Tarsus Regulatory News (TRS)

12 Nov 2007 07:00

Tarsus Group PLC12 November 2007 TARSUS GROUP PLC Strategic acquisition in fast growing Dubai market 12 November 2007 Tarsus Group plc, the international business-to-business media group withinterests in exhibitions, conferences, publishing and on-line media, has todayannounced the acquisition of 100% of the share capital of The WR KernOrganisation Limited, the UK based holding company of Fairs and Exhibitions(1992) Ltd ("F&E"), its sole operating company. F&E was founded in 1958 and has been focused on the Middle East since 1976. Itis one of the largest exhibition organisers in Dubai with 8 events coveringthree principal industry sectors:- aviation, printing & packaging and education,covering approximately 50,000 net square metres in total. Tarsus will pay an initial cash consideration of US$23.5 million (approximately£11.3 million). A further sum of up to US$11.5 million (approximately £5.5million) may be payable in cash based on the future performance of the businessover the period to 30 April 2009. The existing management team will remain inplace to conduct the day-to-day running of the business. A significant proportion of F&E's revenue is derived from the biennial DubaiAirshow which takes place on 11th-15th November 2007, its tenth editionanniversary. This event has some 900 exhibiting companies occupying over 32,000net square metres and is expecting more than 40,000 trade visitors. Stronggrowth in participation and revenue are anticipated to result from a move to anew and larger dedicated venue in 2009. Owing to the biennial nature of the F&E business, this acquisition is expectedto be earnings enhancing in the current year and also over the biennial cycle of2008 and 2009. Douglas Emslie, Group Managing Director of Tarsus, said: "Tarsus has continued to make good progress in the second half of the year andcontracted revenue now stands at 97% of our full year forecast. This acquisition presents Tarsus with a unique opportunity to accelerate ourstrategy of expansion into fast growing markets. It will also allow us to extendour core brands into a new geographic territory. The world renowned Dubai Airshow is now Tarsus' largest event and immediatelygives us scale and exposure in the Middle East. This region, and in particularDubai, is expected to benefit further in the future from new exhibition venuesand infrastructure developments. Opportunities to purchase exhibition companiesof meaningful size in this region are scarce and F&E, with its long establishedmanagement and definitive products, is rare. It is our intention to focus on Dubai as we develop our business in the MiddleEast under the existing management of Virginia Kern and the F&E team. Weparticularly look forward to working with the Department of Civil Aviation inDubai to further strengthen the aviation portfolio to the benefit of the dynamicDubai economy". For further information, please contact: Tarsus Group plc:Douglas Emslie, Group Managing Director: 020 7593 4000 Media:Matthew Moth, Madano Partnership: 020 7593 4000 Investors/Analysts:Neville Harris, IRfocus: 020 7593 4215 Information on Fairs and Exhibitions: Virginia Kern is the owner and chairman of F&E, which was established by herfather in 1958 and she has been in the business for the past 30 years. Since1976 it has focused its operations mainly in the Middle East. Virginia Kern andthe existing F&E management team will continue to run the businesspost-acquisition. The company is headquartered in Surrey, UK and has a second office in Dubai.Currently 13 members of staff are based in the UK office and 8 in Dubai. Owing to the biennial nature of the portfolio, the results of the business areheavily weighted to the second half of odd numbered years. Consequently, F&E hadaudited revenues and loss before tax for the year ended 30 June 2007 of £2.3million and £0.8 million respectively. Gross assets and net liabilities atcompletion are estimated to be £7 million and £0.2 million respectively.Proforma revenues for calendar year 2007 are expected to be approximately £9.3million. PORTFOLIO OF EVENTS: Event Title Frequency Next Edition Net Space Occupied (sq.m.)------------- ----------- -------------- --------------------------- Last Edition --------------AVIATION1. Dubai Airshow Biennial Nov 2007 32,000 est. (2007) (since 1989) Nov 2009 2. MEBA - BusinessAviation Biennial Nov 2008 1,120 (2007) (since Jan 2007) 3. Aircraft Interiors Biennial (1st June 2008 - event) 4. MRO Aviation Biennial (1st Jan 2009 -Maintenance Repair event)OverhaulPRINTING & PACKAGING Biennial April 2009 (since 1994)5. Gulf Print 8,500 (2007)6. Gulf Pack Biennial April 2009 (since 1994) 7. Label Tech Biennial (1st Nov 2008 - event) EDUCATION8. Gulf Educational Annual (1st Jan 2008 -Supplies event) The Dubai Airshow, which was first held in 1989, is one of the three mostimportant air shows globally, ranking alongside the Paris Air Show (June 2009)and Farnborough Air Show (July 2008). Substantial investment in aviation across the Middle East will continue toprovide a major driver in the future rapid expansion of the region's aviationindustry. In July 2007 the International Air transport Association (IATA)reported that 'the Middle East airline sector grew three times as fast as theworld average during the first half of this year'. This trend is not new withthe growth in passenger traffic through Dubai International Airport (DIA)averaging 15 per cent per annum since 2002. DIA will be on the list of theworld's top 10 busiest airports in 2007(1). The Dubai market In 2006, 289 trade exhibitions were held in the Gulf states, which represents a40% increase on the number in 2002(2). It is led by Dubai in terms of exhibitionspace and numbers of events. Dubai is regarded as one of the world's leading trading centres and therecognized commercial hub of the UAE. Strategically located, it is a gateway toa market of more than 1 billion people in the fast growing economies of theMiddle East, Asian sub-continent, East Africa and the CIS. The success of Dubai's macro economic policies is clearly reflected in thestrong GDP growth it recorded in recent years. In 2006, Dubai's GDP grew by 16%making it one of the world's fastest growing economies and ahead of China andIndia. With only 3% of Dubai's GDP coming from oil, these figures confirm thesuccess of its diversification and investment policy in high growthmanufacturing and service sectors such as aviation, logistics, tourism, medical,IT and media. With a GDP valued at US$45bn in 2006 and a target average growthrate of 11% per annum up to 2015, Dubai represents an exciting market(3). -------------------------- (1) Middle East MICE & Events, August 2007 (2) The Exhibition Industry in the GCC (UFI January 2007) (3) Dubai Chamber of Commerce and Industry/Gulf News Feb 2007 This information is provided by RNS The company news service from the London Stock Exchange