The world’s trade show companies are starting to enjoy the post-pandemic rebound. After more than two years of investor worries about whether B2B exhibitions would recapture their longtime magic, profit and cashflow in the face of apparent headwinds from digital media, geopolitics and ESG, many are now trading ahead of pre-pandemic 2019.
That’s why private equity companies are preparing for a deal-making frenzy in 2004. For some, it will be a welcome opportunity finally to trade their aging investments. For others, it’s the chance to climb aboard the trade show express as it picks up speed.
The fact that pe firms control only three of the world’s 10 largest trade show operators (albeit two of the top 5) cannot disguise their investment ambitions for the fast-growing CloserStill and Hyve Group (both in the top 20) – and who knows which larger groups might yet become available? Post-pandemic divestment may not be confined to the pe-owned.
The market-leading Informa (this month celebrating 25 years since its formation, initially as a publisher and conference organiser) is enjoying a share price which has gained 16% so far this year. Its £11bn enterprise value is getting closer to the pre-pandemic peak, a reward for having raised £2.5bn from shrewd divestments – and for having snaffled Tarsus and Industry Dive ahead of the resurgence.
Over the next few months, the year-end financials of listed companies Informa and RELX, in the UK, and Emerald, in the US, will confirm the total recovery of B2B exhibitions. Expectations will be high for 2024.
For ‘incumbent’ pe companies, the agonising question is how soon to sell, while their sidelined rivals are aching for the opportunity to invest.
With notional prices for multi-market exhibition companies currently in the range of 10-12x EBITDA debt-free, we might expect the average soon to be 12-15x – as long as there are no economic shocks beyond those already priced-in.
You can almost hear the wheels turning at Blackstone, one of the world’s largest investment managers. It acquired Clarion Events, of the UK, for £600mn in 2017 and merged it with the Asia operator Global Sources. Before the pandemic, Clarion spent some £500mn on acquisitions, 60% on Global Sources and Penwell, of the US. The two generated £150mn of revenue in 2018-19 and, presumably, even more the following year – before Covid struck and required up to £100mn of additional investment to weather the storm.
This year, Clarion has reached its highest-ever revenue (10% above 2019-20) with the 30% EBITDA margins expected of a trade show leader. The one-time UK-only operator is now at least 90% international.
| Clarion Events £mn | 2024-5 | 2023-4 | 2022-3 | 2021-2 | 2020-21 | 2019-20 |
| Revenue | 500 | 450 | 257 | 171 | 100 | 414 |
| Americas | 39% | 43% | 38% | 31% | 32% | |
| Asia | 30% | 21% | 30% | 46% | 32% | |
| UK | 10% | 20% | 20% | 10% | 17% | |
| Europe | 20% | 14% | 11% | 12% | 15% | |
| ME/Africa | 1% | 2% | 1% | 1% | 4% | |
| EBITDA | 150 | 135 | 26 | (21) | (55) | 58 |
| Margin | 30% | 30% | 10% | — | — | 14% |
| Ave headcount | 1,650 | 1,710 | 1,648 | 1,908 | 2,224 |
Clarion was founded in 1947 as P&O Events by the owner of London’s former Earls Court and Olympia exhibition venues; it became the in-house event organiser, mainly of specialist consumer shows. P&O divested the Earls Court & Olympia company in 1999. But what became the exhibition organiser Clarion Events took off in 2004 as an MBO under longtime CEO Simon Kimble. In the ensuing 10 years, Clarion bought and built what became a increasingly international B2B events portfolio with acquisitions in Germany, Turkey, the US, Thailand, and South America.
Clarion’s progress can be guaged by its own valuation since the 2004 MBO:
| Date | Private equity acquirer | Price £mn |
| 2004 | HG | 45 |
| 2008 | Veronis Suhler Stevenson | 120 |
| 2015 | Providence | 200 |
| 2017 | Blackstone | 600 |
Blackstone won the 2017 auction for Clarion – ahead of five other pe firms – reportedly by pre-emptively offering the £600mn target price ahead of the scheduled final bidding.
Clarion’s financials tell the story of a business that has been transformed from a largely UK operator (35% in B2C events) into a multinational trade show group with a portfolio spread evenly between the US, Asia and UK/Europe. It is now the world’s third largest organiser.
Its largest sectors – Electronics, Energy, Gaming, Technology, and Enthusiast (B2C) – account for some 60% of total revenue. Its top 10 brands – generating 40% of revenue – are:
Consumer Electronics, Hong Kong
IFA (consumer electronics) Berlin
Insurtech Connext (insurance), Las Vegas
FDIC (fire & safety), Indiana
ICE (gaming), London, Barcelona
Distributech, Florida
Design Shanghai
Enlit Europe (energy), Paris
Advanced Therapies Week, Florida
Defence and Security Equipment International, London
The company’s profitability and prospects have, arguably, been enhanced by a subtle (and timely) move towards integrating publishing, information and training services into some of its key sectors. In 2022-23, these activities accounted for about 10% of total revenue. An additional 10% of revenue is accounted for by paid-for attendance at events which imay be an opportunity to grow revenue security through membership schemes in individual sectors.
A notable example is the ICE 365 Content Series: data, analysis, online meetings, video and webinars from its gaming events which also provides “a one-stop shop for news information, analysis and data”, training courses and free-to-join research and knowledge sharing. Many trade show companies are quietly committed to such integration wherever there is opportunity. But, for Clarion, the growing emphasis on selectively plugging the information gaps (and keeping close to customers and markets beyond the events) might also provide some reassurance to would-be investors that the company will be better insulated – if or when there’s a next health or economic shock.
That’s a message not lost on Blackstone as it prepares a divestment strategy for Clarion whose pre-sale tidy-up has included the divestment of operations in Dubai, South Africa and Brazil.
The US-based investor – which may have committed £1.1bn to the trade show group over the past six years – will be all over the rising values of smaller events companies for a clue to the potential Clarion price.
Let’s guess.
At a price of 12x £150 EBITDA in 2024-5, a debt-free Clarion would be worth £1.8bn. But a 14x multiple would mean £2.1bn. A net gain of some £1bn – after 2-3 years of Covid – would, presumably, be a welcome result for Blackstone.
But it will also be preparing for possible headwinds. Clarion’s c20% of revenue from China may deter some US bidders, despite the fact that its powering Global Sources subsidiary is principally in Hong Kong with an IT infrastructure managed in Singapore – because it had previously been US-owned. China is not the flavour of the month in some US companies.
Some would-be bidders won’t like Clarion’s seven Defence & Security events variously in the UK, US, and Japan. They may even remember how RELX (as Reed Elsevier) was forced to sell many of the events to Clarion after a campaign by its Lancet medical journal whose staff “struggled to reconcile ties to the arms trade with a publication often covering the impact of war”. Social media can, of course, be yet more troublesome than a mere group of journalists.
Clarion’s UK-based Enthusiast B2C portfolio (horses, cars, babies, antiques, and holidays) is less than 5% of total revenue but may also be a slight drag on the company’s value as an international trade show organiser. The B2C could, conceivably, be sold separately.
RX, the £1bn-revenue trade show subsidiary of RELX, may come into the conversation when Clarion is put up for sale. Their events are neatly complementary. Could a merger present a golden opportunity potentially to create a new trade show leader? Both companies might already be dreaming about such a combination in an amazingly fragmented global market where even Informa only has an 8% share and few deals would be blocked by regulators.
But Blackstone may do best with a hot-blooded auction to get Clarion’s fifth private equity owner. A £2bn+ deal to mark its 20 years since MBO?
We may not have long to wait.
