HYVE.L Regulatory News (HYVE)

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 which forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 ("MAR").

11 March 2022

Hyve Group plc

("Hyve" or the "Group")

Acquisition of the US leading virtual meetings event company Fintech Meetup to accelerate omnichannel strategy

Review of options in relation to Russian business

Hyve Group plc, the next-generation global events business, today announces the acquisition of Fintech Meetup, LLC ('Fintech Meetup'), organiser of the leading U.S. based fintech facilitated meetings event, for an initial consideration of US$5m (c. £3.8m) and contingent consideration of up to US$50m (c. £38.0m) payable in 2024 and 2025 as part of its on-going drive to strengthen our global footprint and advance the Group's omnichannel strategy.

The Board is committed to pursuing its omnichannel strategy, expanding into high growth sectors and diversifying geographically. Since 2017 the Group has actively reduced its portfolio from 269 events to 63 events increasing average revenue per event by over five-fold on a pro forma basis. The revenues are also more diversified, higher quality and better balanced by sector and geography with revenue contribution from non-Russian events increasing from c.50% in FY17 to 73% in FY19 on a pro forma basis[1]. In response to the continuing conflict between Russia and Ukraine, the Board will review all options in relation to Hyve's business in Russia and will update the market as appropriate in due course.

As previously communicated, trading across the Group remains resilient with continued strong like-for-like customer spend, forward bookings and cash collection. The Group's liquidity position remains strong.

Acquisition rationale:

· Fintech Meetup operates in a highly attractive, rapidly growing fintech market, previously identified as one of the key sectors of opportunity to accelerate Hyve's omnichannel strategy.

· Founded in 2021, Fintech Meetup has already become renowned as the leading virtual industry event in the U.S. fintech industry, having facilitated approximately 20,000 meetings for 2,100 participants in 2021 with planned expansion into in-person events in the U.S. in 2023 and significant potential for further geographical expansion.

· The acquisition provides the Group with a unique opportunity to create the world's largest virtual and in-person meetings programme for the fintech sector. Hyve will leverage Fintech Meetup's deep industry knowledge and relationships, customer-enabling technologies and data-driven insights of target audiences.

· Fintech Meetup is led by a highly regarded and experienced fintech industry executive, Jonathan Lear, who will join the Group on completion of the acquisition.

· The business will be acquired from its founders, Anil D. Aggarwal and Simran Rekhi Aggarwal. Simran Aggarwal will continue to work with Hyve until April 2023 to ensure optimal integration and the success of the upcoming events.

· In its first year Fintech Meetup generated revenue of US$1.3m and an EBITDA loss of US$3.8m in the year ended December 2021, as a result of significant set-up investment and launch costs in the first year of operation. In the year ending December 2022 revenues are expected to more than double and the business is expected to be EBITDA positive. Gross assets at completion are estimated to be approximately US$0.8m.

· The earn-out led transaction structure helps to de-risk the acquisition with a significant majority of the potential total consideration contingent on the successful delivery of Fintech Meetup's strategy.

Transaction structure:

· Initial consideration of US$5m (c. £3.8m) is payable in cash at completion, with two subsequent consideration payments based on performance during the earn-out period until September 2024,

o The first earn-out payment is based on performance in the financial year ending September 2023 and is payable in January 2024.

o The second earn-out payment is based on performance in the financial year ending September 2024 and is payable in January 2025.

· Total consideration, including the initial consideration is subject to a cap of US$55m (c. £41.8m).

· The initial consideration and subsequent earn-out payments are expected to be funded from cash reserves and debt facilities.

· The acquisition is expected to be earnings enhancing in the first full year of ownership.

· ROIC is expected to be greater than WACC in the first financial year post-earn out payments.

Mark Shashoua, CEO of Hyve Group plc said:

"We are delighted to welcome Fintech Meetup to Hyve. In a short space of time, Fintech Meetup has delivered significant value to thousands of individuals and organisations across the industry, establishing itself as the hub for the sector. Its flagship programme holds tremendous potential for growth and is a perfect fit for our business as we scale up our omnichannel strategy. Fintech Meetup operates in an important target sector for Hyve and will further strengthen our presence in a key strategic market in the US."

Jonathan Lear, President of Fintech Meetup said:

"We're thrilled to become part of Hyve to accelerate the growth and transformation of all areas of fintech, banking and financial services through our ground-breaking events which focus on delivering significant value across the whole sector. Hyve's solid track record of investing in and growing its acquisitions, including Shoptalk, gives us every confidence in the success of Fintech Meetup's future." 

The Group will announce its trading update for the first half of FY22 on 6 April 2022.

The person responsible for arranging for the release of this announcement on behalf of Hyve Group plc is Jared Cranney, Company Secretary.

For further information please contact:

About Fintech Meetup

Utilising state-of-the-art event technology, fresh approaches to content and unprecedented partner engagement, Fintech Meetup is building the biggest and best events for the fintech industry. Launched as a breakout virtual event in 2021 and 2022, Fintech Meetup will be expanding into an omnichannel format in 2023 with the introduction of an in-person event in addition to its now established virtual format. The next event will be held at the Aria, Las Vegas, establishing Fintech Meetup as the key annual U.S. kick-off event for the fintech industry in Q1. For more information, visit www.fintechmeetup.com.

About Hyve Group

Hyve Group plc is a next-generation global events business whose purpose is to bring together and connect entire sector ecosystems from all corners of the globe. We meet our customer needs to learn, network and trade via both market-leading in-person and online events. Hyve Group plc is all about globally consistent best practice and unrivalled quality. Our vision is to create the world's leading portfolio of content-driven, must-attend events delivering an outstanding experience and ROI for our customers. Hyve's market-leading portfolio of global brands include: Shoptalk, Spring Fair, MosBuild, Bett and Mining Indaba. Where business is personal, where meetings move markets and where today's leaders inspire tomorrow's. For more information, visit www.hyve.group.