M|C Deal Boosts M&A Valuations Markedly
Staff -- Tradeshow Week, 10/25/2004
Although tradeshow merger-and-acquisition activity hasn't increased so far this year, deal valuations are experiencing a marked rise.
According to Jordan Edmiston Group Inc., 16 tradeshow deals worth $634 million were reported in the first nine months of this year, compared with 16 deals worth $96 million at this point in 2003.
Bain Capital's option to take a $400-million stake in M|C Communications accounts for a large portion of that $634 million. Consequently, it will likely skew 2004 valuation figures. However, even without the M|C deal, the remaining transactions were worth $234 million, more than double the value for the same period the year before. Bain's purchase of M|C, producer of the popular Pri-Med medical continuing education conferences, closed in August.
Five of the year's 16 event deals took place in the third quarter. Among them were British media company WJB Chiltern Trust's $96.6-million purchase of the Cannes Lions Intl. Advertising Festival, dubbed "the Oscars of advertising." In addition, Proximus B2B acquired Retail Systems Alert Group, Pfingsten Publishing bought Art Chicago and SharedInsights picked up tech show producer Digital Consulting Institute.
The business-to-business space overall recorded 367 transactions worth $19 billion in the first nine months of this year, compared with 237 deals worth $10.8 billion in the year-ago period, according to JEGI. The New York media investment bank this quarter added a new category, marketing and interactive services, to the 10 other media sectors it tracks.
Transactions surpassed 2003 levels in seven of the industry sectors. While tradeshow deals experienced the second-largest valuation increase, exhibitions and conferences tied with directory publishing as the year's least active sector.
No tradeshow deals are among the year's top 10, which ranged from $415 million to $2.5 billion. Bain's purchase of M|C Communications missed being included by $15 million.
Valuations were already starting to increase slightly in the first half of 2004, when JEGI tallied 11 deals worth $116 million, up from 12 deals worth $90 million in the first half of 2003.
And in the next year or two, JEGI anticipates that both deal activity and valuation will increase. "We're certainly seeing a pickup in activity. Our pipeline is very robust right now," said JEGI Vice President Adam Gross. "We foresee both numbers coming up together."
