In the US, investment bankers are predicting a big year in M&A. Stockmarkets are near all-time highs with inflation and interest rates (more or less) stabilised. It all seems to point to a recovery in media M&A which has, to say the least, been sluggish for the past two years.
An early sign of the euphoria may be Clarion Events whose owner Blackstone has seemingly expected £2bn (14x EBITDA) for the world’s third largest trade show organiser. On the basis that this is likely to be not much more than 12x EBITDA in the year ending this month (January 2025), it should now be achievable. Its been a long time coming for Clarion’s fourth pe owner which acquired it back in 2017 for £600mn and has since invested more than £400mn in 10 acquisitions.
The scuttlebutt in 2024 was that even some of the keenest trade show investors among private equity firms had been worried by two aspects of the Clarion portfolio: China (accounting for an estimated 30% of revenue) and defence. It is almost two smart to connect the two because (maybe) the worries about China and other security concerns are encouraging Western countries to increase their spending on defence. For all those real or imagined fears, Clarion is a more genuinely international trade show business (spread almost evenly across North America, Asia and Europe) than any except the two world leaders Informa and RX.
Ultimately, its expected 50% increase in revenue and almost 3x in revenue in the past four years (and record margins) seem likely to intensify the auction for the 78-year-old Clarion which may be sold in 2025:
Clarion Events £mn Yr end Jan. SnapShot | 2025* | 2024 | 2023 | 2020 |
Rev | 500 | 433 | 257 | 414 |
US/Can | 35% | 43% | 32% | |
Asia | 36% | 21% | 32% | |
Europe | 28% | 34% | 32% | |
ME/Africa | 2% | 2% | 4% | |
Ebitda | 150 | 130 | 26 | 58 |
Margin | 30% | 30% | 10% | 14% |
People | 2,009 | 1,710 | 2,224 |
A £2bn price tag for Clarion would encourage the UK-based but increasingly international CloserStill Media (CSM). Its expansion in medical (27% of revenue, transport (23%), IT (22%) and Learning tech (19%) seems likely to have delivered a 50% EBITDA increase in 2024 and record 32% margins, with especially strong revenue growth in the US and EU. In the five years since Providence (previous owner of Clarion) acquired CSM for an enterprise value of £340mn, it will have trebled both revenue and EBITDA.
CSM was the 14th largest trade show company in the Stax top 20 last year (up from 20 in 2022). It will probably be in the top 10 for 2025 and may soon be valued at almost £1bn (14x EBITDA?). Apart from its growth profile (and an EBITDA margin that might just have reached 32% in 2024), CSM’s broadly 60:40 revenue split between tech and healthcare has won it superfans among private equity firms. They may get the chance to acquire CSM during 2025 when revenue seems set to increase to £230mn and EBITDA to some £75mn which (with perhaps 65%+ of the year’s business already booked) might make that captivating £1bn target price even more achievable:
SnapShot CloserStill Media | ||||
£mn | 2024* | 2023 | 2022 | 2021 |
Rev | 200 | 143 | 104 | 31 |
UK | 28% | 58% | 54% | 71% |
US | 27% | 17% | 21% | 16% |
EU | 34% | 16% | 16% | 13% |
Asia | 11% | 7% | 9% | — |
Ebitda | 64 | 42 | 27 | (3) |
Margin | 32% | 29% | 26% | — |
People | 839 | 603 | 384 | 277 |
In some ways, the two trade show companies reflect the diversity among larger operators in an industry which has rebounded strongly from the pandemic. For all the fact that the exhibitions rebound may just be flattered by 2023-4 price inflation and that many companies are also carrying the weight of additional debt taken on during 2020-21, it is clear that events are generally growing more strongly than B2B information companies (perhaps with the exception of Price Reporting Agencies).
Again, there is a world of variation in the growth rates.
Among the rising stars is the company variously known as Times Higher Education and THE World University Rankings, which had been acquired by Inflexion private equity for £80mn in 2019. It has since invested some £50mn in acquisitions including Inside Higher Education and Poets & Quants in the US, and BMI Globaled, Datahe and The Knowledge Partnership, in the UK. The self-described “provider of data, analytics and consultancy to universities, corporates and governments worldwide” claims an audience of 22mn for its data on 9,000 universities in 155 countries.
