Penton Media Seeks New CEO

For Penton Media CEO Thomas Kemp, the roller-coaster ride is about to come to an end. After eight years at the helm – half of them during boom times and the other half during recession – Kemp is moving aside to let a new leader take the wheel.

The company's independent board members have initiated a national search for a replacement. Kemp, who has agreed to stay on during the transition, estimates the search could take several months. The seasoned business-to-business executive hasn't decided yet what his next move will be. In the meantime, he stressed, "I still have a full-time job and I'm going to continue to work toward the company's goals, strategically and financially."

Kemp said he and the board discussed alternatives for several weeks before a decision was made in late March. "We came to a mutual agreement that it would be a good time for a change in leadership for the company," he said.

The change comes as the outlook is brightening for many B-to-B companies. Penton is still losing money – $88 million last year, compared with about $286 million in 2002 – but Kemp said the business is finally stabilizing.

A year ago, many wondered if the 100-year-old Cleveland institution would survive. Since interest in its large portfolio of technology events began to dry up at the end of 2000, Penton has engaged in aggressive cost-cutting, laying off more than 700 employees, closing 30 offices and selling off A/E/C Systems, Streaming Media, Professional Trade Shows and other properties. At the same time, it renegotiated debt, lured new investment and succeeded in obtaining a $53-million tax refund to keep the doors open.

As unprofitable events were canceled, the company's trade-show holdings declined from 173 per year to about 50 per year. After reaching a peak of $35 per share in mid-2000, last year Penton stock was delisted for failing to maintain a $1 level.

Kemp believes the worst is over. "We don't think that bankruptcy is likely or anything we're worried about today. We're worried about growing the company. It's been a tough time."

Kemp said his replacement will need to understand publishing and tradeshows, as well as how the B-to-B industry has changed in recent years. While that candidate won't likely need to engage in further cost-cutting, he or she will need strong financial and operations backgrounds, and be ready to rebuild morale.

He said his next move will depend on what opportunities avail themselves. But he added: "I've been in the business for 30 years. I love the tradeshow business. I love the B-to-B publishing business, even though it hasn't been very kind to us in the past few years."

Kemp spent 22 years at San Francisco-based Miller Freeman, working his way up to COO before leaving the company in 1996 to become Penton CEO. He took on the additional title of chairman in 2001.

Like so many other companies in the late-'90s, Penton bet heavily on technology. Between 1997 and 2001, Penton acquired 14 tradeshow companies. All but three of them – New Hope Communications, Nutracon and some construction-related shows – were technology-related. The largest acquisition was the $274-million Mecklermedia, which included the fast-growing Internet World shows.

Kemp acknowledged that the downturn – which he said is the worst ever to hit the B-to-B industry – has taken its toll on both those who've lost their jobs and those who've stayed on, albeit with reduced benefits.

Robert Crosland, managing director of Admedia Partners, said he won't be surprised if the 52-year-old Kemp is hired as a CEO at another company. "He's eminently employable, and very highly regarded in the industry," Crosland said. "No question he will pop up in an important job somewhere else. There will always be demand for good CEOs."

Crosland speculated Penton's future leader undoubtedly would need to have a good relationship with Wall Street, since the publicly traded company is just about out of working capital. On the other hand, Crosland said that might not be a critical requirement, since Penton's board already has strong representation from private-equity investors ABRY Partners and Sandler Capital Management. He added that the board could also promote President and COO Dan Ramella.