The Arena Group, the Irish supplier of temporary facilities for major sporting events such as the Wimbledon tennis championships and the Ryder Cup golf, has agreed to be acquired by a consortium led by the United Arab Emirates for 71 million pounds (84 million euros).
Arena said on Wednesday that the chief executive of an Irish company listed in London, Greg Lawless, plans to step down once the deal is completed, after spending 15 years building the business. The transaction is subject to shareholder and regulatory approval.
Mr. Lawless, 61, who brought Arena to the stock market in 2017, will continue to advise future owners, Abu Dhabi-based IHC Industrial Holding Group and Saudi Arabia’s Tas’heel Holding Group. Tas’heel is already the major shareholder in Arena, with a stake of approximately 24 percent, and has been instrumental in helping the business grow in the Middle East in recent times.
The offer, at 21 pence per share, represents a 48.4 per cent premium to the company’s closing price in London on Tuesday and is estimated at 3.12 loles per share outstanding at 2.14 million pounds. He also has 6 million exercisable stock options at 1p each in the event of a change of control, with a net worth of £1.2 million.
Arena sales are down 55 per cent to £71.6m in the year to March from the previous 12 months, as events around the world have been canceled during the pandemic. At their lowest, shares in the company were trading at 4p each last November.
However, the decline in sales and profits was limited as Arena quickly switched to new lines of business during the crisis, providing temporary Covid-19 hospital sites as well as testing and vaccination centers – and temporary mortuaries.
Business has rebounded this year as sporting and other events resume, amid the spread of Covid-19 vaccines in its key markets, which include the United Kingdom, the United States, the Middle East and Asia. Lawless, a chartered accountant and one-time financier with Davy, told The Irish Times in an interview in July that he saw the current period as a « transitional year, with a gradual return to normalcy ».
£20 million in acquisitions
Arena spent around £20m on acquisitions in the year and a half after its 2017 initial public offering (IPO), with purchases including California-based tent rental and event services firm Stuart Rentals, and Dubai-based exhibition design and construction firm, called TGP.
Lawless had essentially hit the deals pause button the year before the Covid-19 hit. However, Arena bought a small party rental company in San Jose that it had been targeting for years in July of last year at a discounted price of $200,000, giving it a chance to expand its business on the US West Coast.
In April, Arena led the acquisition of US event rental company Aztec Shaffer, which was put up for sale after filing for bankruptcy last year. Arena paid $3.35 million for a 50 percent stake, full management control, and committed with its bidding partners, private equity firm Summit Investments and AIG, which was Aztec’s primary lender, to deliver an $18.3 million debt package to the company.
Tas’heel, the entertainment sector group headed by Saudi Prince Faisal Abdullah Al-Faisal, has an existing extensive relationship with Arena and has been instrumental in helping the company grow in providing temporary event structures in Saudi Arabia, which are evolving in terms of the scope of cultural and sporting events. TasHeel acquired about 24 percent of Arena’s stake early last year in emergency cash in the early stages of the pandemic and backed raising other funds earlier this year to help solidify the Aztec Shaffer deal.
Tas’heel and the International Humanitarian City, the largest company on the Abu Dhabi stock exchange with interest spanning from solar energy to healthcare, entered talks in May over a bid for Arena. It is understood that they took a preliminary approach to the Arena game in early July.
Bidders Paul Berger, the current CEO of Arena’s Europe and Middle East business, lined up to lead the company after the deal was completed.
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