CloserStill and Nineteen Group chairman Phil Soar continues his evaluation of the last 100 years by focusing on a quarter of a century of deals and acquisitions.
Following on from my last piece about what the exhibition business looked like 100 years ago, we have come to the period of most dramatic change – the twenty years following the demise of Blenheim and EMAP.
This was the period when trade show assets started changing hands with an ever-increasing frequency. The three great behemoths of EMAP, Reed Exhibitions and Blenheim, no longer dominated the industry.
Indeed, EMAP and Blenheim were dismembered and thrown to the winds. The driving force was financial engineering rather than the inventiveness and market analyses of the trade show companies themselves. And a small number of lucky people found themselves in the right place at the right time – largely by good fortune – and as a result became far wealthier than they could possibly have expected in 1990.
Up to 1995, the exhibition industry had rarely been a place to get rich.
It is difficult to find ways of assessing and analysing such a thoroughly disorganised industry in this period, but from the 2000s we start to have annual get-togethers and awards.
EVA (the Exhibition Venues Association) started to try to track the business in 1985, and the AEO tried to bring together a Marketing Group in 1990. But it was not until 2001 that there was a real sense of the industry’s size, and which companies were most prominent, with the first reported AEO Awards.
It is interesting to divide these last 23 years (post 2001) into two segments – one pre-crash (2001-2010) and one post-crash (2011-2023). Given that 2020 and 2021 were lost to the pandemic, both periods are 10 years long.
I have looked only at the AEO Awards for comparisons, as the EN awards did not begin until around a decade later.
What the AEO Awards tells us about the last 25 years
In the period 2001-2010, the number of major Awards suggests that EMAP and Reed were still on top of the pile – with Spring Fair and World Travel Market being by far the most common recipients.
However, Melville and Stanco won almost as many trophies (neither name now relevant). Clarion, NEC, Montgomery and ExCeL were well represented, but EMAP and Reed were the dominant names.
But in the period after 2012 we see a very different pattern…
There is the sudden arrival of a number of brand-new companies which have since come to dominate Awards evenings.
The leading three in this period have been Media10, CloserStill and Informa – each well north of twenty major trophies. Informa was virtually unknown in the winners’ enclosure before 2011 – and a large part of its later success has come from its UAE/Saudi events.
But coming next are another three businesses which did not register at all before 2012 – Easyfairs, Racoon and Nineteen, and then we see Clarion, ExCeL and GES. Earlier in 2024 Nineteen won three awards at the AEO People Awards and four at the EN Marketing Awards, in both cases the largest number won (full disclosure, I am chairman of Nineteen).
It is striking that, what we might call the big players, rank well behind all these upstarts – RX, DMG, ITE/Hyve, EMAP’s successors, Haymarket and UBM before its absorption into Informa.
In terms of actual events during the past decade, the most common winners are Ideal Home and the London Vet Show.
It is worth noting that in 2009, the AEO itself was dominated by Reed, DMG, EMAP, UBM and, to a lesser extent, Haymarket and Clarion. These six companies provided a very large part of the AEO’s total income, but this was to be upset with the financial crisis of 2008-09 when four of them largely abandoned ABC auditing because of the cost.
I think this tells us rather a lot. Clearly the newer, obviously smaller, companies take Awards more seriously – they are regarded as great value to their reputations and to their staff. Being smaller, the whole company can enthuse about a single winner.
It seems to be, that the larger the company, the harder it is to generate enthusiasm for entering. The senior management levels can become too detached from the soldiers in the trenches to encourage this sort of engagement. Maybe. But it may also be the case that there is simply more energy and enthusiasm in a small, growing business.
The EN 30 Under 30 shows similar trends
This striking change in approach was illustrated by the Exhibition News 30 UNDER 30 Awards in February 2024.
These are a very good way for companies to recognise young, upcoming talent and are an excellent aspirational vehicle. Of the 30 available Awards, no fewer than 13 (hence almost half) went to just three companies – Nineteen, Easyfairs and CloserStill. Informa took three, Hyve two and Roar two.
Given that Informa and Clarion were both represented, we cannot assume that the bigger companies are just ignoring Awards nowadays – but I fear I have not fully understood what is happening here.
And, of course, many of the newcomers were finding newly available venture capital and private equity money to finance their growth and their ambitions – CloserStill, Clarion, Nineteen, Tarsus, Roar are good examples of this trend.
The rapid rise in the value of trade shows
In tracking how the industry has changed in 100 years, we suddenly hit upon the dramatic rise in the valuation of our assets in the last quarter-century.
