Acquisition of Allworld Exhibitions

LONDON, December 13, 2016 /PRNewswire/ --

UBM plc ("UBM", or the "Company") announces today that it has agreed to acquire Allworld Exhibitions ("Allworld", or the "Business") for a cash consideration which values the Business at US$485 million on a debt and cash free basis (the "Acquisition").

Allworld is the leading privately-owned Asian exhibitions business operating 51 tradeshows in 11 countries and across nine industry sectors. Allworld generated revenues of $97.2 million and EBITDA of $37.6 million (38.7% margin) during the twelve months ended 30 June 2016.

Highlights  

Allworld is a high-quality, high-growth events business 

• Pure-play portfolio of large, high-margin events: 90% of revenues generated from 28 Major¹ events
• Consistent record of high organic² growth: 7.3% revenue CAGR over last 10 years

Strong strategic rationale, in line with Events First strategy 

• Strengthens UBM's market-leading position in Asia, creating the leading events business in the ASEAN region, and provides UBM with entry into the Middle East
• Strong sectoral complementarity with UBM's existing portfolio - particularly in Food & Hospitality, Packaging and Manufacturing - with entry into Oil & Gas
• Significant opportunity to accelerate growth through operational initiatives and application of Events First best practices
• In combination with UBM, revenue growth is expected to accelerate over the next 24 months

Strong growth and margin expansion underpin attractive financial returns 

• Immediately enhancing to earnings in 2017
• Return on investment to exceed cost of capital from 2019
• Fully debt funded with new bridge facility
• UBM expects to maintain investment grade rating and return to target leverage corridor of 1.5-2.0x within 12 to 18 months (in line with financial policy) whilst maintaining flexibility to continue with regular bolt-on acquisitions  

Commenting on the acquisition, Tim Cobbold, CEO of UBM, said:

"The acquisition of Allworld is wholly in line with our Events First strategy and represents an exceptional opportunity to accelerate growth by investing in a high-quality events business.  

"In so doing we cement our position as the leading events business in Asia and achieve the number one position in the fast-growing ASEAN region. We see excellent opportunities to accelerate organic growth in the business.

"Allworld's management and employees bring tremendous experience and expertise to UBM and I look forward to working with them to realise the growth potential of the combined business."

Investor and analyst call 

A conference call will be held at 8.30am GMT on 13 December 2016. To listen to the audio and watch the slides please log onto the web conference link ( https://webconnect.webex.com/webconnect/onstage/g.php?MTID=e5a2a6e6f45e79ba0b0b3c96f8b330837). Alternatively please dial-in to the conference call on +44 (0) 1452 555 566 (Passcode: UBM) or UK freephone 0800 694 0257. Slides are available on the UBM plc website. http://investors.ubm.com/presentations#

Background on Allworld 

Allworld is a pure-play events business serving nine different industry sectors. It operates 51 tradeshows (a mixture of annual and biennial shows) in 11 countries: Singapore, China & Hong Kong, Indonesia, Malaysia, Thailand, Vietnam, Myanmar, South Korea, Bahrain and Kuwait, and is the leading privately-held Asian exhibitions organiser (with a position in the Middle East). Allworld has industry-leading events in attractive sectors including Food & Hospitality, Packaging, Manufacturing, TMT and Oil & Gas. It has international sales teams based in London and Singapore and has approximately 250 employees.

Events First implementation and integration planning 

Allworld is a well-run, family-owned business with a strong track record of organic growth. Its geographical and sectoral strengths are aligned well with UBM's existing business in Asia. It is this high degree of alignment that generates the strong revenue growth opportunities.

A thorough, event-by-event and country-by-country due diligence exercise has identified event-specific growth opportunities arising from a combination of the two portfolios and by applying Events First best practices. These opportunities include making use of additional venue capacity at certain space-constrained shows, implementing value-based pricing, launching new geo-adapts and spin-off events and deploying UBM's systems and processes.

