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The Disneyland Of Trade Shows: Is £800M A Mickey Mouse Price For The NEC?


Birmingham's National Exhibition Centre is on the brink of an £800M sale just three years after the city council sold the exhibition centre for £307M.

Lloyds Bank's mid-market private equity business LDC is understood to be close to a sale to private equity funds managed by U.S. giant Blackstone.

The deal comes after strong interest from bidders including private equity giants Blackstone, TDR Capital, Onex, Providence Equity Partners and Centerbridge, Sky News reports. A decision is due any day after an auction organised by Bank of America Merrill Lynch.

The sale, at a 161% premium to the 2015 price, is already raising questions about whether Birmingham City Council got a good deal.

The alternative possibility is that the current sale price is at the higher end of expectations after three years of steady economic growth, and that in the coming years the current rate of earnings growth will be hard to sustain.

The sale price of £800M represents a multiple of more than 13 times earnings, and nearly 15 times earnings if audited figures are used.

Results show income rising in a curve nicely timed for the sale. Announcing full year results in July 2018 NEC Group said earnings had continued to grow since the year end with unaudited earnings before interest, depreciation and amortisation over the 12 months to 31 May 2018 now standing at £60M, up £12M compared with the year to 31 May 2017.

Full results for the year to 31 March 2018 showed revenue of £162.1M, up £4.4M (2.8%) on the previous year. EBITDA was £54.7M, up £4.9M (9.8%).

Group results published in October 2017, showed revenue of £157.7M for the year to 31 March 2017, up £23.9M (17.9%) on the previous year. Reported EBITDA for the trading businesses (including valuation gains on investment properties of £2.6M) was £50.4M, up £18.6M (58%) on the underlying position for the previous year.

Last year NEC Chief Executive Paul Thandi described his mission as to "build Disneyland if Disneyland did trade shows."

UPDATED 15 October to reflect the sale to Blackstone clients.