Wachovia Buys Fern, Champion

While tradeshow producers have been changing hands at a frenetic pace this year, investors haven't appeared too interested in general service contractors. Until now, that is.

Wachovia Capital Partners has agreed to spend $70 million to acquire the Cincinnati-based George E. Fern. Furthermore, the Charlotte, N.C. private-equity firm has bought a stake in Champion Exposition Services, reportedly to create a No. 3 competitor for market leaders GES Exposition Services and Freeman.

"George E. Fern is a wonderful company. In their own quiet, regional way, they have built a very nice event-contracting business," said Richard Mead, managing director for Jordan Edmiston Group Inc., which represented George E. Fern.

Founded in 1909 by George Edward Fern as a window-trimming business, the company expanded to fair decorations in the 1930s and was sold in 1962 to Otto Budig, whose sons George and Otto took over the business.

CEO George Budig said he plans to stay on as a consultant, but be at his desk at 7 a.m. instead of 6 a.m. Michael Cox, currently in charge of national sales, was promoted to general manager. Other than that, Budig said, there will be few changes in the way the company operates.

"We just felt that a sale would better serve our estate-planning needs," said Budig, who with his brother also owns intermodal, real estate and banking businesses.

Budig said George E. Fern has a reputation for consistency and customer service. "We've got a good loyal base. We just plod along. You can count on us. Any exhibitor can talk to the top guy. You don't have to go through a lot of levels of management to get an answer," he said.

Mark Epstein will stay on as CEO of the Middleboro, Mass.-based Champion, which serves 375 tradeshows and had been on the market for quite some time. The size of Wachovia's stake wasn't revealed.

"I'm sure the two will be merged," said Joel Novak, managing director of Berkery, Noyes & Co. "There's certainly room for a strong third-party player."

Although service contractors typically generate single-digit margins, Mead said George E. Fern is different. "When we brought buyers to meet George Budig, they were impressed by the quality of the business. They've had very, very strong margins."

Fern's nearly 1,000 customers, serviced through 10 offices, include producers of corporate events as well as exhibitions. The company last year serviced nine Tradeshow Week 200 shows, the same number as Champion. By comparison, Freeman serviced 94 TSW 200 shows and GES, 53.

Mead said an acquisition target's sector isn't as important as its financial condition. "It all boils down to the quality of the earnings and the prospects of the business. It doesn't really matter what business it's in," he said.

The acquisition was just the latest in a flurry. In other recent deals, Advanstar Communications acquired Petersen Events' Off Road Expo, a 4-year-old consumer event that draws 40,000 attendees and 260 exhibitors to a 372,000 net square foot showfloor at the Fairplex of Pomona, Calif., each October. Advanstar also produces Off-Road Impact Trade Show & Conference and is launching a consumer show called DIRTsports Expo Live!

"It's a perfect fit for Advanstar. It will enable them to further grow their Off-Road Group," said Nick Curci, CEO of Corporate Solutions, which represented Petersen in the transaction.

The acquisition was the third in the past month for Advanstar, whose backer, DLJ Merchant Bankers, is exploring its sale. Advanstar's August purchases of POOL and the Project World Trade Shows augmented the company's fashion group.

In September, medical information provider Wolters Kluwer Health acquired Boucher Communications, a producer of five trade journals and a dozen events in the vision care field. The Philadelphia-based Boucher, producer of the Global Orthokeratology Symposium, will become part of WKH's medical research unit. Boucher was represented by Berkery, Noyes & Co.

Meanwhile, with the purchase of Paperloop's CMM Intl. Conference & Exposition, PennWell added a third TSW 200 show to its portfolio. The acquisition of the 27-year-old biennial show, for an undisclosed amount, will allow Paperloop to focus more on its pulp and paper industry products. In February, the company sold its three Tissue World shows to United Business Media. JEGI represented Paperloop in both transactions.

The 2003 version of CMM Intl. at McCormick Place attracted nearly 29,000 attendees to a 257,000 net sq. ft. showfloor with 662 exhibitors, earning it a No. 86 rank on the TSW 200. PennWell, a producer of 60 conferences and exhibitions in a variety of sectors, hosts TSW 200 events POWER-GEN Intl. and FDIC — Indianapolis.