Tarsus, the UK-based, private equity-owned trade show group, has acquired a majority share in the world’s leading printed circuit board event, the International Electronics Circuit Exhibition (IECES), in Shenzhen, from the Hong Kong Printed Circuit Association. The deal takes effect after this year’s event in December.
The annual 50 sqm show is believed to have revenues of some $12-15m and some $5m of EBITDA. Tarsus is estimated to have paid about $20m for a shareholding slightly in excess of 50% – valuing the business at about three times revenue and 10 x EBITDA. The investment takes to more than $70m the Tarsus spending spree since it was acquired by Charterhouse Capital Partners in 2019.
China now accounts for about 25% of the Tarsus portfolio, neatly divided between Shanghai and Shenzhen. Its major Chinese events include Labelexpo, Home Furnishing Expo, and the Underwear Show.
IECES was first launched as South China International Printed Circuit & Equipment Fair in 2002 and is now one of the leading platforms for the Printed Circuit Board (PCB) and Electronics Assembly (EA) industries. In 2020, it attracted some 400 exhibitors (52,500 sqm) and 48,000 visitors. The 2021 edition sees a move to the new Shenzhen World Exhibition & Convention Center.
The show’s significance is underlined by the fact that Shenzhen is in the Pearl River delta area which accounts for some 50% of the world’s manufacturing of printed circuit boards.
The global market for PCBs is projected to reach US$78.7bn by 2024 as demand remains strong, mainly due to the 5G roll-out and their increasing use in electrical equipment and connected vehicles.
In 2019, Charterhouse paid $703m for the then listed Tarsus Group, an estimated 12 x EBITDA. The company had revenue/ operating profit of $98.3m/ $14.5m for the 4.5 months of 2019 under new ownership. Some 52% of revenue was EMEA, while the Americas accounted for 38%. The more recent investment in China is, therefore, changing the profile of the business.
Under Charterhouse, Tarsus has acquired: Smarter Shows (UK), TyreXpo (Singapore), BizBash Media (US) and BodySite Digital Health, a patient care management and education service. It also bought 50% shares in Jiuzhou and Shanghai Intex, in China, and TAK, in USA/Mexico, and now the c51% shareholding in IECES.
Almost 70% of the $51m investment (before this week’s deal) was for Smarter Shows. But $18.5m (46%) of the total was deferred consideration (including 42% of the Smarter Shows price), so the actual sums paid may have been substantially reduced by the pandemic suspension of live events in 2020-21.
Significantly, the Tarsus exhibitions in the medical and labels markets together accounted for almost 50% of the book value in its last accounts. These events – together with those in aerospace (notably the Dubai airshow), US travel, and China textiles – accounted for some 75% of the value.
This latest China investment – which brings to $70m the Tarsus acquisition spree since the private equity buyout – underlines that Charterhouse is one private equity firm not harbouring doubts about the recovery prospects and longer-term growth rates of trade shows.
That must imply further acquisitions ahead for Tarsus. It might also add to whispered speculation that some pe firms are now assessing the prospects of bidding for either of the world’s two largest groups, the listed Informa Plc and RX (part of the listed RELX).
Whether or not trade show life really is getting back to ‘normal’, M&A is moving strongly again. It may be a busy 2022.
