NEC Group to be Sold

Birmingham City Council Will Seek Offers

Following the conclusion of a strategic review, Birmingham City Council has resolved to seek offers for the NEC Group.

Principal objectives of the proposed sale are to secure an investor who shares the vision and strategic ambitions of the NEC Group and to maximise the proceeds for Birmingham City Council. Bringing the NEC Group under private ownership will enable the business to take full advantage of its growth opportunities and reach the next stage of its development.

The NEC Group is a vitally important contributor to the West Midlands economy, delivering an economic impact of over £2 billion pa and supporting some 29,000 FTE jobs in the region. Securing and enhancing this economic impact is a key objective for Birmingham City Council.

A strong NEC Group attracts further economic activity to the region. This has been evidenced strongly through securing the £140 million plus investment into Resorts World Birmingham by Genting UK. The NEC Group’s position would be strengthened through private sector ownership, and this should act as a catalyst for further investment in the region.

The City Council will invite potentially interested buyers to participate in a pre-qualification process while sale preparations are finalised.

In structuring a transaction, the City Council intends to ensure that the existing uses of the exhibition centre, International Convention Centre and two arenas (LG Arena and National Indoor Arena) are preserved. This will secure the profile of Birmingham and the broader West Midlands as a world-class home of a broad array of live events.

The City Council also intends to retain claw-back rights over certain land at the main NEC site, so ensuring that it preserves potential future development value from a highly attractive site that will be adjacent to the Birmingham Interchange HS2 station.

Since the opening of the National Exhibition Centre in 1976, with seed-corn investment from the City Council, the NEC Group has broadened its business and through the subsequent openings of the NEC Arena (1980), the International Convention Centre (1991) and the National Indoor Arena (1991), the Group has evolved into one of the world’s leading venue management companies.

In addition to its four venues, the NEC Group has successfully established a number of related businesses. These include a national ticketing agency (The Ticket Factory), a catering business (Amadeus) and NEC Group International which is taking its venue management expertise into the operation of third party-owned venues.

The NEC Group’s fast growing ancillary businesses do not have the risk profile normally associated with a local authority-owned business. A private sector owner is likely to have greater appetite to invest more capital in these businesses, and to be able to support the growth of the NEC Group internationally.

Private ownership will enable the NEC Group to grow further and faster and achieve its strategic potential. NEC Group has already shown its ability to attract private sector investment through its partnerships with LG, Barclaycard and Genting UK, but believes that further investment is required to accelerate its development.

The NEC Group has a highly-experienced management team, led since 2006 by Chief Executive Paul Thandi. During the seven years Paul has been Chief Executive the NEC Group has successfully built its brands and consolidated its position as a major force in the conference, exhibition and leisure markets.

Sir Albert Bore, Leader of Birmingham City Council, comments: “A key purpose of the City Council investing in establishing the NEC Group more than 30 years ago was to drive economic development and regeneration.

“This has been achieved, but now the NEC Group has reached a point in its evolution where it needs to be able to adopt the financial disciplines of a private, rather than a council-owned company to enable the next stage of strategic development. In doing so, economic impact and job creation can be preserved and enhanced.

“An open sale process has been identified through an extensive strategic review process as the way to achieve full value for this internationally-renowned asset, whilst achieving the other principal objectives of enabling the Group to achieve its potential and growing economic impact.”

Martin Angle, Chairman of the NEC Group, adds: “The NEC Group comprises four of the best-known and most well-established venues in the UK, located at the heart of England and boasting unrivalled accessibility by all modes of transport. The Group has weathered the challenging economic environment and has a clear vision for its future growth.

“We look forward to working with Birmingham City Council in preparing the NEC Group for this major step forward and believe that its iconic status and portfolio of venues and businesses is likely to attract strong interest from potential buyers, from both the UK and overseas.”

Birmingham City Council and the NEC Group have retained Gleacher Shacklock LLP as financial advisers and Wragge & Co LLP as legal advisers in relation to the sale process.