Affinity Group Revs Up With Major Acquisition

Less than a year after embarking on a strategy to build a consumer show division, Affinity Group already has two acquisitions under its belt.

Royal Productions, a Richmond, Va.-based family firm that produces a dozen boat, home and recreational vehicle shows, is the latest for Affinity, which operates affinity clubs and magazines for RV and power sports enthusiasts.

"With all the publications we have that deal with the RV lifestyle or the boating community, there are just so many synergies we think we can have with show organizers," said Tom Gaither, vice president of AGI Events. "We can drive good qualified traffic to these shows. We can add marketing power."

Royal's six employees will constitute AGI Events' Southeast division. David Posner, who co-founded Royal with his parents in 1972, will stay on as vice president and general manager of the new division.

Posner said the business needed an infusion of capital and expertise if it were to continue on a solid growth trajectory. "I'm partnered with a 600-pound gorilla. They are able to bring to the table what most consumer show owners would love to have — one of the best marketing vehicles around."

The various businesses operated by the Ventura, Calif.-based Affinity Group reach millions of customers, which could prove useful, since it's typically tougher and more expensive to draw attendees to consumer events than tradeshows.

Affinity Group produces nearly a dozen national magazines, including Trailer Life, MotorHome, Highways and RV Business. Together, they count more than 6 million readers. The company also publishes eight regional publications and a series of RV manuals and directories.

Besides affinity clubs such as the Good Sam Club, Affinity Group operates 45 Camping World outlets. Customers can also purchase vehicle, life and health insurance, as well as emergency road service, financing and credit cards through the Camping World brand.

Affinity Group's Ehlert Publishing Group subsidiary produces 19 magazines that target power sports vehicle enthusiasts who own motorcycles, personal watercrafts, snowmobiles and all-terrain vehicles. The publications have a circulation of more than 2 million.

For six years, Affinity Group has been putting on the Great North American RV Road Rally, a gathering that draws 12,000 people and 5,500 rigs to the Deschutes County Fair & Expo Center in Redmond, Ore., each July. The event features an exhibit of about 1,000 RVs.

Since 1991, Affinity Group has also produced "RVToday," a television show tuned into by 8 million viewers on the Outdoor Life Network.

Needless to say, the company possesses a vast database that could be used to draw qualified buyers to shows. Further word of upcoming shows also can be spread through Affinity's magazines, television programs, affinity clubs and retail promotions.

Corporate Solutions President Nick Curci, who represented the seller, said Affinity Group is one of few companies that understand the synergy between consumer events and other media holdings.

"They did buy the premiere company in their group," he said. "The real excitement about the acquisition is that Affinity Group, through its other divisions, has an aggressive growth campaign that will allow companies like Royal Productions to be more competitive and to leverage their publishing and online assets to further grow their events. This has yet to be done in the consumer show world."

Although the pace of investment in tradeshows has been brisk, consumer show acquisitions have been relatively scarce. However, Curci believes that's about to change, due to the abundance of established consumer shows on the market.

"This is just the beginning. It's finally starting to happen for consumer shows," Curci said, adding that "the M&A market for consumer shows should be very good for 2006."

Affinity could contribute to that activity, since its goal is to own 100 to 150 consumer shows. Last February, it acquired three Minneapolis area consumer events: the 41-year-old Minneapolis/St. Paul Snowmobile Show, which drew 12,000 attendees to the Minneapolis Convention Center Nov. 11–13; the 13-year-old St. Paul Ice Fishing & Winter Sports Show, which drew 100 exhibitors to the St. Paul RiverCentre Dec. 2–4; and the 39-year-old Minneapolis/St. Paul RV, Vacation & Camping Show, set for Feb. 8–12 at the Minneapolis CC.

"We have our first two platforms. We'd like four or five across the country," said Gaither, an RV industry veteran who joined Affinity a year ago to build its events division.

He said the company is in discussions with other show producers. "We're looking for someone who's been in the business for a while. In a lot of cases, these businesses have grown to the extent they can. Hopefully, we can take their businesses to a new level."

Affinity also plans to launch shows, such as the Spring Pomona RV & Outdoor Lifestyle Show, scheduled April 20–23 at the Pomona Fairplex in California.

Posner said retaining Royal's employees was essential, given the local nature of the business and the close relationships that sales staff develops with exhibitors. The oldest Royal show is the 30-year-old Richmond Boat Show, scheduled Feb. 16–19 at the Richmond (Va.) Raceway Complex.

The company produces the Natl. Capital Boat Show at the Dulles Expo Center in Chantilly, Va.; the Virginia Boat Show and Summer Boat & RV Super Sale at the Showplace in Richmond; the Tidewater Boat Show at the Hampton Roads (Va.) Convention Center; and the Philadelphia Boat Show at the Fort Washington (Pa.) Expo Center.

Royal also organizes three RV shows, two home shows and a golf show in the Southeast. Gaither said Affinity hopes to launch more shows in the region, in addition to making acquisitions.