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 largescale 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 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.