Leading the Quest

Tradeshow executive Kerry Gumas is hot on the trail of growth as the head of a new company formed from five Advanstar divisions

Margo McCall -- Tradeshow Week, 6/6/2005

Kerry Gumas got his first taste of the tradeshow industry back in 1980, while organizing the first U.S. exhibition in China for the Department of Commerce. Over the past two decades, he's earned a solid business-to-business media pedigree by serving in a variety of executive capacities at Reed Exhibitions, IDG World Expo and Advanstar Communications.

Now Gumas is ready to embark on the next leg of his journey, as president and CEO of Questex Media Group, a new company backed by the Audax Group, and formed with the $185 million acquisition of half of Advanstar Communications' business divisions.

As vice president and general manager of Advanstar's information technology and communications group, Gumas had an inside track — and support from Advanstar CEO Joe Loggia — in picking up a formidable media platform. Although he may have avoided the bidding wars that characterize most acquisitions these days, Gumas still has his work cut out for him. The most immediate challenge will be integrating 50 Web sites, 25 conferences, 23 magazines, 20 tradeshows — and 400 employees.

As he wrapped up his last Advanstar show, AIIM ON DEMAND, and prepared to launch into the intensive transitional period, Gumas took a moment to talk about his latest venture with Tradeshow Week Associate Editor Margo McCall.

Question: How was AIIM ON DEMAND's first year at the Pennsylvania Convention Center in Philadelphia? Answer: Absolutely fantastic. This is the first time that AIIM ON DEMAND has been held outside the city of New York. We walked out of here with super attendance. We are very nearly sold out for next year. It was a good indication that the industry that we're serving here, which is IT and document and content management, is continuing to grow.

Q: Were exhibitors and attendees aware that the show is now owned by Questex Media, rather than Advanstar?

A: We had some information we distributed on-site. I know most of the key contacts for the companies exhibiting here. They're all very familiar with what's going on. The exhibitors were really very happy for us and happy the show will be owned by a company that will put it higher on the priority list. This will be our biggest show.

Q: How did the acquisition come together?

A: Advanstar went through its own strategic process, determining that it was going to sell these businesses. I knew, with the technology group in particular, that there might be an opportunity to bid on it. I certainly was interested in that. When Joe (Loggia) and I had that conversation in August of last year, that was my first reaction. I told him I'd like to bid on the technology group. He said he would certainly be supportive of that. From that point on, it was a process of identifying the private-equity partners. That took me up through November.

Q: Did you use an advisor?

A: I had the benefit of a company called Innovation Advisors, and a guy called Doug Brockway, who is the managing partner. I had been introduced to him by a colleague at Advanstar. When Joe informed me that the board was going to agree to let me bid, I engaged Innovation Advisors. They helped with identification of potential private-equity investors. Ultimately, we selected the Audax Group.

Q: Why didn't you go with one of the advisors that specialize in the tradeshow business?

A: (Advanstar's) priority was maximizing the return for shareholders, and doing that in a way that resulted in the least amount of disruption for employees, customers and the ongoing business. Because of those three criteria, there was a process in place to try and best control the situation from Advanstar's point of view. That meant there would have to be a certain amount of privacy involved.

Q: Did you find strong private-equity interest?

A: We found a very receptive market. The assets are strong assets. The interest on the part of private equity in the B-to-B space is very strong.

Q: What will be the biggest challenge in getting Questex up and running?

A: The initial job will be transitioning employees out of Advanstar. There's the physical transition as well, because there are a number of shared offices. We have to get people set up in new office locations, build network infrastructure, install software applications. Much of that work is already in progress. But certainly in the initial 60 to 90 days, the focus is going to be on effecting a smooth transition of Questex and our employees out of Advanstar and off of Advanstar infrastructure systems.

Q: Is the transition spelled out?

A: We have a transition agreement with Advanstar. Even though we've bought the company, certain services will continue to be provided by Advanstar. As we bring our infrastructure up, there is a transition plan in place.

Q: How many offices will have to be moved?

