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Events Have Bounced Back
Despite the pandemic, the events industry has delivered excellent returns for investors, even to the extent that one experienced investment team wonders if the industry is a “one-way bet.”
Funds such as Blackstone, Providence, Charterhouse, and EagleTree have made multiple, highly successful investments in events over the past two decades. The robustness of the industry and its unique qualities centered on proximity and immersion were known to insiders before the pandemic. With the industry’s unexpectedly rapid bounce-back, its resilience and strengths have been proven to all. Industry growth remains positive with Stax’s Globex forecasting the B2B events industry to exceed its pre-Covid size by 16% in 2025. Consumer events have fared even better, with 2022 surpassing the pre-Covid high of 2019.
Strong Opportunities in Trade Shows
The main focus of investment has been on trade show organizers, with strong cash flow and 30% EBITDA margins being the norm. Private equity has steadily increased its share of the market. Blackstone’s Clarion is #3 in the Stax Top 20 Ranking of Exhibition Organizers by 2022 Revenues, and Emerald has ascended the rankings to #7. Providence’s CloserStill has entered the table. Investment opportunities in attractive major organizers will continue with more scaled assets coming to market on both sides of the Atlantic over the coming 18 months. We can expect EBITDA multiples solidly in the mid-teens. But this is just part of the story.
There are also attractive investment opportunities elsewhere, and at lower multiples. For example, among smaller organizers, in the midmarket in 2023, Falfurrias has invested in Executive Platforms. Deals like this highlight attractive targets across event formats, including conferences and consumer events. Corporate events also have strong fundamentals with growth a notch above trade shows. The agencies that serve this market can be attractive, as evidenced by KKR backing Freeman’s substantial acquisition of Sparks.
Services Can Offer Hidden, Undermanaged Opportunities
All of these events are served by a host of service businesses on which they rely, as gold miners relied on picks and shovels. Consequently, there are also unseen opportunities across the wider events ecosystem which offer investment opportunities. Many of these are in the mid-market.
“During the gold rush it’s a good time to be in the pick and shovel business.”
— Mark Twain
The events ecosystem supports a wide variety of service companies. They range from design and marketing services, contracting, and booth provision through promotional products to audiovisual and tech. Venues and venue management are also big businesses.
With strong underlying fundamentals of events buoying the sector, there are opportunities for investors in many of these less glamorous areas. Our experience is that margins can vary with some surprising highlights. Examples include a staging business whose margins exceed those of many organizers, and a service contractor operating 50% above its larger peers. Some observers see the overall events industry as undermanaged. In part this is also a reflection of the volume of primary buy-out opportunities. In any case, our experience is that the opportunities for value creation abound in the events sector and are particularly prevalent in services.
We do not think the events ecosystem industry is a guaranteed “one-way bet.” But we do know that returns are typically excellent and the sector has a disproportionate level of opportunity compared to many others.
Select attractive characteristics:
- Strong fundamentals of Face-to-Face
- Broad universe of players within the ecosystem
- Numerous primary buyout opportunities
- Frequent scope for professionalization
- Inefficient utilization of data
- Organic and inorganic growth opportunities
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