Primedia, Jupitermedia Exit Events Biz

Divestitures leave both companies transformed from earlier incarnations

By Margo McCall -- Tradeshow Week, 8/15/2005

With their recent divestitures, Primedia and Jupitermedia are both turning their backs on the events business.

Jupitermedia's $43 million sale of the Search Engine Strategies Conference & Expo series to London-based Incisive Media underscores the company's new image as a digital-art seller. And Primedia's $385 million sale of its business information unit to Wasserstein & Co. lets the company embrace enthusiast media.

While the sales finalize those companies' exit from events, so do they mark the entry of new players. The publicly traded Incisive produces dozens of U.K. publications and more than 150 financial and insurance events. But the SES purchase marks its first foray into the U.S. events market.

"It's really an opportunity for Incisive to grow this brand internationally and use the platform established to launch new shows in the same manner," said Adam Gross, vice president of marketing for Jordan Edmiston Group Inc., which handled the sale. "This is also a chance for them to grow their footprint in the U.S."

Wasserstein, the New York-based buyout firm, previously invested in American Lawyer Media, Hanley Wood, Real Estate Media, The Deal and New York Magazine. The acquisition of Primedia Business Information — producer of more than 100 Web sites, 70 publications, 50 directories and 25 events — was funded by Wasserstein's U.S. Equity Partners II.

Primedia's events unit is headed by Margaret Pederson, current chair of the Society of Independent Show Organizers. Its largest show is the 220,000 net square foot WasteExpo, which ranked No. 105 on the latest Tradeshow Week 200.

Primedia, which recently sold New York Magazine and its About.com Web sites, in April enlisted Credit Suisse First Boston's help in finding a buyer for business information. During the auction, some wondered if the property would command the 12-plus multiples of Veronis Suhler Stevenson's sale of Canon Communications and Hanley Wood.

The purchase price amounts to 10.6 times 2004 operating cash flow. "It's really in the same ballpark" as recent transactions, said Primedia spokesman Elliot Sloane, who described the bidding process as "very active." Although there were reports that Wasserstein's U.S. Equity Partners was a last-minute bidder, Sloane said Wasserstein "expressed interest early on."

Jupitermedia CEO Alan Meckler said the sale price of SES amounted to 13.5 times 2004 operating cash flow. He wrote in his blog that the proceeds would be used for acquisitions.

"Essentially, with the sale of SES, for all intents and purposes, we are out of the tradeshow business," Meckler told analysts during the company's earnings call. But he added: "We'll keep our options open, since we have shown great skill in coming up with tradeshow ideas over the years."

Meckler, the Internet World founder who sold Mecklermedia to Penton Media for $274 million in 2001, said in an interview that association shows have a bright future, but for-profit shows are a challenge to launch. "The right vertical show can work, but you have to try a lot of them to get a winner," he said.

This is its seventh acquisition for the publicly traded Incisive, formed in 2000 with the acquisition of Timothy Benn Publishing. Incisive CEO Tim Weller in a statement described the portfolio as "a high-margin business with robust core earnings."

With the $200 million acquisition of seven online photography companies since 2003, online images in the second quarter generated $31.9 million revenue for Jupitermedia, more than triple the $8.2 million produced during the first half of last year.

Revenue growth for Jupitermedia's events, however, has been lackluster. The series of regional emerging technology events reached a revenue peak of $9.9 million last year. But the unit experienced years of losses before recording a $1.4 million profit in 2004.

Primedia's business properties have also recently recovered after a decline. The unit recorded 12 quarters of revenue declines before rebounding more than a year ago.

Among the 20 Jupitermedia shows planned for 2004 were events dedicated to content management, digital rights management, instant messaging, plug-ins, search engines, service management and Wi-Fi. SES, whose most recent incarnation featured 100 exhibitors, was the only brand to take off.

Jupitermedia had planned to hold 10 search engine events this year in Atlanta, Chicago, London, New York, Paris, the Silicon Valley, Tokyo and Toronto, as well as Munich, Germany, and Stockholm, Sweden. Jupitermedia staff will continue to oversee the events for one year.

There was no word, however, on Wasserstein's plans for Primedia Business Information staff and management.

In an unrelated transaction, the Travel Industry Assn. of America acquired The Travel Commerce Conference & Expo, an e-commerce event that JD Events has owned for four years. The 2005 show drew 1,500 attendees and featured a 5,500 sq. ft. showfloor. The TIA already produces several events, among them the Intl. Pow Wow, which draws more than 1,500 tour operators to visit 1,000 travel organizations; and two smaller events, the Educational Seminar for Tourism Organizations and the Marketing Outlook Forum.

Cathy Keefe, TIA spokeswoman, said the e-commerce travel event will help the association service existing members and attract new ones. "This is a way for us to take advantage of this emerging market. It was the right place at the right time," she noted.