NEC Group acquired by private equity firm for £307m

IT was revealed on Friday that the NEC Group is being sold to private equity firm LDC, part of the Lloyds Banking Group.

The deal is said to be worth £307m. 

The transaction transfers the NEC into private ownership for the first time which should allow the business to more easily realise available growth opportunities.

The NEC Group includes the National Exhibition Centre in Solihull and  the International Convention Centre and the National Indoor Arena – now known as the Barclaycard Arena – in central Birmingham.

Birmingham City Council had to sell the asset to raises cash to fund a £1bn-plus equal pay bill.

The NEC is one of the UK’s biggest exhibition spaces, hosting events such as the Classic Motor Show, Clothes Show Live and Crufts.

The NEC Group also owns the area’s largest indoor concert venue, the Genting Arena.

It also owns a national ticketing agency called The Ticket Factory; Amplify, a hospitality brand; and Amadeus, a catering operation.

As part of the transaction, LDC will also acquire Birmingham City Council’s interest in Genting Resorts World at the NEC site; a new £200m leisure and entertainment complex, comprising four and five star hotel and spa, retail, and a range of restaurants and bars as well as a  11-screen cinema

Birmingham City Council retains its interest in the Metropole and Crowne Plaza hotel leases. 

The NEC Group is a major contributor to the West Midlands economy, delivering an estimated economic impact to the region of more than £2bn per annum and supporting some 29,000 jobs. 

LDC will be working alongside the NEC’s current management team, led by chief executive Paul Thandi, to deliver further strategic organic and acquisition-led initiatives across all business channels, both in the UK and overseas.

The deal was led by LDC’s Birmingham-based team, including LDC chief executive officer Martin Draper who, along with LDC director Steve Aston, will join the NEC board.

Draper said: “The NEC Group is one of UK’s best known and iconic businesses, particularly so in the Midlands where it is at the heart of the region’s commercial and leisure activities.

“The NEC Group has developed significantly over recent years and we’re delighted to be working with such a strong and experienced team to deliver the NEC’s next exciting phase of development.

“We also look forward to working closely with both Birmingham and Solihull councils to support their plans at both the NEC and city centre sites which include the airport expansion, redevelopment of the Paradise Circus area and in connection with the HS2 project.”

The NEC’s Thandi added: “The NEC Group has grown strongly over recent years, allowing us to redefine our position as a leading player in the live event and exhibition space, whilst delivering strong financial results.

“NEC Group management and staff are motivated to realise our ambitions and accelerate our growth strategy under new ownership alongside LDC.

“From the start LDC has understood the NEC Group’s potential with new ways of deploying investment in resources and capital to the benefit of the business, our customers, and our markets.

“Their support will allow us to capitalise on our market-leading position and our team look forward to building a new phase of organic and acquisitive growth.”

LDC was supported on the transaction by Macquarie which led and arranged bank facilities, Plural Strategy Group and a number of Birmingham-based advisers including Eversheds and Deloitte.

The management team was advised by Catalyst Corporate Finance and Gateley in Birmingham. 

Law firm Wragge Lawrence Graham & Co advised Birmingham City Council on the deal. 

Pauline Biddle, practice senior partner for Deloitte in the Midlands, said: “We are delighted to have been part of something that signifies such a momentous M&A transaction for the region.

“Our M&A team included experts from corporate finance, tax and, importantly, our real estate practice which was key in such a significant infrastructure deal such as this.

“We advised LDC from the first days of the transaction right up until the exchange in the early hours of today and I am extremely proud of the team’s achievement.”