UBM to buy All­world in Asia push, Mideast foray

Kuwait Times - - BUSINESS -

Event or­ga­nizer UBM Plc said it would buy Asian ex­hi­bi­tions com­pany All­world for $485 mil­lion in cash, strength­en­ing its po­si­tion in Asia and pro­vid­ing an en­try into the Mid­dle East. The deal, which will be funded with a new $365 mil­lion bridge fa­cil­ity and by part of the pro­ceeds from UBM’s sale of PR Newswire, is ex­pected to add to 2017 earn­ings.

The cash con­sid­er­a­tion, which val­ues All­world on a debt and cash free ba­sis, looked like a “very high price,” In­vestec an­a­lysts wrote in a client note. All­world, which op­er­ates tradeshows in 11 coun­tries, posted rev­enue of $97.2 mil­lion in the 12 months ended June 30. The com­pany com­ple­ments UBM’s ex­ist­ing port­fo­lio in food and hos­pi­tal­ity, and pack­ag­ing and man­u­fac­tur­ing, while al­low­ing UBM to en­ter the oil and gas mar­ket.

“Oil and gas is prob­a­bly nearer the bot­tom of the cy­cle than the top, so it’s a good time to be en­ter­ing oil and gas,” UBM Chief Ex­ec­u­tive Tim Cob­bold told Reuters. Oil closed at $55.7 a bar­rel on Mon­day, down from highs of about $100 a bar­rel in June 2014.

N+1 Singer an­a­lyst Johnathan Bar­rett said ma­jor ex­hi­bi­tion op­er­a­tors had switched their ac­qui­si­tion fo­cus from emerg­ing mar­kets to the United States. “UBM is do­ing the op­po­site and lift­ing its ex­po­sure to Asia and gain­ing a Mid­dle East pres­ence as well. Near term this looks likely to be ques­tioned but may well pay off in the long term if the Mid­dle East and Asia re­gain con­fi­dence,” Bar­rett added.

Peer In­forma Plc in Septem­ber agreed to buy US-based in­for­ma­tion ser­vices com­pany Pen­ton for 1.18 bil­lion pounds ($1.50 bil­lion). UBM spent $972 mil­lion to buy US trade show or­ga­nizer Ad­vanstar in 2014, which an­a­lysts said was di­lu­tive to the com­pany’s Asia ex­po­sure. “I don’t think we’re mov­ing in the po­lar op­po­site di­rec­tion at all,” Cob­bold said, ad­ding that post the deal emerg­ing mar­kets in­clud­ing China would ac­count for about 40 per­cent of group sales, up from 36 per­cent. UBM un­veiled its “events first” strat­egy in Novem­ber 2014, with a fo­cus on spend­ing re­sources on its largest and most prof­itable shows and ac­qui­si­tions. UBM would con­tinue to make bolt-on ac­qui­si­tions and keep look­ing at “big­ger” ones, Cob­bold added. JP Morgan Cazen­ove pro­vided fi­nan­cial ad­vice to UBM, while BCMS ad­vised All­world. —Reuters

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