Asia Comment
China consolidates
Björn Kempe,
CEO ExposAsia
his time I turn the
spotlight on the lower-
ranked consolidations
that are going on in Far
East and South East Asia. First, what
do I mean by the ‘lower ranks’? From
a global perspective, I would define
it as organising companies with less
than US$50m EBITA.
Informa has been rebranded as
Informa Markets, but still there is
a considerable silence in the Asian
market about the new company.
It can only be speculated that
transition and integration is still
taking its time, and that they are
looking to consolidate businesses
especially in locations where there
are two shows of a similar kind e.g.
two Beauty shows in Thailand and
Indonesia.
At the same time, FHA in Singapore
has been split in two in the same
month - I’m not sure visitors will like
to visit twice in the same month, so
we will watch this development with
interest.
Food Hotel Indonesia has shifted
some dates and there is a big silence
around many of the Informa Markets’
Chinese shows.
We will see some M&A from
Informa Markets in South East Asia
this year, but only towards the end
of 2019.
Malaysia is currently a hot spot,
with many of the families looking
for new partners to move ahead and
MyCEB getting ready to welcome
new shows to MITEC. PowerGen by
Clarion will be one new launch this
year.
China itself has produced several
headlines in the last few months,
with heavyweight acquisitions by GL
Events of CIEC Center in Beijing and
w w w.exhibitionworld.co.uk
the Fashion Expo in Shenzhen. Very likely, it could
soon announce another big acquisition in South
China.
It’s a big surprise that a publicly-listed organiser
has been spending so quickly (US$200m) in
Mainland China - particularly with partially state-
owned company assets which are still unproven in
terms of manageability.
GL Events took a right step with aggressive M&A
in China, but at what cost? Multiples were high and
it will be a challenge for a company with, so far, a
relatively low profile in China to get along well with
state owned assets.
Some German Messes had bad experiences in the
early 2000’s, so I hope for GL Events that history will
not repeat itself.
However, GL Events’ experience shows us that
something is going on in China.
Based on my own experience, and that of the
many business owners I have talked to in China
in the last few months, I believe we will be seeing
a mini-tsunami sweeping through the country in
terms of lower-rank consolidation.
Many North Chinese companies are in the market
to find new investors. Many East Chinese and also
second tier city organisers are, likewise, looking for
international partners.
Part of the consolidation of the
Chinese family owned businesses is
that many of them have been pitching
too high in recent years - even looking
at going for IPOs. All of them failed
– there is still no Chinese exhibition
organiser currently listed in Mainland
China. Since economy priorities are
shifting to the Belt Road Initiative,
China’s central government is likely
to continue to drive investments
(including foreign) towards this goal.
GL Events has proven that the
market will now pay high multiples
for big assets, so many Chinese family
owners will be trying to hop on the
train and find the right partner for
themselves.
I am hopeful of closing three deals
in China this year and I know of
bigger groups such as Messe Munich,
Messe Hannover, Tarsus, Blackstone
Group, Comexposium, etc that are all
in the process of closing other assets
in China. These would be across all
sectors, mostly in the south and east
of the country and involve EBITA
above US$2m.
After a fair period of silence,
EBITA floating in the Chinese market
of more than US$100m should
exchange hands this year. This mini
consolidation in the market will
definitely have impacts on the global
market as well.
By summer I expect the first
Chinese Private Equity fund to
invest billions into the local and
international exhibition industry. By
2025, I predict one
Chinese-listed or
PE-owned exhibition
company to be
among the global top
five players.
Issue 3 2019
31