Insight
While there is no need to name names , we can agree that ( not so many ) PE investors currently own most of them . Another stat-drop from Phil Stone better explains this :
“ In 2012 only one of the top 20 organisers was owned by private equity ; now it ’ s six of the top 20 .”
He added the high level of interest indicates an imminent acceleration in consolidation within the industry . With the necessity to sell and the rapid , aggressive deployment of capital , there will likely be an increase in bolt-on M & A activities . Consequently , some of these entities will inevitably merge in due course .
That being said , there is already evidence of a single PE investor owning more than one organiser and not merging them , and another one owning an organiser and a venue and now launching another organiser ! All this might change in so many different ways and quickly . Exciting times ( not too far ) ahead .
Adding value In such a landscape , it is clear that there is ( again ) an insatiable appetite for medium-scale businesses that have their house in order . Julia Borospolets explained the key strategy for RX is having a really good playbook and acquiring more bread-and-butter events , but also being able to add value through digital products , sales machines , and operational excellence .
I can attest to this from my own experience at corporate level organisers . Beyond the obvious ( acquisition vs EV valuation ) multiple arbitration play , value creation in acquisition cases is often propped up by expectations that the acquirer ’ s best practices , sales networks , and systems will create new value , and yes , some synergies on top for good measure . So , there ’ s a preconceived notion of where to add and extract value .
Similarly , on the Private Equity side , entrepreneurially strong teams are being backed , and they , in turn , back other entrepreneurial teams who apply their special sauce . Often , the PE investor already has the workings of their VCP ( value creation plan ) in hand , ready to challenge / motivate their management on day one . And you can rest assured it includes fasttracking M & A as a key enabler .
Again , speaking from first-hand
Stax Top 20 Exhibition Organisers ( 2022 Revenues ) experience as a previous C-level exec at a PE-backed organiser and , lately , buy-side advisor on a large deal ( that we lost ), the acquirers have already convinced themselves of how they can add value to your business . It just has to be unlocked .
So , if you find yourself at the helm of such a business , I would double down on your fundamentals , get your business ’ s basics right , and also build a streamlined tech stack that can play well with others . You can be sure your business ’ s value will be upgraded or downgraded based on the simplicity , interoperability , and robustness of your systems as much as anything else . You can use my self-assessment
. checklist to get a feel for where your business ’ s digital capabilities might be . Contact me at : mailto : baris @ barisonay . com or visit : https :// barisonay . com /
Lastly , If you ’ re willing to be one of the big consolidators and are wondering what to do about all this , here ’ s what HBR thinks you should do :
“ Because of the large number of acquisitions occurring in this stage , companies must hone their mergerintegration skills . These include learning how to carefully protect their core culture as they absorb new companies and focusing on retaining the best employees of acquired companies . Building a scalable IT platform is also crucial to the rapid integration of acquired firms . Companies jockeying to reach Stage 3 must be among the first players in the industry to capture their major competitors in the most important markets and should expand their global reach .”
So , even for the consolidators , it ’ s all about a streamlined digital backbone , supporting a no-nonsense business in growth ! EW
l A full recording of this session is available in the UFI Member Zone . If you ’ re not a member , contact Nick
Dugdale-Moore at UFI to get involved .
www . exhibitionworld . co . uk Issue 5 2024 49