Partnerships| Exhibition World 30| April 2011| What makes a good international partnership?They can be fruitful, ensuring the whole is worthmore than the sum of the parts. They can alsobe a nightmare; easy to get into and awful to get out of. Verydifferent to get out of them.UBM Live, a division of London-listed company UnitedBusiness Media, counts for a third of UBM group profits,achieved through live event platforms including exhibitions,conferences and awards. The company has manysuccessful businesses around the world, and generallyspeaking they've been built on the acquisition andpartnership principle.UBM Live group director Simon Parker is responsible forpushing UBM's protection and management events aroundthe globe. He recently worked on a partnership withMontgomery to launch the commercial security show IFSECin Lagos, Nigeria, a move that followed a time-consumingand costly IFSEC launch without a local partner in India.Parker says the contrast between the Indian and Nigerianlaunches showed him that when crossing into new territory,bring a partner."Clearly, the UK and US are very mature markets" saysParker. "What we've deliberately done is reposition andrebalance the portfolio in the emerging markets. Amongother places we now have an incredibly successfulbusiness in China, and the same situation in Brazil, wherewe're seeing 25-30 per cent top-line growth. And in a fouryear period we are now in profit in India."THE MAGAZINE FOR THE GLOBAL EXHIBITION COMMUNITY WWW.EXHIBITION-WORLD.NETHand in hand UBM's method for geo-cloning,a term used for the adaptation ofan exhibition or event into newterritories, is to look at "attractivegeography" and then establishan entry strategy. Its preferredmodus operandi is to identifythe key player in each regionand work closely with them toassess whether there is an opportunity there, and whetheror not to proceed via a straightforward joint-venture, or morelikely by buying a percentage of the business. "There are not many brands that have a truly globalresonance," says Parker. "Some of our events that do arethe pharmaceutical ingredients show CPhi, FoodIngredients and Health Ingredients and our security showIFSEC."The latter of these brands is the one UBM launched inNigeria in February, as part of a sub-Saharan joint venturewith Montgomery. Montgomery had run its Securex brand inSouth Africa for around 15 years before UBM came in for the50 per cent joint venture UBM Mongomery in 2007,eventually rebranding the event IFSEC South Africa lastSeptember. The Nigeria launch, IFSEC West Africa, followedthis year with the emergence of a world class venue inNigeria's financial and economic capital Lagos.The operation perfectly demonstrated the value ofworking with a local partner, according to Parker. "It'sSimon Parker discusses the partnership models UBM is using to move its brandsinternationally, and sows a few seeds on the way we can work better with one anotherto take up opportunities across the globe.Simon Parker
31Exhibition World | Partnershipsimportant not to have a one-size-fits-all attitude whenbuilding a relationship with a local partner. You tend toenter a partnership thinking you'll achieve one thing, butmore often than not you come out with lots of otheropportunities. The partnerships we have in Brazil, and inAfrica with Montgomery, have led to different things."The history of exhibitions is littered with examples ofpeople going into territories and failing badly," he claims."Organisers need to give themselves the bestopportunity for success in any country."Striking up accordSo what makes for a good partnership? Parker says itbegins with identifying an individual rather than abusiness, ensuring that their goals align with your ownand that both parties will bring an equal amount to thetable."Most people we partner with are people we know,people we've worked with, people with who we have builtup a sense of trust," says Parker. "Montgomery in Africais a classic example of this; we've known them for a longtime and we feel we've got a common vision. "The individual, the chemistry going forward, and the fitwith UBM is absolutely vital in defining whether thatpartnership will be a good one or a bad one in thefuture." Ultimately, most international partnerships areformed not only for market entry but for the long term.While some multinationals buy a brand, stamp their nameon it and cut the vendor out of future proceeds, themajority are looking for a long-term sales agent as well asa platform for their brand."We need to be transparent. We act as one business.In Nigeria it really felt like one team and I think it's reallyimportant to engender that attitude," says Parker.It's important to define clear areas of responsibility fromthe outset, and very often this is where partnerships falldown. As Parker points out, "One party often thinks theyTHE MAGAZINE FOR THE GLOBAL EXHIBITION COMMUNITY WWW.EXHIBITION-WORLD.NET| April 2011|are doing more than the other, so it's important to have asolid contract in place from the beginning."Assigning responsibilityEstablishing a solid contract from the beginning is vital.And while you shouldn't be thinking about an exit or atermination right at the beginning of the partnership, youneed to have a mechanism by which you can get out.In terms of percentage of acquisition, UBM typicallylooks at a 51 per cent minimum of the business. Andalthough that figure can climb, Parker claims there'sanother factor to consider when establishing thepartner's share in the venture: motivation. "We like toleave the owner with enough of the company to bemotivated to work with us and grow the business."IFSEC in Nigeria is one of parker's best examples ofthe acquisition and partnership model working well. "Wewere sensitive during the transition. It's important to dothat and not just put your mark all over it," says Parker."We've launched IFSEC in Lagos and there are fourother launch potentials for next year on the back of thatexperience."In India, UBM built the show from scratch to a size ofaround 22,000sqm. "It was literally a case of one guygoing over there, starting a business, hiring peoplelocally and building up the infrastructure. It worked in theend, but was it the best route? It was certainly painful butwe got there in the end."In territories where there are significant restrictions inforeign ownership, local partnerships can be the onlyway to go. But many benefits aren't immediatelyapparent to an organiser looking to break new marketswith its brands. Local knowledge can be expensive toobtain without a local partner, and partnerships helpgreatly with government bodies and trade associations,venues and contractors. They also bring culturalknowledge and understanding, not to mentionawareness of factors such as religious festivals."We've decided that the go-it-alone approach is a verydangerous and costly way forward," says Parker. "Ourpreferred route, pretty much all the time, is to work with apartner."If we were in a territory where we couldn't find a localpartner, we'd have to think very hard about whether ornot we'd like to try and go it alone again."Ultimately you form partnerships to make more moneytogether than you could make on your own. It's a simplephilosophy, but one that seems to be working for globe-trotting UBM Live.It's important to check the fine print whenforming partnerships. Here is Parker's listof things to keep an eye out for..Quality of financial data.Dependent on territory, multiple books mean they don't havea great library but they do have a number of different meansof accounting.Official and non-official.Non-compliance of tax. We can't buy a business with taxliabilities..Employment contracts of individuals - that they follow theletter of the law.Partner must be compatible with your vision.There is a dominant partner.Remember, they might not have your level of M&A experience.Price your event in accordance with local rates, not the ratesof the home event.Be aware of local customs, watch out for bribes"The individual's fit with UBM isabsolutely vital in defining whetherthat partnership will be a good onein the future."