American giant agrees £800m purchase of NEC Group

American private equity giant Blackstone has confirmed its £800m purchase of the NEC Group.

NEC Group’s owner LDC has agreed a deal that is more than double the £307m it paid Birmingham City Council for the live events business in 2015.

Paul Thandi

The arena and conference centre business is complemented by its ticketing agency The Ticket Factory, hospitality brand Amplify, caterering business Amadeus and sponsorship consultancy NEC Connect Group.

Paul Thandi, chief executive of the NEC Group, said: “Blackstone’s track record in scaling companies, sector knowledge and unrivalled real estate capabilities, make them the ideal new partner for NEC Group to realise the next phase of our ambitious growth strategy.”

Blackstone already owns £200m-turnover events and exhibitions group Clarion Events, which is headquartered in London and has offices around the world.

Arena Birmingham

Lionel Assant, European head of private equity at Blackstone, added: “Under the leadership of Paul Thandi, a best in class management team and the support of LDC, the NEC has transformed its main site into a leading leisure, entertainment and business destination, which continues to benefit from a diverse customer base.

“We have tremendous respect for what has been achieved; NEC Group is iconic and we are excited about our new partnership as we look to leverage our firm’s capabilities in support of the team.”

NEC Group’s profits, as measured by underlying EBITDA, have doubled under LDC ownership, to £54.7m in the year to March 2017. The group has previously revealed that its EBITDA was continuing to increase and had reached £60m for the 12 months to May.

Revenues had also increased by £35m to £162.1m in the three completed financial years since the takeover.

The Bear Grylls Adventure at the NEC

Speaking at NEC Group’s Big Reveal event last week, which showed off its “transformational” lighting, digital and facelift projects, Conventions and Exhibitions managing director Kathryn James set out some of the group’s plans.

“The NEC Group’s vision is to be Europe’s leading business, live events and leisure destination company,” she told the invite-only audience. “Our progress on that path to date has been very successful.”

There has been some sensitivity about the big difference between the sale prices in 2015 and 2018. However NEC Group has reinforced its message about the scale of investment and progress in the three years under LDC ownership.

“Over the last three years we have invested around £48m into capital projects, £22m of it in the last 12 months,” said James.

“We are seeing some really strong performance across the piece. Our performance isn’t only strong across the venues part of our business. The Ticket Factory is doing incredibly well, as is Amadeus.

Kathryn James

“Our UK credentials are going from strength to strength but our international credentials are growing arms and legs as well.”

The world indoor athletics, the Yones All-England badminton championships and the Conservative Party Conference are three of the events this year that have put NEC venues on the global stage. Four of its venues will also be used during the 2022 Commonwealth Games.

NEC Group includes five Birmingham venues – the National Exhibition Centre (NEC), International Convention Centre (ICC), Arena Birmingham, Resorts World and Genting Arena, and the Vox Conference Centre – and it has secured the contract to operate the refurbished Bradford Odeon in Yorkshire.

Legoland Discovery Centre at Arena Birmingham

Its partnership with Merlin Entertainments has seen the opening of Legoland Discovery Centre at Arena Birmingham in July and the Bear Grylls Adventure Centre at the NEC this month.

Bear Grylls is expected to add 500,000 visitors a year and Legoland a further 350,000 people to the NEC’s current annual attendance of more than 7m people.

Its Destination NEC strategy also promises to deliver more, with long-stay exhibitions like Real Bodies and Walking with Dinosaurs to become more of a regular feature, and further developments on the campus.

“Over the coming months and years you are going to see more and more things come up out of the ground at this campus,” added James. “It’s going to be a really exciting time to be around.”