Private-equity Firm Wins Bid for 101

Surge of buying and selling continues for companies with events

By Margo McCall -- Tradeshow Week, 4/24/2006

A buyer has been found for 101 communications, the Southern California producer of technology e-zines and conferences that was on the market for eight months.

Boston private-equity firms Nautic Partners and Alta Communications teamed up with media executive Neal Vitale to form a new company called 1105 Media and purchase 101, reportedly for $75 million, or 10 times operating cash flow. The Chatsworth, Calif.-based 101 produces 44 conferences and tradeshows, 36 e-newsletters, 23 Web sites and 11 publications.

Vitale, a former executive with Reed Elsevier and Petersen Publishing, will serve as CEO. Jeffrey Klein, who founded 101 in 1998 with backing from buyout firm Frontenac, will vacate the CEO position to assume the role of non-executive chairman.

"Frontenac was delighted with the sale of 101. It was a great business, with a very good event component," said Richard Mead, managing director of Jordan Edmiston Group Inc., which represented 101 shareholders in the sale.

Klein, previously an executive with Times Mirror, said that in addition to working with the board on strategy, he will spend time evaluating his next move.

"I may look to buy another company at some point. I may write a book or teach," he said, adding that "there's a lot of money out there. It's not too difficult to find investment dollars."

During Klein's tenure, 101 made 10 acquisitions. Because of its concentration on technology markets, however, the company suffered during the tech bust of 2001 and 2002. It has since bounced back, particularly in generating online revenue. "We grew our online revenue 30 percent per year for each of the past four years," Klein said.

Most of 101's conferences draw from 500 to 1,000 attendees. Its one large tradeshow, Recharger World Expo, is scheduled to attracted 300 exhibitors and more than 5,000 attendees to Las Vegas' Mandalay Bay Convention Center Aug. 23–25.

Klein said he's relieved that the sale is over. "It's a distracting process that takes you away from the central portion of the business," he said.

Being private-equity players, the new owners are expected to invest in growing the business. Within days of buying 101, 1105 Media purchased Stevens Publishing, a Dallas-based company that puts out seven magazines and newsletters.

The 1105 Media transactions were just two of more than a dozen that closed in recent months. During the first quarter of this year, JEGI tracked 14 conference and exhibition deals worth a total of $220 million, up from 11 transactions worth $129 million in the first three months of 2005.

"There are lots of buyers and lots of sellers," said Mead, who sees the pace continuing "as long as the economy keeps chugging along."

Blantyre Partners CEO Bob Krakoff, who has bid on several properties, agreed. "It's a pretty decent market," he said, adding that the largely absent strategic buyers might soon get back into the game.

Earlier this month, the private-equity backed Apprise Media bought DRIVE! Media, a Concord, Calif.-based publisher of automotive show publications and events in California and the Pacific Northwest. The acquisition marked Apprise's third since its purchase of tradeshow producer Canon Communications a year ago. Apprise bought enthusiast publisher Y-Visionary in August 2005 and British medical device event and publication company Octo Media last month.

Also in April, CurtCo, a Malibu, Calif., publisher of magazines for the affluent, bought Trans World Publishing's Art & Antiques magazines and five art shows.

In March, Active Interest Media — founded in 2003 by Times Mirror executive Efrem "Skip" Zimbalist III — bought Yachting Productions, which manages five consumer boat shows. The transaction closed 30 years to the day after the company was founded by Kaye Pearson, who has a 2-year contract to stay on as a consultant.

The company manages the Fort Lauderdale Intl. Boat Show, billed as the world's largest in-water boat show. Owned by the Marine Industry Assn. of South Florida, it draws upward of 140,000 visitors and 1,600 boats.

"I think it's a good fit. Skip has a varied background. He's familiar with the industry, and he's got a great love of boating," Pearson said.

The Fort Lauderdale-based Yachting Promotions' 120-person staff, including vice presidents Andrew Doole and Dane Graziano, will join Active Interest Media, which was represented in the purchase by JEGI.

Besides the Fort Lauderdale show, the company produces the Miami Yacht and Brokerage Show, Palm Beach Boat Show, St. Petersburg Fall Show and Suncoast Boat Show.

Meanwhile, the sales process continues for several other companies. Reed Exhibitions is still looking for a buyer for a handful of its manufacturing shows. And as of press time, VNU shareholders were considering a private-equity consortium's $9 billion bid for that company, which includes VNU Expositions.

Krakoff, whose company is backed by consortium member the Blackstone Group, is acting as an adviser to VNU. Among the other consortium members are AlpInvest Partners, the Carlyle Group, Hellman & Friedman, Kohlberg Kravis Roberts and Thomas H. Lee Partners.

The consortium has agreed not to break up the company for 18 months after the transaction closes. But the bid is opposed by shareholder Knight Vinke Asset Management, which argues that the €28.75 ($35.21)-per-share offer is too low. VNU management contends that Knight Vinke's asset valuation analysis is flawed.