Show Organizers are Out to Launch

Luckily for tradeshow organizers, buying events from other companies isn't the only available option. They can just as easily launch their own shows, and usually at a fraction of the cost.

Cygnus Expositions and dmg world media, identified by Jordan Edmiston Group Inc. as last year's busiest tradeshow buyers, both say they use a combination of launch and acquisition to achieve their growth objectives.

"We are intentionally trying to balance our growth through acquisition, as well as new shows," said Jeff Price, president of Cygnus Expositions, which produces about 50 events per year. "The main thing is they need to be complementary to products we already have."

Over the past year, dmg world media, producer of more than 300 shows around the world, has also used a combination of both growth strategies. "We'll buy or launch depending on the situation," said J. Paul Allingham, dmg executive vice president. But, he adds, lately "there hasn't been a lot to offer" in the way of suitable tradeshows for sale.

With suitable tradeshow acquisitions scarce, Cygnus and dmg aren't the only show management companies relying on new-show launches to expand their businesses. According to Tradeshow Week's Data Book, 78 new shows will be launched this year, up from 40 in 2003 and 37 in 2002.

dmg launched 10 new shows last year, according to the annual report of its parent, Daily Mail & General Trust. They include four shows launched by dmg's business media division, three home shows, a resort wear show, a sculpture show and a farm show. Six new shows are planned this year and four are slated for launch in 2005 so far, the company said.

Cygnus this year is launching the PhotoImaging & Design Expo, scheduled for May 5-7 at the San Diego Convention Center, and the Kitchen & Bath Design & Remodelers Showcase Oct. 1 at the Cincinnati Convention Center. Bridal 2005 is on tap for New York's Pier 94 March 13-15, 2005. Price said five show launches are planned this year.

Launches are cheaper, Price said, but they're riskier than acquiring an established show with a proven track record. Launches are also an option when there aren't shows for sale in a given vertical market.

George Little Management is one player that's traditionally leaned heavily on launches. The show organizer will launch the New York Gourmet Housewares Show in New York in October, and a spring version of its New York Gift Cash & Carry Show March 25-27 in the Jacob K. Javits Convention Center North Pavilion. GLM, on behalf of dmg world media, also kicked off the Tourist, Resort & Imprinted Products Show at the Metro Toronto Convention Centre Jan. 23-26.

"We've historically been someone who likes to grow organically," said Jack Withiam Jr., GLM executive vice president and general counsel. "We would make a strategic acquisition if it made sense."

Dmg made three North American tradeshow acquisitions last year. In November, it bought the biennial Intl. Pipeline Exposition from Intl. Pipeline Expositions. And just last month, it finalized the acquisition of CAM-Expo, a biennial show serving the trucking industry, by purchasing its Quebec City-based owner, Pro Expo 2000. Dmg also bought the Central Florida Home & Garden Show.

Allingham said last year's fill-in tradeshow acquisitions complemented dmg's existing portfolio. The pipeline show, which will be held Oct. 6-8 at the TELUS Convention Center in Calgary, gives dmg a more powerful gas and petroleum portfolio. Dmg already produces the Global Petroleum Show, which topped the 2003 Tradeshow Week Canadian 50. Scheduled for June 8-10 at Calgary's Stampede Park, this year's 535,000 net square foot event is expected to draw 1,500 exhibitors and 40,000 attendees.

CAM-Expo, next scheduled for Nov. 5-7 at Centre de Foires de Quebec, is a nearly 20-year-old tradeshow that attracts about 300 vendors. It fits in with dmg's Expocam, a biennial Canadian 50 event sponsored by the Quebec Trucking Assn. The next Expocam is scheduled for 2005.

With its reputation as an aggressive buyer, Cygnus, a subsidiary of Cygnus Business Media, gets no shortage of potential acquisitions. The challenge, said Price, is "sorting out the good from the bad."

"Of late, the issue is that the sellers are looking at downward trends in financials. That trend line works against models that help us determine valuations," Price said. "The seller may be highly confident that things are turning around, but the buyer tends to be more conservative." Lenders and financial partners also tend to fall on the more conservative side of the spectrum.

The Burnsville, Minn.-based subsidiary produces events in 15 sectors, ranging from agriculture and aviation to security and sporting goods. Last year, Cygnus finalized four acquisitions. Two were in the tradeshow sector: the $3.8-million acquisition of Penton Media's 20-year-old Professional Trade Shows and its 25 regional events; and the Solid Surface Intl. Trade Show & Expo. Asphalt magazine expanded Cygnus' construction sector holdings, including its two Natl. Pavement Expo tradeshows. The purchase of Officer.com supplemented its two law-enforcement magazines.