Arena Group, the Irish-led supplier of temporary facilities for major sporting events such as the Wimbledon tennis championships and golf’s Ryder Cup, has agreed to be taken over by a United Arab Emirates-led consortium for £71 million (€84 million).
The London-listed company's Irish chief executive, Greg Lawless, plans to step down once the deal is completed, after spending 15 years building up the business, Arena said on Wednesday. The deal is subject to shareholder and regulatory approval.
Mr Lawless (61), who floated Arena on the stock market in 2017, will continue to advise the future owners, Abu Dhabi-based conglomerate IHC Industrial Holding and Saudi Arabia’s Tasheel Holding Group. Tasheel already is Arena’s main shareholder, with an almost 24 per cent stake, and has been instrumental in helping the business grow in the Middle East in recent times.
The bid, at 21p per share, marks a 48.4 per cent premium to the company’s closing price in London on Tuesday and values Mr Lawless’s 3.12 per cent existing stake at £2.14 million. He also has six million stock options that can be exercised at a price of 1p each in the event of a change of control, worth a net £1.2 million.
Arena’s sales fell 55 per cent to £71.6 million for the year to March from the previous 12 months, as events were cancelled across the globe during the pandemic. At their low point, shares in the company were changing hands at 4p each last November.
Still, the sales and earnings decline was limited as Arena switched quickly into new lines of business during the crisis, delivering temporary Covid-19 hospital sites as well as testing and vaccination centres – and temporary mortuaries.
Business has rebounded this year as sporting and other events resumed, amid a rollout of Covid-19 vaccines across its main markets, spanning the UK, the US, Middle East and Asia. Mr Lawless, a chartered accountant and one-time corporate financer 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 normality”.
Acquisitions
Arena spent about £20 million on acquisitions in the year and a half after its 2017 initial public offering (IPO), with purchases including a California-based tent rentals and event services company, Stuart Rentals, and an exhibition design-and-build firm based in Dubai, called TGP.
Mr Lawless had essentially pressed the pause button on deals in the year before Covid-19 hit. However, Arena bought a small San Jose party rentals business that it had been targeting for years in July last year at a discounted price of $200,000, giving it an opportunity to expand its US west coast business.
In April, Arena led a takeover of US events rental company Aztec Shaffer, which was put up for sale after filing for bankruptcy last year. Arena paid $3.35 million for a 50 per cent equity stake, and full management control, and committed with co-bidders, private equity firm Summit Investments and AIG, which was Aztec’s main lender, to providing a $18.3 million debt package to the company.
Tasheel, a leisure sector group chaired by Saudi prince Faisal Abdullah Al Faisal, has an existing broad relationship with Arena and has been instrumental in helping the company grow in the provision of temporary events structures in Saudi Arabia, which is developing in terms of large-scale cultural and sporting events. Tasheel acquired about a 24 per cent stake in Arena early last year in an emergency cash call in the early stages of the pandemic and backed a further fundraising earlier this year to help cement the Aztec Shaffer deal.
Tasheel and IHC, the largest company on the Abu Dhabi stock market with interest spanning solar energy to healthcare, entered talks in May about making a bid for Arena. It is understood they made an initial approach to Arena in early July.
The bidders have lined up Paul Berger, currently the chief executive of Arena’s European and Middle Eastern business, to lead the company after the deal is completed.
