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M&A| Exhibition World12| October 2010| THE MAGAZINE FOR THE GLOBAL EXHIBITION COMMUNITY WWW.EXHIBITION-WORLD.NETThe question we are asked most often by potentialsellers of exhibitions is: what are the valuations forexhibitions at the moment? The question we areasked most often by potential purchasers is: where arethe large deals? The first question is impossible to answer. Not onlydoes the value of an exhibition depend on the exhibitionitself (size, growth trends, competition) but increasingly itdepends on who the buyer is. Virtually every transactionover the last 12 months has been small and strategic andthe different strategic worth to different purchasers isreflected in the offer price. However, what is clear is thatthe days of double-digit multiples have been over forsome time and most deals are in the 5x to 7x range,occasionally 8x for an exceptional business.The answer to the second question is very simple : therearen't any. At least there weren't until September. In thecurrent economic environment, most larger organisers arenot interested in selling and therefore growth by acquisitionis being achieved by a series of smaller transactions. This is particularly true in emerging markets andcountries such as Brazil. Mexico and Turkey have a largenumber of independent entrepreneurial organisers, buteach business is small. The "platform deal" which enablesan international organiser to gain immediate critical massin a new market just isn't there. This creates a logisticalproblem in how to create a sensible corporate structurefrom a series of individual businesses, which are often jointventures. On the plus side, this gives the acquirer a muchbroader skill base across a number of different strategicsectors and may produce moreopportunities for new launches. Bucking this trend in the firstmajor deal of the year, UBMacquired Canon Communi-cations for US$287m fromApprise Media. Canon wasone of the many US private equity-backedbusinesses but, unlike those who unravelled in theeconomic crisis through over-expansion and over-borrowing, it stuck to its core market of tradeshows formedical device design and manufacturing.The other interesting point about this transaction is thatthe price paid represents a multiple of 7.8x historic pre-taxprofit and, given the size of the deal and the strategic fit forUBM, it underlines my first point about market multiples.The rest of the activity continues the recent trend ofsmaller, strategic acquisitions. Emap made its firstacquisition in quite a while with the purchase of UKshow, The Energy Event from Western Business Media.Back in January this year, the press reported Emap'sowners, Guardian Media Group and Apax, were gearingup for an acquisition drive so could this be the start ofthat process?There were also two transactions involving onlinebusinesses. UBM acquired Astound, a privately-ownedAmerican virtual career fairs business to add to its virtualrecruiting fairs in the UK and Asia and German-basedVogel Business Media, who has a portfolio of print, onlineand events in specialist B2B sectors, has acquired a25.1 per cent stake in new generation network.Steve MonningtonInternational dealmakersSteve Monnington, MD of Mayfield Media Strategies, looks at the status of large exhibition deals on the table.