership with K.Fairs for Kormarine, Korea’s largest international maritime industry event in 2014, they have now acquired the Electronics Manufacturing Korea show and three Home Table Deco Fairs held in Daegu, Busan and Seoul from the same partner.

Annie Byrne
Posted by Annie Byrne
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