Strategic vision Louise Obadia who leads due diligence for Plural says sellers need to pay closer attention to the details to get the best deals from PE investors .
She says investors are always looking for strong management teams , strategic vision and clear paths of delivery .
“ It ’ s all about growth ,” she says . “ And how you are going to get there . How you ’ re going to deliver it . There isn ’ t much difference between PE investment and corporate , it ’ s just that PE often understand the model they are buying slightly less , so they will pay more attention to the data , to the numbers .
“ As a PE business you are not buying something to fit into your portfolio , therefore the commercial synergies are very focussed towards the growth of that asset . Whereas when you ’ re a corporate acquiring an asset , there ’ s two layered synergies and different complexities . There ’ s a different lens on growth .”
Jonny Baynes and Louise Obadia ( Plural4 )
Data driven Baynes and Obadia agree that PE appetite is returning , but say there is a shift towards more digitally rounded and data driven businesses .
Baynes says : “ Whereas digital assets were perhaps unloved previously and people would actually try to divest them - now they are positively looking for those . Community is not new , UBM used to talk about that 10 years ago , but it ’ s come back . It is thinking about what ’ s best for communities , be it event , be it digital .
“ In that first period from 2014 , half of [ deals ] were straightforward exhibitions , the other half conferences and confexes . By 2020 over half were one-to-one hosted buyers , a couple of exhibitions here and there and lots of focus on digital assets .
“ Arc buying AgriBriefing is a great example – they ’ ve got events , data products , subscriptions . That ’ s now seen as considerably more attractive than it was three years ago . Quite often the value of exhibitions
“ For larger assets , to realise value , it might be worth holding off , if nothing else if you are a big portfolio you don ’ t want to be trading below 2019 levels when you come to market .”
companies data is not what it could be . One-to-one model data is deeper , but also the obvious thing was they were much more resilient during Covid-19 .”
Obadia adds : “ It ’ s a different level of data , more granularity , it ’ s much more behavioural and intentive , rather than just the data traditional organisers would take off a registration form and put in their database .”
Contingency When it comes to preparing to sell , Baynes recommends preparation and forward planning .
“ If I was a PE owner , I would want to know what levers you are going to pull or what you have available in the case of another disruption . It appears right now fairly clear that events will come back , haven ’ t been impacted structurally by what ’ s happened , any more than when events have been cancelled over terrorist incidents .
“ However , the focus in the next round will be what have you got up your sleeve , what ’ s your contingency , how are you going to bring your customers together if you ’ re not allowed to do it in person ?
“ Since the first wave of virtual events a number of event executives have been asking themselves ‘ should we be more digitally enabled and what does that look like ?’ But I don ’ t think there ’ s been any clear answer – certainly not one size fits all .”
So , with M & A not quite back to full throttle , should owners looking to sell keep their powder dry in the immediate future ?
“ For larger assets , to realise value , it might be worth holding off , if nothing else if you are a big portfolio you don ’ t want to be trading below 2019 levels when you come to market ,” Baynes recommends . “ For smaller assets , I wouldn ’ t say that necessarily applies . Some of them are ahead of 2019 anyway .”
Obadia concludes : “ Why wouldn ’ t you take that investment now ? Particularly if you ’ re tied in on an earn-out as an owner . Why wouldn ’ t you take the money now and ride the growth wave , with the investment rather than on a shoe-string ?” EN
March — 25