Tradeshow Mergers Continue Fast Pace

Merger-and-acquisition activity in the exhibition and conference space continued its frenetic pace in the third quarter, with strategic buyers increasingly getting into the game.

Twenty-nine transactions closed with a total value in excess of $2 billion in the first nine months of this year, according to Jordan Edmiston Group Inc. That compares with 19 deals worth $642 million in the first nine months of 2004.

Year-to-date, tradeshow transaction volume is up by 52.6 percent, the largest increase of the 11 media sectors that JEGI tracks. With a 218.2-percent increase in the deals' value, exhibitions and conferences registered the second-highest valuation gain among all media sectors.

"This is a very, very, highly active year. This is certainly one of the best years," said Adam Gross, JEGI vice president of marketing and communications, adding that the activity level shows no sign of abating.

Overall in 2005, media merger activity is up 4.3 percent and transaction value up 130.7 percent. Online media has been the most active sector, followed by newspapers, and marketing and interactive services.

For exhibitions and conferences, the third quarter was the year's busiest yet. Among the 16 deals that closed were Wasserstein & Co.'s $385 million purchase of Primedia Business Information, and Incisive Media's $43 million acquisition of Jupitermedia's tradeshows and Web sites.

Advanstar Communications was on a shopping spree with the purchase of fashion properties POOL and Project Trade Show, as well as Petersen Events' Off Road Expo and TBJ Productions' Michigan Motorcycle Show and Motorama.

Advanstar wasn't the only active strategic buyer, however. Cygnus Business Media, dmg world media, JD Events, PennWell and United Business Media also closed transactions in the quarter.

Besides Wasserstein, one of the only other private-equity players to seal a deal between June and September was Wachovia Capital Partners, which bought George E. Fern and Champion Exposition Services.

With J.P. Morgan Partners' $650 million acquisition of Hanley Wood and Apprise Media's $200 million purchase of Canon Communications, financial players earlier this year managed to close some high-profile deals. However, the year's largest transaction so far was nailed down by a strategic player, T&F Informa, which in June spent $1.4 billion to acquire U.K.-based IIR Holdings, a producer of more than 1,400 conferences and 40 exhibitions.

Gross said higher interest rates could change the picture for leverage-dependent private-equity firms, lowering the prices they can afford to pay. That could increase strategic players' chances of winning sought-after properties. That is, unless the strategic buyers also must borrow heavily to make acquisitions.

With three months left in the year, at least one more large transaction — DLJ Merchant Banking's sale of Advanstar — looms on the horizon. And according to recent reports, VNU is mulling several options, including raising potentially $1.2 billion through the sale of its business information unit, in order to complete its $7 billion acquisition of IMS Health, a U.S. health care data provider. The business information unit includes VNU Expositions, a producer of more than 50 tradeshows, including 12 on the Tradeshow Week 200.