Though there had been some reported deals in the 1980s (such as Spring Fair) the first stunner was the acquisition of Blenheim by UBM in 1995 for £593m. This was unusual in that both were quoted on the stock exchange and in that several large Blenheim shareholders had become very willing sellers.
Slowly, we see the number of deals increase (such as Warburg Pincus and K3 just before the dotcom crash) and, by 2000, they were finally being noticed by the financial press.
But there was very little comment on acquisitions of exhibition companies in the 1990s – Trade Show Weekly in the US was the major magazine but that only covered the USA. So it is not until 2000 or so that it is possible to usefully plot what was happening – though it is also impossible to claim that every deal is covered with guaranteed accuracy.
This scatter graph plots the deals reported:
The accompanying scatter graph is simply a plot of the deals about which there is some information starting from 2000.
Every dot represents the purchase of a trade show business with some available information (there would have been others where we do not have sufficient to plot a dot). The largest deal – Informa buying UBM – is plotted as £2.5bn, whereas the actual price was £4.3 bn. This is to avoid the scale becoming unmanageable.
The crucial piece of information is the solid Trend Line. This takes all the relevant information and “averages” the value of the known sales across the 24-year period.
On the left-hand side, it starts with deals such as Spearhead being formed (£15m) in 2000 and concludes with the two major deals of 2023 – Informa buying Tarsus and Providence/Searchlight buying Hyve.
At the start of the century, the “average” deal was quite small – say £10m/£20m. Some 25 years later, the “average” has increased to north of £300m.
This doesn’t mean of course, that all deals will be £300m, but what it does mean is that the size of the large deals is swamping smaller deals and showing that we live in a very different landscape.
The thick Trend Line tells the whole story. The deals have been getting bigger. Trade Show companies have become worth more as they themselves have grown bigger. As I have said here once or twice, investing in trade shows in the last 30 years seems to have been something of a one-way bet.
What is behind this significant trend?
There are at least three conclusions to be drawn from this graph.
The first is that deals became larger and larger at quite a rapid rate. If we take Clarion as an example: in 2008 Clarion was sold in a deal valued at £120m. By 2012, that had risen to circa £300m and by 2018 it was sold in a deal valued at £600m.
CloserStill was similar – going from Zero in 2009, to £25m in 2012, £125m in 2015 and £340m in 2018. The patterns of other growing groups such as Tarsus and Hyve show similar trajectories.
The second is related to the first – that smaller companies were being absorbed by larger ones at a faster rate than in the past.
And thirdly, that trade show companies were worth more – in the sense that anything is worth what someone will pay for it.
We can sense this by looking at individual events. When EMAP bought Spring Fair in 1988 there was no public announcement of the price – but it was probably in the £20-25m range. By the time EMAP was broken up in 2008 Spring Fair and Autumn Fair would have been valued at some £150m, if not more, and a higher valuation might have been put on them when Ascential sold in 2019. But the shows were still essentially the same events.
Blenheim bought Batimat, the largest show in France, for five times earnings in 1990,
These shows did not dramatically increase in size or importance over that period. Relatively few individual assets change hands more than once, so values for single trade shows are hard to prove. But what is clear is that a good trade show was deemed to be worth far more in 2015 than it had been in 2000. Buyers had (finally) developed a sense of what good, solid, reliable profit earners trade shows are – and the pandemic has palpably reinforced that.
So what does the last 100 years tell us?
The last century of exhibitions can thus be broken into three phases. Post Great War years were important – the opening of Castle Bromwich in 1920 and the foundation of the AEO in 1921 – but in the next 50 years not a great deal changed.
My mother’s parents would have known nothing of our industry unless they happened to visit Ideal Home (which they didn’t).
The step change came in 1976 with the opening of the NEC. In 1978, the Motor Show attracted 979,000 visitors, the highest-ever attendance at a UK exhibition (if we exclude the 1851 Great Exhibition). This was followed by EMAP’s acquisition of Spring Fair in 1988 and the reign of the three behemoths in the 1990s.
For a time this seemed to be the future, with all three (Reed, EMAP, Blenheim) being publicly quoted and growing quickly (Blenheim went from a profit of £3m in 1988 to £50m in 1993).
It is worth adding that RELX, the parent company of RX, has the proud distinction of having been the single best performing share in the last 50 years of the FTSE 100.
But then around 1999 came the era of easier money, greater debt and private equity which gave us the world we know today.
Very little of this was predictable – and nor will be the next century.
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