After a stormy winter and currently a hot spring in MICE industry what weather conditions can we expect for summer?
Informa/UBM was certainly a surprise to some and Penwell/Blackstone came at the right time just after Global Sources so the famous private equity group trying to play in the premier league. These 2 deals however are just a precinct of what is going to come – in my opinion – for summer and autumn.
Since I am known to be impatient and don’t want to wait until the annual results are published I was running some numbers recently and look what I found just looking at revenues:
CompanyEst. Revenue 2017 in USD
1.9bn Informa/UBM 1.8bn All major German exhibition organisers (incl. Frankfurt)* 1.6bn All major UK organizers (excluding Informa/UBM/Reed)* 1.5bn Reed Exhibitions 1.3bn Organisers in rest of Europe (MCH, Spain, Poland, Netherlands, Italy etc) 800m All major government related Chinese organisers600m Messe Frankfurt 550m Blackstone (Clarion, Penwell, Globalsources)400m Comexposium
*the exact table for each company will only be published once the annual reports are approved therefore these are results for the entire country. Above only show major players
A few quick conclusions:
- Reed must be feeling the pressure after several major acquisitions by key competitors.
- Informa/UBM globally is now as large as the entire German exhibition industry
- Messe Frankfurt is most likely to loose the top 3 position within months to Blackstone group show organizers
- Organisers based or majority owned in UK still at est. 1.6 billion USD revenue that could drive further consolidation in our industry
- Government organisers in Europe and China still at 3.0+ billion USD revenue. There is great potential for deal makings and growth both inside of China domestically but also for Chinese organisers going beyond their borders.
- USA organisers have almost lost global importance only with Emerald merely in the TOP 10
So what can we expect in summer?
I think for some UK companies the summer could be hotter then expected to consolidate their figures and to fight with each other in the global market for survival. Some may go to the cosmetic salon before dating or wedding plans announced later this year or next year.
Informa/UBM is now a serial (serious) “killer” in certain verticals like medical/health, food, beauty, jewelry, water/energy etc. and I can imagine a lots of smaller M&A will be announced to enforce their vertical strengths in the regions.
Reed itself properly need a wake up kiss from the everlasting beauty sleep because at least to my records the company didn’t have any major M&A in the last 5 years and now find itself under intense pressure internationally and for some of their key verticals. What is going to happen to Reed is a big question and I hope the management will give some clear idea to the industry soon.
Blackstone with its 3 assets wont stand still and is properly aiming to become the No 3 by Christmas this year. So far Blackstone acted quick and out of surprise. This element will certainly continue so its hard to predict what is next on the map. However one observation can be taken that Blackstone has appetite for rather big organisers.
German trade fair organisers suddenly find themselves rather isolated. An eye opener for me is that now Informa/UBM is as heavy as the entire German trade fair organisers and that the Blackstone group of shows are now almost as big as Messe Frankfurt globally - and this just within 1 year. Being pioneers in the early 2000 for most of Asian and American countries their market share is declining globally compared with the UK organisers. Yes we have still great and massive world leading shows in Germany just like Hanover Messe these days BUT the competition overseas is something that yet Germany organizers need to decide if they like to continue their fights alone or if they consider to join forces. For the Germans the question is – shall they form overseas cooperations like IEG in Italy to be more competitive or everyone to fight themselves. Recent cooperations between Stuttgart/Leipzig but also Nuremberg/UBM could lead the way here.
For Italians and rest of Europe I believe they already realized that the Premier league is too big and it only makes sense to JV for certain brands and certain markets to be in very nice verticals. Although the Italians are starting to get out of country the international competition is very tough.
Chinese organisers eager to follow the one-road-belt policy towards ASEAN and Middle East but the problem is how to play in the premier league even the pockets are full of cash. The question will be how smart the Chinese are utilizing the current consolidation wave for themselves? Shortly we will see the first asset acquisition by a Chinese state owned organisers in Asia that was supported by Expos Asia. There are many state owned Chinese exhibition entities and Chinese private equity funds (well funded) that can easily compete on the international stage to bid for some organizers. The time for them has come and many of them have lined up in the starting blocks.
For private equity the appetite is still high. Beside Blackstone many other private equity firms from Europe, USA and Asia especially from China and Singapore have an every growing appetite for the strong dynamics and growth potentials of our industry. The plate is rich with companies in the UK worth 1.6bn that are able to merge, to be sold, to be delisted etc.. I would call it low pressure systems will constantly brush Europe that will have impact on the global weather in exhibition industry as well.
A lots of speculations and I believe we will get some substantial figures for the annual reports of 2017 to see if my quick calculations have been wrong or correct. However its definitely not a secret that with the recent M&A deals we are continuing to see the largest consolidation phase in our industry that we ever witnessed before and its going to be a hot and turbulent year.
Stay tuned of my global MICE investment weather observations in our next blog end of June.
Enjoy the spring time - Sincerely yours
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