A: We have employees in five locations where moves of one kind or another will have to take place: New York, Cleveland, Duluth (Minn.), Los Angeles and Santa Ana, Calif. All of those locations will be moved to our own spaces. In Newton, Mass., which will be our headquarters, that group right now is all technology group-related. Miami, Sao Paulo, Brazil, and Hong Kong will also remain in place.

Q: Do you have management in place for the transition?

A: We've got someone responsible for facilities, we've got a team responsible for IT that's working with Advanstar's IT team, and we've also hired a number of IT people. We're hiring almost 400 people from Advanstar. They've all already received their letters.

Q: And Reed veteran Tom Caridi will be CFO?

A: Yes, Tom Caridi will be executive vice president and CFO. And we have Rob Ingraham, Don Rosenberg, Kate Dobson and Tony D'Avino, who are operating unit leaders.

Q: How is this transaction different from most?

A: I think the thing that makes this different from some of the other transactions that are out there is that we're basically creating the infrastructure in a very short period of time. But we've been working on this for a couple of months. We're very well prepared.

Q: Will you use centralized systems like Advanstar has done?

A: We're going to be running the same applications. We're going to be setting up a complete mirror image. From a technology standpoint, the software applications that drive billing or accounting or the show Web site or the magazine Web site or production, all of those applications will replicate the same IT infrastructure. Down the road, we might certainly take another look. Our objective is to transition quickly, but with the least amount of disruption to the business.

Q: Will Audax contribute integration experience?

A: One of the reasons I was so excited about working with Audax, in addition to the capital resources, is that they do have a number of strategy or operating competencies within the organization. We have one person on staff working with Tom Caridi who was from Audax. (But) largely, the key functions will be filled by Advanstar employees that are simply moving over to a new company.

Q: You've been working in the technology market and it's had its ups and downs. Do you see better days ahead?

A: Absolutely. The industry growth rates, depending on the application, are in the high-single digits to the mid-double digits, in terms of corporate spending on various IT applications. We're buying a pretty well-focused and balanced portfolio with very strong positions in niche technology markets. The niches that we're in are areas where true corporate spending is happening. I feel pretty good about where we are in the technology business cycle right now. We've come through a period of overinvestment in parts of telecom and (have) come out of the downturn.

Q: Did you see signs of optimism at AIIM ON DEMAND?

A: The companies are here with bigger presences. What struck me was what they were presenting in their booths and how they were presenting it. The companies that are here — IBM, Oracle, Hewlett-Packard, Kodak, Canon — they're coming here with completely new booths and graphics and an upgraded presence. It's clear they've made an investment in their infrastructure. So that's another indication that there's strong confidence.

Q: What other division will be important to Questex?

A: The travel group is our second-largest group. In that group, we have the Luxury Travel Expo in Las Vegas and New York. The Las Vegas show from the day it was launched was a tremendous success and continues to grow. The New York show was launched and was another example of success in terms of exhibit sales and attendance. We've got Travel Agent magazine, which is the No. 1 magazine in that marketplace. I think many people have looked at the travel market and said, "What's the prognosis for travel agents, with everything that's happening with the Internet?" But we're an integrated media provider and we're going to serve that market through multiple media. We will stick to that game plan.

Q: And how do things look for the other sectors?

A: The beauty show (Intl. Beauty Show New York) was a home run in New York. The group launched a spa event that collocated with the beauty show. That has good international potential and good growth potential in and of itself. We've got a home entertainment show in July in Las Vegas. In the portfolio group, we've got a diverse group of magazines that are all tremendously successful. We see great opportunity there to use some of our expertise in show management to launch events.

Q: Do you plan to grow by acquisition, launch or a combination of the two?

A: We will strive to be the integrated marketing and solutions provider in the industries we serve. Our strategy will be to launch face-to-face or print or Web-based products to fill out a complete offering. If there are attractive acquisition opportunities, we'll pursue those. Growth for us is a big priority. The way we're going to do that is growing the core businesses that we own, and launching or acquiring where appropriate.