Dmg Wins the Hand of JD Events' AD:TECH

Interactive advertising show will form basis for new technology group

By Margo McCall -- Tradeshow Week, 2/7/2005

When Joel Davis founded his own company, he envisioned it as an incubator to buy and nurture events that he'd later sell — at a profit — to larger tradeshow organizers. Three years later, with JD Events' sale of AD:TECH to dmg world media, the plan seems to be working.

"What I'm most excited about is, it really proves our concept," said Davis. "We started out as an incubator to build up events and make them profitable. This proves that it wasn't just talk."

Dmg, one of the tradeshow industry's most active acquirers, plans to use the AD:TECH series of conferences and exhibitions as the foundation of a San Francisco-based technology group.

"We're looking to establish a small business in the up-and-coming technology sector. We looked at AD:TECH over the past year. We think it's a great show with great potential for the future," said Mark Carr, executive vice president for dmg.

The 8-year-old AD:TECH, originally owned by the now-defunct Imark Communications and bought by JD Events in late 2002, caters to advertising and marketing personnel interested in strategy, online advertising and customer relationship management.

Since purchasing AD:TECH, the Trumbull, Conn.-based JD Events has added a summer conference in Chicago to the original fall conference in New York and spring conference in San Francisco. The inaugural Chicago event, held July 12–13, drew 800 more attendees than the 1,500 anticipated. The San Francisco event held May 24–26 drew 5,000 people, about 2,000 more than forecast.

JD Events also recently signed licensing agreements to expand the show to the United Kingdom and China.

When it was put on the market, AD:TECH inspired strong interest from potential buyers, said Richard Mead, managing director of Jordan Edmiston Group Inc., which represented JD Events in the sale.

"We've gone through a period of very few businesses of quality being available. AD:TECH is one of the first of true quality to come along in a while. Consequently, there was a lot of interest in it," Mead said. "The major strategic buyers all expressed interest in this business."

Davis said he's not surprised. "It's a hot property in an incredibly hot space," he said. "AD:TECH was certainly sitting in the sweet spot."

He added that AD:TECH is now at a stage where it can benefit from a larger organizer. "As a small incubator shop, we weren't staffed up with the resources to do the growth justice. It was really ready for someone with more firepower and more resources and more of a global reach."

Mead agreed: "AD:TECH has clearly outgrown where he could take it. Dmg will take this to a much higher level than JD Events would have done."

Carr said he's "quite open-minded" about whether to pursue more international licensing agreements. Although AD:TECH's conference component is important because interactive advertising is such a new industry, Carr said the exhibition is equally important. JD Events' Cindy Gallucci, who served as AD:TECH conference director, will be hired by dmg to continue in that position.

JD Events and dmg both stress the importance of cultivating industry expertise for the events they run. "We met with Joel and we got on so well. We have a similar way of doing business," said Carr.

With JD Events staying on as manager during the transition, integration should be relatively easy. "There's so much goodwill that we expect the handover will be very smooth," Carr said.

Carr said he has no immediate plans to move the AD:TECH events from their hotel space to convention centers. However, he added, "The way those shows are going, they're already starting to bounce against their space limits in the hotels."

Davis said the sale puts him in a position to "do it again" with another acquisition. JD Events recently bought ShowBiz Expo from Mindshare Ventures and is re-launching the film production industry gathering in November.

"We really see ourselves as a farm system to the major league of show organizers. If we are successful, we can provide good product to the industry. We see the larger organizers as our ultimate customers."

And since he views dmg as a customer, Davis said he hopes AD:TECH turns out to be "the best transaction dmg has ever made."