SMG Gets New Owner, Old VP

SMG has a new owner and a new — albeit very familiar — senior vice president. The long-anticipated sale of SMG by American Capital closed June 14. A day later the company announced its former vice president of operations and business development, Gregg Caren, would be returning, this time with the title of senior vice president of strategic business development.

Caren left SMG 10 months ago to become vice president of hotel sales at the three Trump Entertainment Resorts properties in Atlantic City. Caren, who confirmed the deal in which American Capital bought the venue management company, said his return to SMG was directly related to the sale.

"It afforded (SMG President and CEO) Wes Westley the opportunity to invite me back at a higher level and to take to a new level what we had started before," he said. "American Capital has given Wes more latitude to do more things."

Bethesda, Md.-based American Capital has an $8.76 billion portfolio with investments in 138 companies.

"They buy mid-market companies that have attractive valuations and solid cash flow," said David Chiaverini, a stock analyst with BMO Financial Group. "It's purely a financial interest they have in SMG. They're raising a lot of capital, and they're happy to put that money to work."

Sanjay Sakhrani, an analyst with Keefe, Bruyette & Woods, concurred, saying, "I would assume SMG has a lot of cash flow, which makes it a prime target company for American Capital."

Caren said the sale — thought to be for more than $500 million — would allow SMG opportunities that were not available under its previous owners, the Hyatt Corp. and Aramark, which each owned a 50-percent interest in the company.

First, Caren said, he expects an infusion of capital to be available that will allow SMG to pursue even more opportunities than before.

"The game plan is to focus more on content development in finding more ways to bring events into our buildings," Caren said.

Chiaverini agreed it was likely American Capital would help SMG make some investments.

"They will give a company money to work with," he said.

Caren said the possibilities could be anything from simply more market research to even helping show managers or meeting planners launch events.

At the very least, he expects to be able to negotiate deals with show organizers that would accommodate multiple events in more than one venue.

"The other element is that we will much more closely engage our CVB partners and leverage the fact that SMG is the common thread through all these cities," Caren said.

Westley said, "We are committed now, more than ever, to leveraging our ability to develop new content and bookings for the convention centers we manage."

Currently, SMG manages more than 60 convention centers and about 180 facilities altogether, including numerous stadiums, arenas and theaters.

Caren also noted that SMG had previously been restricted by covenants from competing directly with either of its owners, Aramark or Hyatt Hotels.

"We can now go after accounts we couldn't go after before," he said.

Caren said he had enjoyed his time with the Trump properties in Atlantic City, but was also happy to be returning to SMG.

"I walked away from more than I realized I was walking away from," he said.