US private equity swoops on British event organiser Hyve in £481m deal

US private equity group Providence swoops on British event organiser Hyve in £481m deal

Private equity has swooped on another British company battered by the pandemic.

US-based Providence Equity Partners has agreed to pay 108p per share for event organiser Hyve, valuing it at £481million.

The deal sent shares in the London-listed company, which is behind exhibitions such as fashion trade show Pure London, up 10.4 per cent, or 10.4p, to 110p.

That was above the level of Providence’s bid, suggesting investors believe a rival offer may follow. 

Takeover: US-based Providence Equity Partners has agreed to pay 108p per share for event organiser Hyve – valuing it at £481m

But it’s still 80 per cent below pre-Covid highs, fuelling fears that British firms are being snapped up cheaply by foreign predators in the wake of the pandemic.

Takeover interest in UK companies picked up during Covid as bidders looked to take advantage of depressed price tags in a wave of ‘pandemic plundering’.

G4S, the AA, Morrisons and Ultra Electronics are among firms to have been sold in recent years. 

Danni Hewson, the head of financial analysis at AJ Bell, said the Hyve deal was another example of private equity ‘bagging a British bargain’.

She said: ‘Hyve is perfectly positioned for real growth but with money becoming more expensive, it’s probably no surprise it’s looked for a sure bet to help it expand further and faster than it might otherwise have done.

‘And the board has pushed for what it felt was a fair price for the business in today’s tricky economic climate but a fair deal today looks cheap when you consider the past performance.’

The takeover will mean Mark Shashoua, Hyve’s founder and chief executive, could make as much as £1.2million from the deal, based on his unvested shares in the company.

A number of Hyve directors and major investor Strategic Value Partners have already backed the deal, meaning that Providence has approval from shareholders in control of just under 17 per cent of voting rights.

Hyve chairman Richard Last said: ‘The board believes the offer represents value for shareholders and that Providence, with their knowledge of the sector and belief in the business and management team, will be a good partner for Hyve.’

If approved by shareholders, the deal would close in May and mean the company would de-list from the London market.

Hyve, formerly International Trade Exhibitions, was founded in 1991 by the Shashoua family, who were looking to capitalise on former Soviet Union states transitioning to market economies. 

Almost all its exhibitions now take place across advanced economies, after it sold some global operations over the last year.

But Hyve shares have failed to recover since the £900billion events industry was brought to a halt at the start of the pandemic.

This was worsened by the war in Ukraine and Hyve’s decision to dump its Russian business in response. 

But business has slowly picked up, with company revenues in the 12 months to September 2022 at 90 per cent of pre-Covid levels, with the second half of the year running at 110 per cent.

The US private equity group said: ‘Providence believes that Hyve has established a strong platform for future organic and inorganic growth underpinned by Hyve’s portfolio of high-quality global brands and market-leading events focused on developed markets and in growing sectors.’

Providence’s portfolio includes a majority stake in the New York-listed software firm Double Verify and control of Spanish football giant Real Madrid’s franchise arm.