UBM Remains Hot On Acquisition Trail

United Business Media CEO David Levin wants to accelerate the pace of acquisitions for his company, which was already one of last year's most active tradeshow buyers.

Levin, the Symbian CEO who joined UBM last May, said his company this year could end up spending as much as £250 million ($438.9 million) on acquisitions, up from £105 million ($184.4 million) in 2005.

The acquisitions could be anything from Web sites and newsletters to magazines and large tradeshows. "There are two things we're looking for," Levin said during an online interview. "One, of course, is the numbers have got to add up. But the juice for us comes from looking at each one of these communities of buyers and sellers and how we will bring them together."

Levin made the pronouncement as his company reported 2005 revenue of £675.8 million ($1.2 billion), up 21.3 percent from the £557.3 million ($977.1 million) generated in 2004. Operating profit of £137.1 million ($240.4 million) was up 27.3 percent from 2004.

Last August, UBM's U.K. CMP Information subsidiary acquired the chemical show Informex from the Synthetic Organic Chemical Manufacturers Assn. Under its new ownership, Informex drew a record 500 exhibitors and 4,040 attendees to Orlando's Orange County Convention Center Feb. 14–17 even after being relocated from its originally planned location in New Orleans. Although the show will rotate to San Francisco next year, organizers promised that it would return to New Orleans' Ernest N. Morial Convention Center in 2008.

CMP Information has also taken the step of opening a sales office in Princeton, N.J., to promote future U.S. and Canadian shows. The division will launch a Chinese version of Informex at the Linhua Complex in Guangzhou Nov. 6–8. The company plans two new Informex events in 2007.

UBM's CMP Asia, a producer of 80 trade fairs, purchased Japan Jewellery Fair last November for $2.7 million.

U.S.-based CMP Media, however, has been UBM's busiest subsidiary. Last August, it spent $27 million for Light Reading, a producer of five online publications, a webinar series and 19 annual telecommunications-industry events. Three months later, it picked up Seattle-based Black Hat, a producer of information security conferences in Asia, Europe and the United States, for $10 million.

In January, CMP Media, UBM's biggest revenue generator, made the $12.3 million acquisition of Shorecliff Communications, the 7-year-old producer of Broadband Wireless World, RFID World, TelcoTV and other emerging technology events. The same month, it sealed the $65 million purchase of MediaLive Intl.'s 20 technology events, including the well-known Interop and VoiceCon brands.

The acquisitions significantly changed CMP Media's revenue mix. Some 34 percent of the subsidiary's revenue now comes from events and 16 percent from online products. That compares with 23 percent for events and 14 percent for online products in 2004.

Levin said UBM would pursue a large target if a suitable opportunity arose, but has found better opportunities to create shareholder value in the small and midsized deals, where the company has been most active.

"We'd make a big acquisition if we thought it was in the company's interest. We don't want a trophy acquisition. But if the right one was large and available, we'd involve ourselves fully in it," he said.

And the company is not beyond divesting, since last year it sold off £700 million ($1.2 billion) in assets. "We've really redefined what UBM is during the course of this year," Levin said, adding that the company's mission is to "bring buyers and sellers together."

Although the company's print revenues are declining, Levin was enthusiastic about the future of events. "I think they're going to grow. In a more and more virtual world, people want to meet one another, they want to see one another, they want to have the chance to touch and feel the product in order to transact. We're going to keep investing in events. I think it's a part of that rich mix," he said.

Levin is also hopeful about prospects for online media, but stressed that the jury is out on the best approach. He said the acquisition of Light Reading and an engineering Web site called TechOnline will enable UBM to experiment with online models. Both met UBM's criteria of profitability and an 8-percent return during the first year of ownership.