What is the current state of mergers and acquisitions (M&A) in the events industry? To find out, TSNN’s Danica Tormohlen interviewed John McGovern, CEO and owner for Grimes McGovern & Associates, an advisory firm that specializes in media mergers. McGovern was a speaker on this topic at a session at the recent UFI Global Congress in Cologne, Germany, and we sat down with McGovern after his session to do a deeper dive into private equity investment in the events and trade show industry.

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In a revealing discussion, we delve into the secrets behind the resurging interest in event-based businesses post-COVID. The discussion covers the increasing number of private equity firms getting into the event business and the characteristics that make these businesses attractive investments.

We also talk about the healthy market for sellers, the varying perspectives on the availability of quality events for sale, the importance of having clean financial statements for sellers and understanding your market and customers for buyers. Additionally, the discussion includes forecasts for future deals and trends in cross-border activities between the U.S. and U.K. from a white paper, Cross-Border Private Equity M&A Activity in the Events Industry, produced by Grimes McGovern & Associates.

Here are five takeaways and five standout quotes from our conversation. Watch or listen to our full interview here.

5 Key Takeaways

1. Positive Market Recovery: The trade show industry is witnessing remarkable growth despite pandemic setbacks, with businesses not only bouncing back to pre-pandemic levels but also continuing to grow.

2. Private Equity Interest Surges: An astounding 40 private equity firms have shown interest in face-to-face event businesses globally, with half entering the market post-COVID. This highlights a renewed confidence in the sector.

3. Sellers' Market Dynamics: Observations suggest a seller’s market, with high interest from investors, though consistent valuation increases aren't yet a certainty.

4. Varying Market Perspectives: Industry experts like Terrapin CEO Greg Hitchens and Clarion Events Chairman Russell Wilcox offer differing views on the availability of quality assets within the U.S. market, reflecting diverse strategies and interests.

5. Cross-Border Activity: There is significant U.S.-UK cross-border activity, which constitutes a noteworthy percentage of transactions, emphasizing international interest and opportunities.

5 standout quotes

1. Market Insights and Trends: “It's really astonishing ... most of the businesses that we look at are growing still after COVID. They bounced back to their 2019 levels mostly in 2022 and have continued to grow mostly,” McGovern said. This underscores the resilience and adaptability of the event industry in navigating challenges and fostering growth.

2. The Rise of Private Equity. Private equity investments have surged, with McGovern noting, “We've seen a high amount of private equity interest in this industry.” This interest reflects the strong cash flow potential and scalability of trade show businesses, making them attractive to investors.

3. Seller’s Market and Valuation Insights. Discussing the market dynamics, McGovern acknowledges, “It does feel that way. You can get a lot of interest.” Yet, he warns against assuming this will lead to increased valuations, as the market remains complex and situation dependent.

4. Cross-Border Investment Trends. McGovern highlights, “What's most interesting is the U.S.-UK cross border activity,” which accounts for a substantial portion of transactions. This trend showcases the interconnected nature of global markets and the appeal of U.S. events to international investors.

5. Advice for Stakeholders. For sellers, McGovern advises, “The most important thing is a clean financial state,” emphasizing the need for transparency and organization. Buyers, on the other hand, should focus on understanding their markets and customer needs to uncover new opportunities.