Trade Show Organizer Emerald gives the green light to IPO
The demand for trade show organizing enterprises has been on the rise worldwide since 2014. 2014 is the year when markets boomed across the globe. Businesspeople wanted to get together and share ideas and proven concepts among their peers. They wanted to challenge each other to innovate. That’s where companies such as Emerald Expositions, which fit the niche, got their revenue boosts from.
Emerald Expositions ‘Emerald’ (NYSE: EEX) is an event organizer that brings businesses together in their respective markets. The San Juan Capistrano, California-based firm has been owned by the Onex Corporation (ONEX.TO) since 2013, when it was bought for $950 million. The Emerald business-to-business trade show organizer operates in 13 different markets. Some of these markets include general merchandise, sports, hospitality, retail design, healthcare, construction, and photography. Its innovation in the event organizing niche has seen the business grow and win several accolades.
The Emerald IPO is scheduled for the week of April 24, 2017, along with those of other major players including Cloudera (NYSE: CLDR) and Zymeworks (Pending: ZYME). Emerald is offering 15.5 million of its common stock at $18 to $20 per share with the hope of raising $295 million at midpoint. If the deal goes through Emerald will have a proposed market cap of $1.4 billion. The Emerald IPO lead underwriters will be Citigroup, Barclays, Goldman Sachs, BofA Merrill Lynch, Credit Suisse, Deutsche Bank and RBS Capital Markets.
Investing in Emerald may not be a bad thing for any investor to consider. For one, the company’s steady growth from the time of its acquisition by Onex to now is a positive sign. It shows that this growth may continue in the post-IPO market. Emerald’s expansion has been marked by numerous acquisitions of smaller but successful trade show companies over the years. Some of these acquisitions are the George Little Management Group and the InterDrone Expositions ‘InterDrone’. If Emerald had not bought these firms , let’s just say you’d be looking at less annual income and a very small and limited market for the B2B firm.
Emerald’s current financial reports are promising. In the year that ended on December 31, 2016, Emerald brought in approximately $324 million in sales revenue, a 6% increase from its sales in 2015. The company also has a strong cash flow against debt ratio. That’s because Emerald has made a lot of headway in buying up comppanies and paying off its debt. Investors also like the look of Emerald’s sustainable and stableliquidity.
Emerald will use the funds from the IPO move from its best in US status to the international competitor level. The company aims to expand its bases to other countries so that it can accommodate international exhibitors and foreign attendees.
Now, all those factors make you want to jump into the Emerald IPO. But don’t be too hasty. Remember that Emerald, for all its acclaim, is mainly a one-market firm, unlikely to grow laterally. In fact, about 37% of its total income in 2015 came from its top 5 trading shows, and the trend will likely continue after the initial issuance. Do not dwell on it much though; after all, when is the next time a $2 billion money-making-guaranteed company will be on the market?