Telecom Providers Team Up in Vegas

No. 1 venue telecom provider buys out its closest competitor

By Heidi Genoist -- Tradeshow Week, 8/28/2006

Las Vegas—The No. 1 tradeshow-industry Internet and telecommunications provider, Smart City, has bought No. 2, Priority Networks, from Priority founders Terry Funk and Ben Talley for an undisclosed sum.

Together, Smart City and Priority will employ 550 people and provide service at 50 convention and event centers in the United States. Smart City President Paul Ashley estimated the combined company's revenue will be in the range of $45 million to $50 million annually.

Smart City is a privately held limited partnership of "several individuals that I'm not free to state," Ashley said. Funk will work with Ashley through the transition, then Funk and Talley are expected to leave the business.

Priority Networks will maintain its name and continue its daily operations as before. President Dan Poirier will report to Ashley.

So, what does the acquisition change?

Upper management, for one thing. Ten positions in human resources, finance and other non-operations divisions were eliminated, according to Ashley. The companies are hoping they can gain efficiency by combining administrative functions and overhead.

"We think we can run the two companies under the same umbrella more efficiently, resulting in a better bottom line," said Poirier.

Both Smart City and Priority have their headquarters in Las Vegas. "We may consolidate some office space," Ashley said. "That's yet to be determined."

It could be a challenge for two companies that have been fierce competitors, even "sworn enemies," as Ashley joked.

But, he added, "I don't think it will be difficult. It will be my job to make sure the cultures come together. We recognize the tremendous opportunity we have, and the employees recognize the opportunity this creates for them too."

Poirier agreed, recalling facility management firm SMG's acquisition of feisty runner-up LMI several years ago when he worked for SMG: "At that time, I was with the big guy. We thought it would be tough, but it really wasn't." Besides, he said, "We have some former Smart City employees working for us now. You just have to make that transition, and do what's right for the business and the industry."

Poirier said that Smart City approached Priority in March. The first couple of months of negotiations presented some challenges, but "once the corporate information was divulged, we moved forward. The last couple months were quite smooth."

Ashley and Poirier's combined goal for the next few months is to complete the transition and begin implementing consistency across the Smart City-Priority spectrum of clients.

Both parties acknowledged that each has strengths and weaknesses. "We want to apply the best procedures across the board," Ashley said.

Asked whether the merger would eliminate Priority's independent attitude — reflected in competitive pricing and hands-on service, both strong selling points up to now — Poirier said no. "At this point, I don't see a lot changing on that end. I'd like to assure our customers that we'll keep things where they are," he said.

So, who will be the scrappy up-and-comer now? The next-largest communications technology provider is probably Seattle-based Convention Communication Provisioners, which provides service at 11 convention and event centers. They include the Kentucky Exposition Center, the seventh largest exhibit hall in the country, and Indiana Convention Center & RCA Dome, the 30th largest, according to Tradeshow Week research.