2012 shaping up to be a year of exhibition acquisitions

A few days ago, UBM announced that it has plans to acquire the leading railway exhibition in Brazil. This company cannot stop writing cheques! Over the past decade in Asia, UBM has made more acquisitions than any other company.

Even in the first quarter of 2012, UBM closed three deals:

• Renewable Energy India
• Shanghai ShowStar
• Malaysian International Furniture Fair

Also in the first three months of the year, Reed Exhibitions picked up two Australian exhibitions:

• All-Energy Australia
• Online Retailer Conference & E-commerce Expo

Global Sources made its first event acquisition ever - and it was a sizable one. the Shenzhen International Brand Clothing & Accessories Fair. The company paid over US$17 million for an 80% stake.

Given the economic weakness in Europe and the U.S. and the relative strength of most Asian economies, this is likely to be a very significant year for acquisitions in the region.

Update: Global Sources elaborates on NASDAQ issue

Global Sources issued a statement this afternoon explaining the reason for the halt in trading of its NASDAQ-listed shares last week. As we suspected, the suspension was as a result of a very minor issue. Global Sources’ Executive Chairman Merle Hinrichs was quoted in the statement:

“NASDAQ’s decision to halt trading of GSOL shares on April 3 came without warning and in management’s view was totally unjustified.NASDAQ’s request for additional information above and beyond normal financial accounting requirements has been fully and satisfactorily provided to NASDAQ. Trading in GSOL shares resumed on April 4.

“As we understand it, recently NASDAQ has begun the practice of requiring companies with Chinese operations to provide physical evidence of cash balances at banks via third party accountants. While GSOL has been listed on NASDAQ since 2000 without reproach, we too received NASDAQ’s request in November 2011 to engage an independent CPA firm to conduct a physical visit to our financial institutions in Hong Kong and mainland China. We complied and delivered the reports on a timely basis. However, as one report was dated December 31, 2011 and another dated March 31, 2012, without notice NASDAQ determined it required additional information and halted our share trading on April 3. We immediately clarified the matter with NASDAQ and trading was resumed on April 4, reflecting the time zone difference. We will continue to maintain open communications with NASDAQ and any additional requests will be met promptly.”

It is hard to imagine why NASDAQ needed to suspend trade of Global Sources’ shares for such a minor point of clarification.

India plans new west coast venue

News this week: According to media reports, the Greater Cochin Development Authority (GCDA), has plans to build an exhibition centre using a private-public partnership - with the GCDA holding a 60% stake.

Chairman of the GCDA, N. Venugopal, was quoted saying that previous plans to lease out 10,117 m² of land to a private builder on a 35-year lease at Manapattiparambu have been scrapped.

Exhibitions in the Cochin are currently organised in temporary structures. Venugopal said a permanent and modern centre for holding exhibitions is needed as the city hosts 200 days of exhibitions each year. The construction schedule and anticipated opening date were not provided.

This post is excerpted from BSG’s weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service.You can also follow us on Twitter for all the latest updates.

Alibaba launches social shopping platform

News this week: China’s largest e-commerce company, the Alibaba Group, has launched the beta version of its social shopping platform, Fa Xian. The new social shopping platform, a combination of social networking and e-commerce, is reportedly attracting up to 60,000 unique visitors per day.

Similar sites in the U.S. emerged first (Kaboodle and Pinterest). These are social shopping platforms which allow users to post photos of items on virtual pin boards. Other users on the platform can comment on or even purchase those items. Fa Xian’s competitors operating in China include Mogujie, LinkChic and Xinxian.

A director at eTao, Alibaba’s search unit in charge of Fa Xian, said the company has about 10 partners currently and looking to reach 100 by the end of this year.

This post is excerpted from BSG’s weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service.You can also follow us on Twitter for all the latest updates.

Teaching Expo teams with Diversified

News this week: Diversified Events Hong Kong will partner with Hong Kong Education City to jointly organise the Hong Kong Learning and Teaching Expo for its 2012 edition.

The previous editions of the Hong Kong Learning and Teaching Expo were held in July 2010 and June 2011. The 2012 event will run from 22^nd to 24^th November at the Hong Kong Convention and Exhibition Centre (HKCEC). Products and services exhibited at the show will include school infrastructure, learning management systems, learning and teaching services/solutions/resources, student assessment solutions & services, services/products catering for learning diversity, and teacher’s professional development programmes. The upcoming event will also focus on the development of e-learning & e-textbooks and the needs of children with special educational needs.

This post is excerpted from BSG’s weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service.You can also follow us on Twitter for all the latest updates.

Hannover Milano Fairs Shanghai launch vehicle show

News this week: Trade fair organiser Hannover Milano Fairs Shanghai Ltd. (HMFS), a subsidiary of Germany-based Deutsche Messe, announced the signing of an agreement with the Hanyang Special Purpose Vehicle Institute and Wuhan New City International Expo Center Management Company to jointly organise the China Commercial Vehicles Show (CCVS) later this year.

Held at the newly opened Wuhan International Expo Center, the three-day trade show will run from 11^th to 13^th October 2012. CCVS will be held in a biennial format, with this year’s show divided into three main product categories: vehicle, parts & accessories, and inspection & maintenance – covering over 50,000 m² of exhibition space.

James Fu, general manager of Hannover Milano Fairs China, said, “According to the 9% growth rate of commercial vehicles in the next decade, CCVS will particularly study and present the future development of special-used vehicles like school bus and coaches, which are generally concerned by the society.”

