News
The Dealmaker
Steve Monnington of
Mayfield Media Strategies
runs the rule over the latest
global exhibition deals
M
&A has hit a brick wall following
the Covid-19 lockdown. The major
organisers who make up the majority
of the buyers have put acquisition
processes on hold as they prioritise
restructuring their own businesses,
dealing with the postponement or
cancellation of their shows, and
furloughing staff.
The brilliant re-purposing of the
main exhibition centres into temporary
hospitals only adds to that uncertainty.
However, once the mist clears the clever
buyers will take advantage of market
sentiment - independents are wanting
some support and looking to partially
cash out. Clever deal structures will
strike a balance between de-risking for
the buyer but giving a recovery upside
for the seller.
Unless it’s a fire-sale, it’s currently
near-impossible to value an exhibition
business when it’s not clear when the
show will take place, and what the
impact of the economic downturn
will be. However, some organisers and
Private Equity firms see an immediate
opportunity for possible bargains
as independent organisers feel the
financial pain, and some independents
won’t have any choice and will be forced
to look for cash flow.
However, the majority are fully
focused on staying in business and
plan on running their shows later in
the year. No-one wants to sell out their
life’s work for a fraction of its value. The
strong should come out of this stronger.
And many of those who have been
forced to moved events online for now
have started to attract a new audience
of bigger clients.
Longer term, when Covid-19
is under control, exhibitions will
be at the forefront, leading the
revitalisation of trade across every
sector. Exhibition centres in China
plan to start exhibitions again in the
next couple of months (although the
central government have very recently
announced that they aren’t yet giving
permission for this to happen) and in
the UK there is an expectation of large-
scale government investment in event
participation to help boost trade.
Through our Event Entrepreneurs
Club we have been hosting phone
conferences with six independent
organisers at a time, creating a forum
for them to listen to each other’s
experiences and to swap ideas on how
to deal fairly with exhibitors, and
how the different venues are treating
them for their show postponements or
cancellations.
The over-riding sentiment was that
the value of a show brand is intrinsically
linked to being mindful of exhibitors’
issues and to act fairly. Any attempt to
“Some organisers and Private Equity firms see an
immediate opportunity for possible bargains as
independent organisers feel the financial pain”
08 — May
“Unless it’s a re-
sale, it’s currently
near-impossible to
value an exhibition
business when it’s
not clear when
the show will take
place, and what
the impact of the
economic downturn
will be”
run a show before it’s clear that it’s safe,
and in the interests of the sector to do
so, will be seen as a cynical financial
decision and will backfire. Different
sectors are likely to recover at different
rates, and events will serve a variety of
purposes – in some sectors there will
be a desperate need for lead generation,
in others it will be a need to gather and
learn.
Organisers are also challenged with
a very congested 4th quarter calendar
with many competitive shows that
normally keep their six months distance
from each other competing for exhibitor
spend. This spend will itself be severely
affected by the lockdown. Some
organisers are looking to work together
to co-locate shows and share tenancies.
The shows with a solid foundation,
and which have a compelling reason for
people to attend, are the ones that will
survive. Social distancing may be an
ongoing issue which could challenge the
existing thinking that ‘scale’ is always
the priority and strengthen more niche
events and other models such as 121’s.
Having said that, this shouldn’t be a
competition. No-one should be alone
in this and everyone has a part to play
in being fair to each other in order for
the industry as a whole to come through
this as unscathed as possible.