The 54-year-old company (originally a publishing supplement to the Times of London) has increased its revenue almost 4x since 2020 and reached a 25% margin in 2023. Key to the growth and the ‘educational tourism’ market that has turbocharged it is the fact that almost 30% of revenue comes from outside the UK (up from 15% in 2020).
With 2024 EBITDA said to be c£18mn (doubled in three years), the subscriptions-led THE might be expected to achieve an enterprise value of at least £300mn (15x EBITDA). Although there had been indications of a sale process in 2025, investors suggest that this might not now happen until late this year or 2026. Presumably, having prepared for the process, Inflexion may be ready to re-start it as/when the prospects seem to improve.
SnapShot Times Higher Education | ||||
£mn | 2023 | 2022 | 2021 | 2020 |
Rev | 53 | 40 | 22 | 14 |
UK | 71% | 68% | 87% | 85% |
RoW | 29% | 22% | 23% | 15% |
Ebitda | 13 | 9 | 3 | 1 |
Margin | 25% | 23% | 16% | 4% |
People | 330 | 290 | 210 | 176 |
When things (eventually) start to move, the process will be watched closely by Montagu Private Equity which acquired the London-based Jane’s data and intelligence provider to the defence and aerospace sector, from IHS Markit, for $470m. That was in 2019 when the company had $70mn revenue and $28mn EBITDA.
The legendary Jane’s had been founded 121 years ago by Fred Jane who had begun sketching ships as an enthusiast naval artist while living in the UK port of Portsmouth. His hobby developed into the 1898 publication of “All The World’s Fighting Ships” before diversifying into other military books and magazines. Jane was reputedly also involved in pre-war British intelligence services. In 2007, Jane’s Information Group was acquired by IHS from the Thomson Corporation, of Canada. It paid $183mn to bring together the two companies as “global operators with long-standing customer relationships in aerospace, defense and government.”
Its revenue is now derived mainly from database subscriptions and consulting, although the company may still be best known for Jane’s Defence Weekly and the Jane’s Fighting Ships annual analysis of the world’s 165 navies. At a time of increasing global spending on defence and security intelligence, Jane’s is highly-valued. But would-be buyers might be cautioned by the relatively low revenue growth rates (just 2% in 2023) and tightly squeezed costs which produced a record 44% EBITDA margin in 2023. The sense in which the business is “mature” may be reinforced by the fact that the 2023 geographical revenue split between EMEA (50%), the Americas (32%) and Asia (16%) has – counter-intuitively – hardly shifted in the past four years.
On the flipside is the fact that – although revenue growth has been relatively low – Jane’s has been growing its dependance on high-value data subscriptions which now account for 90% of all revenue, compared with 83% in 2020. Would-be buyers might usefully be focused also on the ‘services’ income (including consultancy) which has declined in recent years and is now at the same level as 2020. That seems to indicate the potential for growth:
SnapShot Jane’s | ||||
$mn | 2023 | 2022 | 2021 | 2020 |
Rev | 91 | 89 | 82 | 72 |
EMEA | 45 | 46 | 41 | 36 |
Americas | 29 | 28 | 27 | 24 |
APAC | 16 | 16 | 14 | 12 |
Data subs | 82 | 80 | 70 | 60 |
Services | 5 | 5 | 6 | 4 |
Books | 3 | 3 | 4 | 4 |
Ebitda | 44 | 42 | 32 | 28 |
Margin | 49% | 47% | 39% | 47% |
People | 216 | 196 | 199 | 183 |
These four UK-based companies will provide something of a barometer to the market for B2B businesses in 2025.. If the US buoyancy grows even more strongly with this month’s change of presidential administration, the list of trade show and information deals will increase accordingly and so will prices.
Meanwhile, the Delinian spin-off from the former Euromoney continues the divestment of its now 13-company portfolio with the third sale, of Insurance Insider to private equity, after the US real estate events business IMN was sold to Informa and IJGlobal to Green Street. A busy year has begun.