News of a big acquisition – like the one last week in which Informa acquired Penton for $1.56 billion – makes everybody in the events industry feel a little bit better.
It’s life-affirming. Even if you run the smallest little annual industry association show in the smallest state, a big deal makes you say to yourself, “See, we are worth something.”
However, at the risk of sounding cynical, the quality of Penton’s event portfolio – high though it is – had nothing to do with it.
Despite comments otherwise in Informa’s official announcement, this acquisition was all about Brexit, the immediate drop in the value of the pound following the voters’ decision that the United Kingdom remove itself from the European Union, and the benefits that now will come from converting dollars into pounds.
Although we’re tempted to draw parallels between the Informa-Penton deal and UBM’s acquisition of Advanstar Communications two years ago, it might be wiser to look at how similar it is to Micro Focus’s $8.8 billion takeover of Hewlett Packard’s software assets earlier this month.
The great value of events like Natural Products Expo, Farm Progress, World of Concrete and Waste Expo notwithstanding, it is significant to note that once the deal closes, half of Informa’s revenue will come from the U.S. Add in all its other foreign interests, and only 10 percent of its revenue will be generated in the United Kingdom. Its U.S. operations will be five times as large as those in the U.K. and represent a quarter of its market value.
This acquisition is just the latest in a long-term – as it turns out, quite wise – initiative Informa has to shift the balance away from its home base in the U.K. Remember, this isn’t just the company that bought Hanley Wood’s event business in 2014. It’s also the one that acquired Virgo the same year, Dwell on Design a year later and Light Reading earlier this year.
Michael Hart is a business consultant and writer who focuses on the events industry. He can be reached at email@example.com.