This post is excerpted from BSG’s weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service.You can also follow us on Twitter for all the latest updates.

NASDAQ briefly halts trade of Global Sources’ shares

On 3^rd April, NASDAQ suspended the trade of shares of B2B media company, Global Sources. According to NASDAQ, the reason for the suspension was that NASDAQ had requested “additional information” from Global Sources.

Trading of Global Sources shares resumed on 4^th April. Prior to the suspension, Global Sources share last traded at US$6.20. The share price closed down nearly 14% on 4^th April at US$5.34.

Global Sources has opted not to issue a press release to elaborate on the move by NASDAQ.

Under the “SEC Filings” section of its corporate website, Global Sources has posted a Form 6-K SEC Filing.

Even after reading the Form 6K, I am not clear what information NASDAQ wanted or what information Global Sources supplied to allow shares to begin trading again. I am not even entirely clear what the SEC Form 6K is for - something about foreign private issuers of securities and providing information uniformly across markets. Investopedia helped somewhat.

Unless the company was legally prohibited from doing so, it is clear to me that Global Sources should have issued a press release simply clarifying what information NASDAQ requested, why the company had not provided it previously and what information was subsequently sent to NASDAQ.

It seems likely that this was a very minor issue which was obviously easily resolved - judging by how quickly trading of shares resumed. So from an investor relations and communications standpoint, why ignore the halt in trading and potentially allow uncertainty to creep into the market?

In the current climate, investors in the U.S. are exceedingly suspicious of China-related companies listed in the U.S. (see Sino-Forest, China Forestry, RINO International, China MediaExpress, and on and on).

I know from following the company closely for years that Global Sources is obviously a financially healthy, well-managed company which continues to grow both its top and bottom line. So opting to not issue a simple, short press release offering some additional clarity seems misguided at best.

U.S. media M&A activity down 7% in Q1

News this week: Media-focused investment bank, The Jordan, Edmiston Group, Inc. (JEGI) reported M&A activity in the U.S. media market for the first quarter of 2012. The total number deals in the quarter was 333, which is a new record and an increase of 51% year-on-year. However, the total value of deals dropped 7% from last year’s US$11.1 billion to US$10.3 billion in the first quarter of 2012.

In the quarter, 14 deals involving exhibitions & conferences accounted for US$258 million, compared with six deals valued at US$34 million in the same period of 2011.

In the B2B media sector, the number of deals and deal value both increased. A total of nine B2B media deals occurred in the quarter, up 125% from last year’s four deals. Value of the deals jumped to US$63 million in Q4 2012, four times that of 2011’s US$15 million.

The number of deals involving B2B online media & technology dropped 26%, from 23 down to 17 in the quarter; while the deal value contracted 94% to just US$182 million, down from US$2.8 billion in 2011. The decrease in value of deals in the sector was due to the spike created by eBay’s US$2.4 billion acquisition of GSI Commerce last year.

This post is excerpted from BSG’s weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service.You can also follow us on Twitter for all the latest updates.

Tarsus acquires Turkish exhibition organiser

News this week: London-listed B2B media group, Tarsus, agreed to acquire 70% of Turkish exhibition organiser Lifemedia Fuarcilik A.S. (Life Media) for an initial consideration of £10.6 million. Tarsus estimates deferred payments of approximately £5 million will be due in 2013, bringing the estimated total payment to approximately £15 million.

Established in 1997, Life Media mainly focuses on the housewares and gifts sector. The company is the owner and organiser of Istanbul-based trade fairs Zuchex and Ideal Home Fair, as well as publisher of the related trade journals. Life Media’s founder Irfan Tiras will stay on board and continue to manage the business.

The deal is part of Tarsus’ 50/13 strategy which aims to increase Tarsus’ revenues from fast growing emerging markets to 50% by 2013. The acquisition of Life Media brings Tarsus’ revenues from emerging markets to 43% of the company’s total revenues.

This post is excerpted from BSG’s weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service.You can also follow us on Twitter for all the latest updates.

Alipay ventures into logistics, PayPal looks to China

News this week: Alibaba Group’s e-payment subsidiary, Alipay, announced plans to invest US$79 million to diversify its business into the China logistics market over the next three years.

The investment will see Alipay unveil handheld devices that can be used to track parcels and accept payments for goods purchased online. The portable devices target China’s collect-on-delivery (COD) market, which according to Alipay, is the preferred method of payment for 70% of all online purchases made on China’s B2C sites, excluding those on the Alibaba Group’s Tmall.

An Alipay spokesperson stated the new service will only cater to offline payment for online purchases. The small processing fee charged to consumers will be split by Alipay (20%), banks (70%) and UnionPay (10%) – China’s bankcard association processing inter-bank transactions.

In a separate story, U.S.-based e-payment company PayPal is looking to expand its business into China. The company is currently awaiting the approval of its license application from the People’s Bank of China. PayPal, a subsidiary of eBay, submitted an application to operate in China’s domestic payments market at the end of last year.

PayPal also offers PayPal Here, a device for Apple’s iPhone that can swipe credit cards and scan checks in the U.S., Canada, Australia and Hong Kong.

Currently, no overseas companies have been awarded a permit to process domestic payments within China.

This post is excerpted from BSG’s weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service.You can also follow us on Twitter for all the latest updates.