Blackstone targets £1bn sale of Birmingham’s NEC

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Birmingham’s NEC events centre is being lined up for a sale by its private equity owner Blackstone, which hopes the host of everything from dog show Crufts to this year’s Reform UK party conference will fetch roughly £1bn.

The private equity firm plans to kick off the process to sell the complex in March after the expected completion of a refinancing in February, according to people familiar with the situation.

Advisers are yet to be appointed but early discussions with investment banks have taken place.

Selling the NEC would mark the latest UK leisure industry exit by Blackstone, as the group gears up for a sale next year of holiday park operator Haven Holidays, which it will split from its upmarket holidays business Warner Leisure.

Blackstone acquired the NEC for £800mn in 2018 from LDC, the private equity arm of Lloyds Banking Group. LDC had bought it three years earlier for £307mn from Birmingham City Council to help the local authority settle a £1.2bn bill owed to female staff following a court battle over unequal pay.

The US private equity firm had hoped to treble the NEC’s earnings but the exhibition business was badly hit by the 2020 pandemic as cancelled events prompted a plunge in visitors, revenues and profits.

Blackstone injected £100mn in 2023 alongside a refinancing to sustain the business. The NEC currently has £436.7mn in loans due to mature in 2027.

The sprawling NEC business, which as well as its main exhibition halls includes the BP Pulse and Utilita Arena, the International Convention Centre and Vox Conference venue, hosts more than 750 events a year that together attract roughly 7mn visitors.

The group’s pre-tax profits rose 4.5 per cent to just over £13mn in the year to the end of March on revenues that were up 6.4 per cent to £187.8mn, according to recently filed Companies House accounts.

The NEC’s preferred measure of profit — earnings before interest, tax, depreciation, amortisation and other adjustments including asset impairments, provisions and exceptional operating expenses — rose 21 per cent to £54.7mn over the same period.

The business is about to go through a change in management with former Ocado Retail boss Melanie Smith stepping down as CEO to be replaced by finance chief Paul Reeve.

Blackstone declined to comment.