Onex in talks with advisers on future ownership of Emerald -sources (updated)

Emerald Holding

26/09/2023 23:02

(Adds share reaction)
    By Amy-Jo Crowley and Milana Vinn
       LONDON, Sept 26 (Reuters) - Onex  ONEX.TO  has been in
talks with potential advisers about the future ownership of
Emerald  EEX.N , a U.S.-based trade show organiser, as the
business events sector has rebounded from the pandemic, two
people familiar with the matter told Reuters.
   The Toronto-based buyout group has discussed options such as
a full or partial sale of its 90.7% stake in Emerald, the people
said, speaking on condition of anonymity. It may kick off an
auction process at the end of the year or early next year, one
of the people added. 
    The sources cautioned deliberations remain at an early stage
and that a deal is not certain.  
    A spokesperson for Onex confirmed receiving a request for
comment from Reuters but did not respond further. Emerald did
not respond to requests for comment. 
    Emerald shares ended trading in New York on Tuesday up 13%
at $4.31, giving the company a market value of about $271
million. 
    A deal would follow a rebound in valuations in the events
market. UK events organiser Hyve Group agreed in June to a 524
million pound ($650 million) offer from private equity firms
Providence and Searchlight, while Informa  INF.L  in March
announced it bought smaller rival Tarsus for $940 million. 
    Possible bidders could include strategic buyers or private
equity firms that could use Emerald as a platform to pursue a
"buy and build" strategy to consolidate the fragmented sector,
two of the sources said.  
   California-based Emerald produces more than 140 trade shows a
year spanning industries including retail, food, luxury, sport
and technology.
    Onex acquired it from Nielsen Holdings for $950 million in
2013 - when it was called Nielsen Expositions - before listing
it on the New York Stock Exchange in 2017. 
    It held onto the business through the COVID-19 pandemic when
the events industry came to a sudden halt, heavily impacting the
company’s revenue and earnings. 
    Emerald is now targeting more than $100 million of adjusted 
EBITDA and $400 million in revenue for the full year 2023,
according to its second quarter results. 
     Revenue was $208.8 million for the first half year of 2023,
up 22% from 169.9 million a year, partly driven by an increase
in subscription services, newly launched events and
acquisitions. 
   ($1 = 0.8068 pounds)

 (Reporting by Amy-Jo Crowley and Milana Vinn; editing by
Anousha Sakoui, Emelia Sithole-Matarise and David Gregorio)
 ((Amy-Jo.Crowley@thomsonreuters.com;))