Tarsus Buys 65% Stake in China-based Hometex – Home Textiles Show for $23.8 Million
Tarsus Group has made another acquisition this month and its second recent acquisition in China, with a 65-percent stake of Foshan Huaxia Home Textile Development Co., Ltd. ("Foshan Huaxia") from the Guangdong Home Textile Association and Association Member shareholders.
Foshan Huaxia owns the Home Furnishing Expo (Hometex), the leading biannual home textiles exhibition in China.
The acquisition of 65 percent of Foshun Huaxia was made for an estimated cash consideration of RMB174m (approximately £19.3m and $23.8 million).
"Following the recent acquisition of Intex in Shanghai, we are delighted to be acquiring Hometex in Shenzhen,” said Douglas Emslie, Tarsus managing director.
He added, “These are the two key trading hubs in China for Tarsus and we now have four of the largest exhibitions in Shenzhen. These acquisitions will further deepen our exposure to industries benefiting from the strong shift towards domestic expenditure that is underway in China, which is the second largest exhibition market in the world.
Hometex was launched in 1997 and takes place biannually in the spring and autumn each year in Shenzhen. The next edition of the event will be held in March 2017, which already has a waiting list.
The spring edition, the larger of the two events, occupies all of the available venue capacity, approximately 1.14 million square feet (106,000 square meters in 2016) of gross space.
With the event’s successful growth, the new exhibition center planned for Shenzhen allows for potential expansion to take place from the 2019 edition onwards.
The initial phase of the venue will see it triple in size to 3.2 million sqaure feet (300,000 square meters), a size that could potentially benefit the wider Tarsus portfolio, according to company officials.
The home furnishings market is now the fourth highest sector of family consumption in China. Guangdong province itself accounts for more than 50 percent of the Chinese home furnishing market by value.
The Hometex brand has strong industry backing with one of the original shareholders being the Guangdong Home Textile Association. The Chinese Chamber of Commerce for textiles also has a long-term partnership with Hometex.
"Hometex is the dominant home textile event in China and the new exhibition centre in Shenzhen offers a significant organic growth opportunity,” Emslie said.
He added, “Hometex will work closely with our housewares and home interiors events in Istanbul and Jakarta to exploit the synergies between each of them to grow, broaden and internationalise the events. This represents a strong step forward in our Quickening the Pace growth strategy."
The acquisition is subject to normal governmental approval in China and is expected to complete in the first quarter of 2017, before the spring event.
The remaining 35 percent of the shares in Foshan Huaxia will continue to be held by the Guangdong Home Textile Association and Association Member shareholders, who are also exhibitors at the events. The existing management will also remain in place.
Besides Intex and Hometex, Tarsus also bought an 80-percent stake in Atlanta-based Connect, an events and publishing portfolio serving the meetings and exhibitions industry, earlier this month.