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Blackstone to acquire Cvent for $4.6bn

Updated: Oct 30, 2023




Acquisition Overview


Cvent Holding Corp., an industry-leading meetings, events, and hospitality technology provider, announced that it has entered into a definitive agreement to be acquired by an affiliate of private equity funds managed by Blackstone in a transaction valued at an enterprise value of approximately $4.6 billion on 14th March 2023. The announcement continues a recent trend that has seen myriad companies retreating from the public markets, driven by opportunistic private equity firms looking to make a fast buck from nervous stockholders.


Deal Structure


According to the agreement, stockholders who own Cvent stocks will be given $8.50 for each share they have in cash. This payment is 52% higher than the average share price over the 90 days leading up to January 30, 2023. This was the day before news reports came out suggesting a possible deal. The Abu Dhabi Investment Authority (ADIA) will be a major investor, along with Blackstone, in a subsidiary created for the transaction.


On top of the acquisition agreement, Qatalyst Partners is acting as financial advisor to Cvent, and Kirkland & Ellis LLP is acting as legal counsel to Cvent. J.P. Morgan Securities LLC is acting as financial advisor to the Special Committee, and Goodwin Procter LLP is acting as legal counsel to the Special Committee. Simpson Thacher & Bartlett LLP is acting as legal counsel to Blackstone, and Evercore, Morgan Stanley & Co. LLC, and UBS are acting as financial advisors to Blackstone.


Cvent Overview


Founded in 1999, Cvent provides a complete range of technology solutions to enhance the effectiveness of events by managing the entire event management process. As of December 31, 2022, Cvent has served roughly 22,000 clients across the corporate, non-profit, higher education, and hospitality sectors. Since its inception in 1999, Cvent has successfully managed over 5 million events and maintains a list of more than 302,000 hotels and venues on the Cvent Supplier Network as of December 31, 2022. The Cvent Supplier Network is an online platform designed to help users search, negotiate, and contract hotels and venues for event space.


Founded date: 1999

Number of employees: 4800+

Enterprise value: $4.21Bn

LTM Revenue: $170.92M

LTM EBITDA: $82.44M

Market Cap: $4.21Bn


Cvent also reported quarterly and annual revenue, perhaps for the final time as a public company. Cvent reported fourth-quarter revenue of $170.9 million, up 18.2 percent year over year. Event Cloud revenue increased 17.2 percent to $120.6 million while Hospitality Cloud revenue increased 20.5 percent to $50.3 million.


For the full-year 2022, total revenue increased 21.5 percent year over year to $630.6 million, while Event Cloud revenue increased 21.8 percent to $441.1 million, and Hospitality Cloud revenue increased 20.9 percent to $189.5 million.


Cvent's fourth-quarter net loss was $19.1 million, compared with $21.5 million in the fourth quarter of 2021. Its full-year net loss was $100.3 million, compared with a net loss of $86.1 million one year prior.


Given the pending acquisition, Cvent said it would not hold a conference call to discuss its results, nor would it issue any forecasts for 2023.


Industry insight


The global event management software market was valued at USD 7.43 billion in 2022 and is expected to experience a compound annual growth rate of 12.8% during the forecast period. The market's revenue growth is being driven by a variety of factors, including the increased use of automated event management tasks, the need to reduce event budgets, the trend toward virtual events, and the growing number of sports, gaming, and other public events.


The growing popularity of virtual events has driven demand for event management software in recent years, fuelled by the COVID-19 pandemic and the rise of remote work. Many event management software companies have developed virtual event platforms that offer live streaming, interactive seminars, virtual booths, and networking tools. In August 2020, Cvent introduced the Cvent Virtual Attendee Hub, a new virtual event solution designed to work with its suite of event marketing and management capabilities. The Cvent platform provides a single solution for organizing all types of events, whether in-person, virtual, or hybrid. In January 2023, Zoom unveiled a new event management system called Zoom Sessions, which offers powerful production, branding, and analytics capabilities to engage guests, increase ROI, and strengthen brand identity.


However, the high cost of installing these software solutions is one of the major challenges facing the market. Many event management software providers require organizations to invest in hardware and infrastructure in addition to the software itself, which can be a significant expense. Additionally, companies may need to invest in employee training, which can increase overall costs. Smaller businesses or those with budget constraints may find it challenging to invest in event management software. Moreover, the adoption rate of event management software solutions may be slowed down by the reluctance of some event planners to move from their traditional event planning and execution methods to a new software platform.


The global event management software market has great potential for growth with the increasing use of Internet of Things (IoT) technology. By implementing IoT, organizers can simplify the check-in process for attendees by scanning RFID wristbands or badges instead of physical tickets. Additionally, technologies such as RF Mat can track attendee traffic and help attendees navigate the event floor plan on their smartphones. Another area of potential growth is the adoption of real-time analytics solutions such as Bluetooth transmitters (iBeacons) and mobile analytics software. iBeacons, originally developed by Apple, can enhance the event attendee experience with features such as gamification, alert messages, and social information exchange. Furthermore, these solutions can help event organizers track attendee information in real time.


Strategic rationale


After receiving guidance from a special committee made up entirely of unbiased and independent directors, the Board of Directors at Cvent have given their unanimous approval for the merger agreement. The transaction is anticipated to be finalized by the middle of 2023, subject to standard closing conditions, including approval by Cvent's shareholders and required regulatory authorizations. After the transaction has been completed, Cvent's common stock will no longer be publicly traded, and the company will be privately owned. To finance the transaction, Blackstone has secured a fully committed credit facility worth $1.0 billion.


With its profound knowledge and expertise in the event and hospitality industry, Blackstone, as one of the largest private equity firms worldwide, is set to become an instrumental growth partner for Cvent. The company intends to leverage Blackstone's support to continue investing in its business and delivering innovative solutions that cater to the ever-evolving needs of its customers, further strengthening the meetings and events ecosystem.


Blackstone has identified the sustained recovery of events and travel as one of its topmost investment themes, owing to its extensive experience in the hospitality, events, and real estate sectors. Consequently, Blackstone is confident of its potential to provide Cvent with valuable resources, support, and insights, thus contributing to the continued success and growth of the business.


Long term prospect


As part of the acquisition deal, Vista Equity Partners, a renowned global investment firm that specializes in enterprise software, data, and technology-enabled businesses, and which also happens to be the majority shareholder of Cvent, has agreed to participate in financing the transaction by investing a portion of its proceeds as non-convertible preferred stock. This means that Vista will provide financial support to the acquisition while still maintaining its position as a preferred stockholder in Cvent.


The events management industry has undergone a significant transformation with the digitization of events, especially in the wake of the COVID-19 pandemic. Cvent's track record of innovation, coupled with its loyal customer base, positions it well for growth in the emerging digital events landscape. The acquisition is expected to provide Cvent with access to additional resources, expertise, and technology, which will enable it to further expand its capabilities and offerings to better serve its customers in this new environment.


Given these exciting growth opportunities, it is expected that Cvent will continue to excel and achieve great success in the future. It is hopeful that the company leverages its strengths and expertise to capitalize on the potential of the digital events industry, and to further advance the field of event management through innovative technology and exceptional customer service.


Written by Pui Yi Chan (University College, Durham University)


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