Stephen Brooks, former owner of the Mack Brooks exhibitions company, is getting back into B2B information and events three years after selling out to Reed Exhibitions (now RX) for some £200m. His new company, Market Dynamics Media (MDM), has acquired majority ownership of the £10m-revenue DCD International Ltd (DCD), a B2B multimedia business. DCD has been publishing video and digital content content and organising conferences and training for the digital infrastructure and data centre market since 1988.
Brooks now owns 77.5% of DCD alongside the management, led by CEO George Rocket (which retains 20%) and former longtime chair of Clarion Events Simon Kimble (2.5%) who will chair the acquired company. The deal is believed to value DCD at some £20m (for 8x £2.5m EBITDA in 2021). Brooks and Kimble have bought 60% of the shares from the London-based ReSolve Capital Partners and 20% from the DCD management, including founder Rockett.
It is believed that some 60% of DCD revenue comes from online marketing services and 40% from training and conferences. In March 2021, it recorded 2m unique users, 13.2m audience for its ads, 74,000 virtual conference attendees and 123,000 newsletter subscribers – some 40% above the previous year.
The business has recovered from the loss of live events during the pandemic and expects this year to achieve revenue close to the 2019 peak:
Given the track record of Brooks and Kimble (who last month stepped down from his executive role at Clarion after 21 years), the new owners are expected to expand the events but also to diversify into, perhaps, two additional verticals.
Brooks sold his exhibitions company to RX in January 2019 – a year before the pandemic paralysed the events industry.
The privately-owned Mack Brooks had been established in 1965 and organised more than 30 business-to-business events in 14 countries, across airport technology, chemicals, packaging, and fasteners. The company – whose major brands included Euro Blech, InPrint, RailTex, FastenerFair, InterAirport and ChemSpec – had long been one of the UK’s most admired independent exhibition organisers. One flagship was the Fastener Fair with 22,000 net sq m of exhibition space occupied by 900 companies from 40 countries.
Stephen Brooks had spent years fending off bids from larger rivals. In 2016-17, Mack Brooks had made operating profit of £16.7m on revenue of £38.5m (a 43% margin). It was a solidly international business: some 92% of revenues came from outside the UK, with profitable operations in the US, China, Singapore, India, France, and Germany. Even its complementary publishing was soundly profitable.
It was a gem of a business and – when Brooks accepted the RX bid after a hot auction process – there were several disappointed exhibitions bosses who had thought they were on some kind of a long-term promise whenever he decided to sell. RX actually pipped Inflexion private equity (former 47% owner of UK-based CloserStill) to the deal.
The pre-pandemic price was eye-catching. The Mack Brooks strong portfolio of non-annual shows meant that its operating profit, in the previous four years, had swung alternately between £2m and £20m. The complex corporate structure, international subsidiaries and joint ventures made tricky reading. But, at one level, the profits of those four years have averaged £13m. So, the estimated £200m purchase price could have been 15-16x the average EBITDA.
It is easy to sense that the rested Stephen Brooks – who always loved the cut-and-thrust of trade shows – is thrilled to be back, doing something more than investing his sale proceeds in property. Like many others, he has been impressed by the new wave of B2B companies including Industry Dive, and must be itching to find more acquisitions for his new business. Just watch.