MCI Group Seeks U.S. Growth:  Insights from CEO Sebastien Tondeur

The MCI Group recently announced that private equity firm L-Gam had taken a financial stake in the company, buying out the stake of equity firms EMZ Partners and Indigo Capital. Financial details of the deal were not disclosed. The exiting companies have backed MCI since 2017 and were important in the group’s development in the U.S. and Latin America.

This is MCI Group’s seventh financial restructuring since taking on external financing around the start of the millennium. Roger Tondeur founded the company in 1987. Today, MCI continues to be a Swiss-based family-owned company led by CEO Sebastien Tondeur, son of the founder. The group has around 1,700 staff spread across 31 countries globally and works with around 1,200 clients. 

Skift Meetings spoke to Sebastien Tondeur, who shared his perspective on the deal and the company’s ambitions.

MCI Eyes U.S. Expansion

Tondeur is very open about MCI’s desire to use its financial backing to spur growth through acquisitions. “We’re looking at making potentially one or two acquisitions in the corporate brand experiences, events, meetings industry,” he said.

MCI has a sizable presence in the U.S. resulting from the acquisition of Coulter in March 2015, which later became MCI USA. According to its 2022 Annual Report, the Americas region is responsible for 34% of its global gross margin of $178 million (€166 million). Europe had the main chunk at 53%, Asia-Pacific contributed 10%, and India and the Middle East generated 3%. Tondeur sees that shifting to around 40%, with Europe also at 40% and the rest of the world contributing 20%.

Tondeur sees plenty of opportunity for growth in the U.S., particularly in the corporate event market. Currently, MCI USA mainly focuses on convention services and association management, inherited from Coulter. Previewing the soon-to-be-released 2023 report, Tondeur shared that last year the U.S. had a gross margin of $59 million (€55 million), $43 million (€40 million) of that coming from the association market (73%). This split is very different from the group’s overall global business split. Associations only represented 18% of its global gross margin in 2022.

MCI Outside Europe and the U.S.

Tondeur’s eyes are clearly set on a U.S. expansion, but MCI is not neglecting Asia-Pacific or the Middle East. He looks at both regions as having lower purchasing power parity than Europe or the U.S., making it harder to build a comparable gross margin. The later opening of Asia-Pacific, in particular, has meant that events were only starting to normalize in 2023. He also points to a lower growth rate in the region driven by China’s single-digit growth, which impacts the entire region.

External Financing

External financing has enabled the MCI group to grow rapidly but requires a deeper technical understanding of finance. This is very intentional. Tondeur believes this external pressure is healthy as it keeps the company accountable for delivering. “If you’re an owner of yourself, you can believe your own lies, and we really wanted to create a structure for a company where we had to walk the talk.”

Tondeur says MCI has no intention of going public. He does not want the company to make decisions based on external influences. However, he does appreciate the rigor and attributes this perspective to the company’s founder. “My dad always says, if we want to be a global company, we need to act like a listed company.”

Despite the focus on growth in the U.S., MCI’s new financial backers are once again Europe-based. Tondeur recognized that the company could not access U.S. funding due to its relatively small national operation. However, Tondeur does not see this as a challenge and highlights the strategic support that new backers can offer. “We got well along in terms of strategic thinking, their interest, the questions that were asking how we felt they could contribute to the strategy with Roger and me,” he said.

New investor L-Gam is a mid-market investment firm active throughout Europe, founded in 2013 in partnership with the Princely Family of Liechtenstein. Financial partners LCL, BNP, BCGE, and UBS continue to support the group, which also has CIC, Palatine, and SG as new banking partners. Canaccord Genuity and PwC France were also involved in the deal as advisors.

Events Industry Lacks Structure

Tondeur is concerned that the industry lacks objective data. He believes that having more financial partners involved in the events industry would forcibly solve its lack of structure. He also sees opportunities in aggregating and strategically managing procurement, so that long-term business relationships replace inefficient piecemeal sourcing and case-by-case buying.

MCI’s annual reports, which it shares publicly, demonstrate its rigorous reporting. These reports reflect its discipline and strategic execution and also put it in good stead with large clients. “If we wanted to work with big global brands, we wanted to show that we act like them,” said Tondeur. The same applies to sustainability reporting, something that he is confident has put MCI ahead of competitors when it comes to the impending CSRD reporting requirements.

MCI Seeks a Technology Advantage

MCI also seeks to explore new territories in the technology realm. Like many others, artificial intelligence (AI) is a big focus. Tondeur has just announced internally the creation of an AI team looking across all divisions to give the company coherence in its approach to AI. 

It will also be working on its own proprietary AI. “Where the magic will happen is when we can connect our own knowledge of the company, that’s where it makes a huge difference. It’s when we create our own MCI group, general intelligence,” said Tondeur.

AI is already widespread within MCI in a four-stream strategy: AI literacy for all through its global learning and development platform, creative use of AI for multimedia content creation, office productivity, and using AI within dedicated tools 

The company’s thirst for technology does not end there. Metaverse and blockchain are also still part of Tondeur’s thinking, despite his admitting that they are no longer in fashion.

In January, MCI acquired Matter, a Paris-based media company specializing in social content and influence, which can be applied to all types of events. This acquisition was important so that the group could offer clients content amplification through a separate specialist brand.

Tondeur has seen a huge shift in the way brands approach communication. While in the past, product launches would have involved non-disclosure agreements and total secrecy, today, brands want events to provide instant exposure. As a result, social media is now part and parcel of every corporate communication plan. He calls this a “socialized content era” and makes it clear that “there is basically no live event interaction without content being socialized.”