CloserStill Media, the 10-year-old London-based organiser of exhibitions principally in the healthcare, learning technologies and medical sectors, has been acquired by Providence Equity Partners for £340m.
The price, based on an estimated 2018 operating profit of some £15m, is a multiplier of perhaps 22 (and more than 8 x revenue), a new high in a season of soaring valuations for exhibitions. Equally striking is that it is just six years since CloserStill was valued at £25m by Phoenix Private Equity which was able to flip its investment to Inflexion in 2015 with the company then valued at £125m even though operating profit that year was just £1.2m.
Revenue has multiplied almost five times in the past four years as CloserStill has built its flagship events including the London Vet Show, Cloud Expo Asia, Data Centre World, The Pharmacy Show, Learning Technologies, and The Dentistry Show.
Since the Inflexion investment, the company has made eight acquisitions – five in 2017 and three in 2018 – but CloserStill founder and chair Phil Soar has stressed that the majority of the company’s growth has been organic, through the geo-cloning of successful shows in Asia, Germany and the US, with the launch of events such as Cloud Asia, Learning Technologies Germany and New York Vet. That’s how the company sustains its 30%+ EBITDA margins.
Soar is an industry veteran whose successful back story includes managing the legendary Blenheim exhibitions and also magazine and part-work publishing companies. But he’s also managed a UK football club and has written books about sport. He and his management team are said to be staying in place at CloserStill and have promised shares to all their staff.
The founder’s carousel-ride around private equity investors looks like a masterpiece of investment management. But it underlines the undimmed enthusiasm for exhibitions, still the only area of traditional media not disrupted by digital. While holdings of investments by private equity firms (in the US, for example) are said to be stretching beyond a traditional three years to more like 5 years, their involvement in exhibitions is helping to grow prices as the companies constantly seek to replenish portfolios.
CloserStill buyer Providence, for example, previously owned Clarion Events (sold to Blackstone in 2017 ) and George Little Management (sold to Emerald in 2011). That’s why they’ve all been swarming round UK-based Mack Brooks where Reed Exhibitions is tipped to pay £250m for a great internationally-focused company but a tightly-managed one with 43% margins where the last profits were £16.7m.
But nobody has missed the point that Reed Exhibitions itself – until last year, the long-time world exhibitions leader but which has consistently had lower profit margins than most of its peers – might seemingly command a sale price of up to £6bn (20 x 2018 operating profit).
For parent company RELX, which is investing big in data-tech and is also now bracing itself for damaging attack on its heady profits from across academia, it’s surely only a matter of time before they cash in. Get ready.