Events. ITE is the £120m-revenue, London-based operator of exhibitions principally in Eastern Europe and Asia. The seven Ascential shows it is acquiring include market-leading UK brands such as the International Spring and Autumn Fairs, Pure, BETT and CWIEME. The largest of these are entrenched giftware trade shows attended by independent retailers (like the former GLM shows now owned by Emerald in the US). But CWIEME is a global franchise in manufacturing and the 33-year-old exhibition show BETT could also go international. In 2017, the acquired shows had revenues of £77.5m and EBITDA profit of £24m. At nearly four times revenue and 12.5 times EBITDA, this is a full price for these cash-generative but mature, no/low-growth B2B exhibitions. ITE has explained that the acquired exhibitions were “scalable” (pushing back on fears of ex-growth). Since it adds some 60% to ITE revenues and makes the UK its largest market, the deal (which is subject to shareholder approval) can certainly be transformative. This is a year of unending exhibition deals and the pivotal nature of ITE’s acquisition was underlined by its just-released first-half financials that showed like-for-like growth in volume and yields for the first time since 2014. If the company’s troubles with its Russian business are truly in the past, it can now concentrate on trying to prove – at the very least – that the International Spring Fair, long one of the UK’s largest B2B exhibitions, can be returned to growth. Success may, of course, just make ITE another target for its larger UK-based peers, Reed Exhibitions and the ravenous Informa. Even the impressive Ascential might be at risk. Its divestment of the UK shows (like that of the 11 profitable but no-growth B2B magazines for less than 4x EBITDA in 2017) is expected to dilute its profits a bit. Investors will be fine with the short-term impact of such strategic purity – providing Ascential is able to use the cash to buy attractive new businesses and to sustain its rapid growth from: the soaring Money 20/20 and the slightly wobbly Cannes Lions festivals, global information group WGSN, newish e-commerce, and the hazy MediaLink consultancy. No pressure.
Context: Ascential breaks out
