MAG has strong information and events in three main B2B groupings: Health, Education and Social Care; Engineering; and Music. The company has become a strong exhibition organiser as well as a solidly profitable publisher of B2B magazines. Its 2017-18 revenue/ EBITDA was £43m/£7.2m (2016-17: £37.1m/£5.5m). Current year revenue is expected to be some £55m, with about 40% from exhibitions (all acquired or launched in the last seven years).
For the listed company Centaur Media, which last year committed itself to a sell-off in order to focus exclusively on its highly-attractive XEIM marketing services information and events, this latest deal brings aggregate proceeds so far to £21.75m, with negotiations reportedly to be continuing for The Lawyer. So far, so good. But one analyst told us this week that the price of the MAG deal seemed low given that the market price of solidly-profitable exhibitions has averaged at least 8 x EBITDA. The metric would imply that Subcon alone (making perhaps £500k) could be worth substantially more than the price being paid for the whole engineering portfolio.
That’s the problem with what is effectively Centaur’s commitment to sell these assets for whatever is the highest price available at the time. It remains to be seen whether The Lawyer – unarguably the most valuable brand Centaur is offering for sale – attracts offers sufficiently attractive to justify a sale, rather than continuing to manage it (appropriately enough) alongside the XEIM operations being retained. Just think.
