RV Shows Drive Scant M&A Action

What a difference a year makes, what with credit crunches, nervous investors and economic downturns to deal with.

In April of 2007, Veronis Suhler Stevenson paid $1.4 billion for Advanstar Communications, and Reed Exhibitions scooped up Alcantara Machado, the biggest tradeshow organizer in Brazil with 26 shows. Those were just two of some 20 deals involving the tradeshow industry in last year's second quarter.

And this year? Tradeshow Week has tracked 13 deals so far this quarter, most involving just one show being added to a portfolio or one small company buying another one.

According to Nick Curci, president of Corporate Solutions, no one should expect M&A activity to pick up any time soon either.

“We will see several small deals close during this period, but they will not be headline-type deals,” Curci said.

The end of April through the end of May, in particular, was slow. The week following Memorial Day weekend though, the market seemed to get a spark of life.

In fact, there were a couple of the headline-type deals Curci referred to announced June 12, both involving Affinity Events.

The media company that primarily serves the recreational vehicle and boating industries acquired 12 consumer shows from two companies, marking its eighth exhibition-related acquisition in the past four years and giving it a portfolio of 45 consumer shows.

Affinity acquired nine shows from MAC Events that are produced in Providence, R.I.; Edison and Atlantic City, N.J.; and Richmond, Va. In the second deal, it acquired three shows from Mid-America Expositions, all produced in the Kansas City, Mo., area.

Affinity Events is owned by Affinity Group, which, besides the consumer shows, has 40 print publications, 53 Web sites and five RV and outdoor recreation clubs, including the Good Sam RV owners club with close to 1 million members.

“In the media world, everybody talks about building community,” said Affinity Events President Steve Hedlund. “By getting more aggressively into the show business, we're really tapping into the RV community.”

In another deal reported May 27, consumer show organizer RJ Promotions snatched up the Shreveport (La.) Hunter's Expo from James Nelson for its portfolio of outdoor-oriented shows.

Hedlund said he and his company are unfazed by either the current high energy costs or the tight lending environment.

Referring to the potential impact of high gas prices on RV users, Hedlund said, “Of course, it's a bit of a soft year, but as we work through the general economic issues, this industry will remain strong.”

As for the so-called credit crunch, he said, “We're a privately held company, and our financial resources are quite sound.”

Hedlund said he planned to continue his acquisition strategy of targeting local RV, boat and powersports show organizers with anywhere from one to five shows in their portfolios.

Curci said, “There is a huge tax incentive for smaller show organizers to sell their business before the end of this year, since it is likely that the capital gains tax rate will increase substantially next year.”

The two deals were Affinity's first since March 2007 when it acquired five outdoor-related shows in Colorado and Kansas from Industrial Expositions. At the same time, it bought a boat show from MAC Events, one of the companies involved in the recent acquisition.

Hedlund said, as his company continues to collect consumer shows, the benefits of cross-selling among its media properties becomes easier and easier.

“The magic for us is to leverage all our media assets and to aggregate all the RV shows into sponsorship packages,” he said.

One of those sponsorship packages he referred to has gone to Barclaycard U.S., which offers co-branded credit cards to RV and boat owners.

“Affinity is providing us with another marketing channel where we can communicate face-to-face with potential customers,” said Matt Massaua, senior director of strategic alliance and partnerships at Barclaycard U.S.

According to RJ Promotions, it will move the Shreveport Hunter's Expo to the Shreveport Convention Center, which CEO Kevin Hummer said was a “much larger and newer facility,” from the Bossier Civic Center in Bossier City, La. The Hunter's Expo, which will be held July 25-28, focuses solely on the hunter, unlike several other broader shows RJ Promotions owns.