Steve Monnington of Mayfield Merger Strategies reports the most recent transactions and analyses the M&A news.
Since my last column, as well as several deals announced, there have been two important pieces of news which could impact big ticket M&A.
Ascential gave a trading update along with the results of their strategic review. Now that their events business, primarily Cannes Lions and Money 2020 are back to a full schedule, the strategic plan is to sell off WGSN, their trend forecasting business and then split the rest of the business into a US listed company that will own the Digital Commerce business with the remaining business, Ascential Events, continuing under a UK plc listing. The sale of Retail Week and World Retail Congress to William Reed just prior to the announcement cleared out smaller events that could be a distraction.
The announcement has created a buzz among private equity firms who have viewed Lions and Money 2020 as prime events to own and, although the overall re-organisation will take some time and needs shareholder approval, Ascential should be inundated with PE interest as an alternative to continuing along the plc route.
Providence popped up with an unsolicited offer to acquire Hyve Group. They made an original offer of 101p per share and increased this to 105p which values the business at £306m. Before the offer, Hyve’s share price was stable at around 75p and drifted upwards to 85p before the offer became public and then jumped to 101p. Although 105p looked like a decent premium, the offer prompted concern from the investment community. Citi, the American investment bank, commented that, with a target price of 160p, the offer significantly undervalues the business. Providence has until March to formalise the offer.
The offer raises questions about how Providence would manage the investment in Hyve alongside their investment in CloserStill Media which they have held since 2018. CloserStill has been moving away from their tight portfolio of healthcare and tech events to embrace other sectors. At the same time, Hyve has been re-engineering their business away from their traditional markets (Russia, Kazakhstan, Turkey, Indonesia) and acquiring in the USA and UK. The potential conflicts of interest from owning both companies are clear unless the two businesses were merged, which wouldn’t seem likely to gain much favour from Hyve’s management team
There were also seven transactions announced since the last column which brings the total for 2023 to 13 and we’re not even at the end of February.
Mark Allen Group (MAG) announced their intention to acquire the UK and Asia assets of Bonhill plc, probably their most significant acquisition to date, for a consideration of £6.5m. Bonhill publishes wealth management titles such as Bonhill Create, Portfolio Advisor, Expert Investor, International Advisor, Fund Selector Asia, ESG Clarity and Future Flows. The American part of the business – Investment News – will be sold separately. The company has struggled recently, racking up large losses and their share price has dropped from 130p to as low as 3.5p at the end of 2022. The strategic importance of the transaction for MAG is two-fold. Wealth management and financial services are new sectors for them but can be hugely lucrative. It also gives them infrastructure in Singapore and Hong Kong. Although the Bonhill business has been suffering, MAG has shown themself to be adept at turning around stagnant businesses so this will undoubtedly be £6.5m very well spent.
Who are Stable Events I hear you ask? You probably know them better as their forerunner, National Game Fairs, owner of the Game Fair that attracts more than 120,000 visitors each year. Stable Events is the vehicle set up by James Gower and Richard Hease to run the portfolio of Game Fairs and have now completed their first three acquisitions. The first acquisition is the Northern Shooting Show which is held at the Yorkshire Event Centre; the second is LAPADA, an arts and antiques fair held in Berkeley Square London, originally launched in 2009 by LAPADA, the association of art and antique dealers. LAPADA have had a pavilion of their members at the Game Fair for the last couple of years. The third acquisition is the Blenheim Palace International Horse Trials, replacing the Jockey Club as organiser. The Stable Events team has previous experience of running events at Blenheim Palace having held a previous edition of the Game Fair there. The acquisitions mean that Stable will be running a total of seven events this year.
Nineteen Group has acquired Lone Worker Safety Live, an event that has previously been co-located with Nineteen’s The Health and Safety Event at the NEC. As part of this, Lone Worker Safety Live will host their annual conference at the event.
Moving to the USA now, Emerald has acquired Cocina Sabrosa Food & Beverage Trade Expo, the only trade event in the US solely dedicated to the Latin food and beverage sector. Emerald’s plan is to develop the show from a Southern California regional event into a US national show. Cocina Sabrosa will join Emerald’s growing food portfolio alongside Pizza Expo (acquired in 2015), Artisan Bakery Expo (acquired in 2020 as Atlantic Bakery Expo) and SIAL America (launched in 2021 as a joint venture with Comexposium). It follows last month’s acquisition of Lodestone Events which, with Overland Expo, marked their first move into consumer shows.
GL Events has been a long term shareholder of the Première Vision Association. They originally owned 24.5% and increased this to 49% in 2010 by buying shares held by Eurovet. Now they have acquired the remaining 51% to become the sole shareholder. The association will continue in their role in what is a portfolio of 12 events per year around the world which is expected to generate revenue of €45 million this year – approximately 75% of 2019 pre-Covid levels.
Steve Monnington provided some tips for organisers thinking of a sale in his last column. Read it here. He will be at International Confex on 1- 2 March and available to discuss potential sales with organisers at the EN stand from 11-1 each day.