Allworld, which operates differently from UBM from a systems and process perspective, will require investment to support the accelerated revenue growth and so net zero cost synergies have been assumed. The integration process and realisation of anticipated revenue synergies is expected to last approximately two years, with total integration costs of approximately $20m.

Financial information 

Allworld generated revenues of $97.2 million and EBITDA of $37.6 million (38.7% margin) during the twelve months ended 30 June 2016, of which $50.9 million was from annual events. Over the last 10 years the total revenues of the Business have grown at a 7.3% CAGR.

Annual events revenue for the period July to December 2015 was $29.4 million and for the period January to June 2016 was $21.5 million. Annual events revenue has grown at a 6.6% CAGR over the last two financial years and growth is expected to accelerate to double digit in each of calendar years 2017 and 2018. Annual events revenue growth rates are then expected to return to historic levels (7-8%) after 2018.

Biennial events represent approximately 40% of Allworld's revenues on a calendar year basis, with modestly higher revenues in even years. Biennial revenues in the year to December 2015 were approximately $39.5 million and are expected to be relatively flat in the year to December 2017, reflecting good growth in the underlying odd-year portfolio, offset by headwinds in the Oil & Gas events. Strong growth is expected in 2018, at least in line with annual events, reflecting the revenue synergies and some recovery in the Oil & Gas events.

Allworld has delivered consistently high profit margins and cash conversion. EBITDA margins in the year to December 2017 are expected to be approximately 35%, reflecting the biennial mix. Significant margin expansion is expected thereafter, primarily driven by revenue growth.

As at 30 June 2016, Allworld had gross assets of $62.9 million and generated an operating profit of $37.1 million for the twelve months ended 30 June 2016.

Details of the transaction 

The transaction will be structured as a purchase of several legal entities and definitive documentation has been executed with the vendor, International Exhibition Services Limited. It is expected to complete without any closing conditions on 16 December in all geographies except Bahrain. Completion of the acquisition of the Bahrain entity containing Allworld's Middle Eastern events is conditional upon completion of local reorganisation steps and approvals and is expected to occur within the next month.

The consideration and UBM's transaction expenses will be financed from existing revolving credit facilities and a new $365 million bridge facility, which is expected to be refinanced with longer-term debt following completion.

Key members of Allworld's management team will continue to manage the business within UBM and will report directly to the UBM senior leadership in Asia. Allworld's outgoing Chairman will assist UBM with the integration process.

J.P. Morgan Cazenove acted as financial adviser to UBM in relation to the Acquisition. BCMS acted as financial adviser to Allworld Exhibitions.

About UBM plc 

UBM plc is a leading global B2B events organiser. Running over 350 events per year, UBM is the largest listed pure-play organiser globally and the largest independent organiser in the US and China. We help businesses do business, bringing the world's buyers and sellers together at events, online and in print. Our 3,500 staff in more than 20 countries are organised into specialist teams which serve commercial and professional communities, helping them to do business, and their markets to work effectively and efficiently. For more information, go to www.ubm.com; for UBM corporate news, follow us on Twitter at @UBM.

For more information, go to www.ubm.com; for UBM corporate news, follow us on Twitter at @UBM_plc and go to http://media.ubm.com/social for more UBM social media options.

1. 'Major' events generate revenue greater than £1m per annum.  
2. Organic revenue growth defined as growth excluding acquisitions. 

About J.P. Morgan 

J.P. Morgan Limited (which conducts its UK investment banking business as J.P. Morgan Cazenove) ("J.P. Morgan Cazenove"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser exclusively for UBM plc and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than UBM plc for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, nor for providing advice in relation to any matter referred to herein.

Contacts:
UBM plc
Kate Postans
Head of Investor Relations and Corporate Communications
[email protected]
+44 207-921-5023

Brunswick
Jon Coles, Andy Rivett-Carnac, Craig Breheny
[email protected]
+44 207-404-5959

SOURCE UBM plc