The board of the UK-listed trade show group Hyve (formerly known as ITE) has agreed to a £320mn ($389mn) acquisition by Providence Equity Partners. The deal values each share at 108p, a 41% premium to its 77p stock price the day before it received an initial approach from Providence, which had previously offered 105p per share. With an estimated enterprise value of some £400mn (including estimated £80mn debt), the price is 15x the £27.2mn EBITDA forecast for 2023 and 2x the £165mn revenue. But, looking ahead, Hyve’s 2024 forecast of £45mn EBITDA (£192mn revenue) might yet make it a real bargain deal. Something to excite investors who have been on the sidelines for the past three years.
| Hyve Group Plc £mn | 2024 (e) | 2023(e) | 2022 | 2021 |
| Revenue | 192 | 165 | 123 | 22 |
| EBITDA | 45 | 27 | 22 | 26 |
| Margin | 23% | 16% | 18% | |
| Net debt | 75 | 85 | 71 | 80 |
Hyve Group was in the middle of a transformation when the pandemic hit, changing from a business heavily dependant on developing economies (especially in Eastern Europe and Central and Southern Asia) to one strongly based in the developed economies, particularly the US and UK. But that was only part of the change.
Even before the pandemic, Hyve – whose largest shows are Shoptalk, GroceryShop, Mining Indaba, BETT (education), and the Spring Fair (giftware) – had decided to concentrate on digital-enabled live events. The key to CEO Mark Shashoua’s revolution was “We don’t offer hybrid solutions at our in-person events: we separate online and offline out.”
It had all come from the US show Shoptalk which – with Groceryshop – was acquired in 2019. Hyve’s largest show (in the US and Europe) claims to organize US retail’s “best and fastest growing events and bringing together thousands of industry changemakers to collaborate at unparalleled scale, both online and offline. It uses innovative new formats, including Tabletalks, Hosted Meetings and Meetups.” The retailing industry’s major buyers are invited (with expenses paid) to the event which features meetings of double opt-in, 15-minute appointments for which suppliers pay $650. Last year, Shoptalk in Las Vegas had 7,000 hosted meetings attended by 8,000 delegates (20% of the total number of visitors). It’s a slick approach to combining targeted, high-quality lead-gen meetings – but still with the serendipity of a trade show visit.
Shashoua told Flashes & Flames last year that his 2017 plan had “resulted in our portfolio being streamlined, going from 269 events each with an average revenue of £500k, to 50 shows which now have an average revenue of £3.3mn. In addition, we shifted from nearly 90% of our business being located in emerging markets to the exact opposite, with over 90% now being rooted in advanced economies. We have evolved our offering to customers by adopting an omnichannel strategy, rolling out meeting programmes both in person and online. By using technology to enable the delivery of meetings programmes at scale, we are able to create a network effect around our products.”
The Hyve CEO now has the satisfaction of having what had seemed like a bold, pre-pandemic strategy endorsed by a media-savvy (and exhibitions-experienced) private equity investor ahead of the stockmarket. His public company investors had, quite simply, not known what to make of it. But, coming immediately after the $940mn acquisition of Tarsus Group by Informa, the Hyve acquisition (subject to shareholder approval) signals the growing confidence that – not only are trade show revenues rebounding strongly almost everywhere – but that 2024 is expected to be comfortably ahead of the pre-pandemic 2019 for most organisers. Some may soon be saying the same for 2023.
With the Hyve multiple similar to that paid for Tarsus, nobody doubts a resurgence in trade show M&A is now underway. After three years of pain and wishful prediction, exhibitions are back at the top of media shopping lists. Who’s next?
Now private equity shareholdings are often held for longer than once was usual, their activity is more difficult to predict. But we might note that Blackstone acquired Clarion Events in 2017. The following year, MidOcean acquired Questex and one Providence (a previous owner of Clarion) bought CloserStill.
