Implications for M&A during COVID-19

Dear friends,
Dear valuable clients & business partners,

While the Corona virus significantly put financial pressures on all exhibition organisers we continue to see interest in M&A especially from PE backed exhibition organiers.

German Messe organisers have lost around 200m EUR in revenues in Q1 + April alone. As a result many German Messe’s have slowed down their M&A activities in order to consolidate and repatriate overseas capital. As such I expect companies like Reed Exhibitions, Tarsus, Comexposium, ITE, VNU and DMG to be more aggressive compared to their German counterparts.

USA companies have not been active on M&A in Asia so far and Italian exhibition companies are currently also very conservative of entering the Asian market.

However with COVID19 we also see more sellers entering the market as many of the sellers have realized the need for strong international partners. I foresee a very active Q2/Q3 and many companies in China, India, Korea and Vietnam to enter the market. ASEAN & Far East remains a growth market despite the bad economic corona virus impact from the 1st quarter. As a result multiples are more reasonable in China 8.5 -11, ASEAN 7.5 - 9 and India 7.5 - 10.

Many local companies will use the dip in 2020 to seriously think about exiting their businesses to bigger players and to achieve better earn outs for 2021 and beyond.

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