05/06/2013 06:56 EDT | Updated 07/06/2013 05:12 EDT

Onex Corp. buying trade show operator Nielsen Expositions for US$950M

TORONTO - Onex Corp. (TSX:OCX) signed a deal Monday to buy trade show operator Nielsen Expositions for US$950 million from Nielsen Holdings NV, a company best known for its TV ratings business.

Odlum Brown analyst Felix Narhi said the deal was in line with the private equity company's strength in carving out non-core businesses.

"If there's one area where they have some specialty, it's basically taking non-core assets from companies and carving them out," Narhi said.

"They've had some really good successes with that, and it obviously helps the parent company as well because they just don't focus very much on this."

Nielsen Expositions has about 240 employees and is based in San Juan Capistrano, Calif. It produces more than 65 business-to-business trade shows and conference events each year.

The shows involve diversified end markets, including general merchandise, sports, hospitality and retail design, jewelry and photography.

In 2012, Nielsen Expositions generated revenues of approximately $183 million.

The sale will allow Nielsen to focus on its core business, which is providing information and insights into what consumers watch and buy.

The deal is expected to close in the second quarter, which is right in line with Nielsen's planned acquisition of radio ratings company Arbitron Inc. for $1.26 billion.

"We're happy to have this close line up nicely with our anticipated close of Arbitron, our pending acquisition," Nielsen's chief financial officer Brian West told investors during a conference call.

"We'll be able to do the Arbitron deal with a lot less debt, so we'll need to raise $950 million less for that transaction."

Narhi said the trade show deal is on the pricier end compared with previous deals that Onex has made.

"But a lot of those businesses they bought in the past might have different economic characteristics," said Narhi.

"[Nielsen Expositions] does look like it's a very profitable niche business."

Overall, Narhi called the acquisition a good move.

In a note, BMO analyst Bert Powell called the deal "slightly positive," while RBC Capital Markets labelled it neutral.

Onex, with offices in Toronto, New York and London, has approximately $15 billion of assets under management, including $5 billion of proprietary capital, in private equity, credit securities and real estate. Onex invests its proprietary capital directly and as a substantial limited partner in its funds.

In February, Onex Corp. and its affiliates announced plans to sell their 50 per cent interest in a California-based cabinetry maker for approximately US$323 million.

The Onex Group invested $318 million to buy preferred equity of RSI Home Products in October 2008. The Toronto-based group said it will have received US$471 million, including prior distributions, when the sale closes.