M&A Market Takes a Break

It should come as no surprise that, in today's tough economy, both the number of business-to-business media deals completed in the first half of this year and their values have dropped, compared with the same six-month period last year.

According to The Jordan, Edmiston Group Inc.'s M&A overview for the first half of 2008, the value of transactions in the overall B-to-B market plunged nearly 65 percent to $23.2 billion, compared with more than $65 billion in 2007.

The tradeshow element of the B-to-B world, however, seems to be doing a bit better. In the exhibition and conference sector specifically, as tracked by JEGI, first-half deal value also fell, but by a significantly smaller margin – down to $447 million in the first six months of this year, compared with $515 million last year, a 13-percent drop.

“Events businesses are consistent performers with strong cash flow, limited (capital expenditure) and considerable opportunity for online lead generation,” said Richard Mead, JEGI's managing director.

But to put the market into perspective, he added, there aren't a lot of shows or related companies available anyway. “The majority of events businesses by number are owned by associations or entrepreneurs, and these tend to be smaller transactions,” Mead said. “There is a steady flow of these coming to the M&A market, and this has been consistent over the last 10 years, come rain or shine.”

Last year's mega deal – Veronis Suhler Stevenson's $1.4 billion acquisition of Advanstar Communications – squeaked through before the subprime mortgage crisis reared its ugly head. By the beginning of this year, the reality that there wasn't going to be a quick fix to the economic slowdown sank in and, even when VSS stepped up to the plate and bought another B-to-B media company, U.K.-based Clarion Events, it was one of the few deals of any size so far this year.

The second quarter started off so slowly that the first deal, as tracked by Tradeshow Week, didn't take place until April 18 when Milwaukee-based private equity firm Lakeview Equity Partners acquired a majority interest in Chicago-based Travel Technology Group, a provider of housing registration services.

Some of the usual M&A players, United Business Media and Canon Communications, purchased smaller niche events. Consumer show organizers Affinity Events and RJ Promotions were the only ones to make multishow buys. Suppliers were slightly more active with acquisitions of other companies designed to expand their core businesses.

According to Nick Curci, president of Corporate Solutions, the market probably won't get any busier any time soon. “I expect the M&A market for tradeshows will continue to be relatively slow for the remainder of this year,” he said, “and hopefully pick back up again in the first quarter of 2009.”

April 18: Lakeview Equity Partners, a Milwaukee-based private equity firm, buys the majority interest in Chicago-based Travel Technology Group, which provides housing services for more than 200 events worldwide. “Travel Tech is an attractive company because of its profitability and growth potential, but also because of the resoundingly positive feedback we received from its stakeholders, both internal and external,” said W. Kent Velde, president of Lakeview. “We are looking forward to working with Travel Tech's leadership team and to supporting the company's future innovations.” TTG co-founders Tom Baur and Bob Derham will retain a significant minority interest in the company, according to Lakeview. TTG's senior management team also is expected to remain in place. “This new partnership allows us to expand our business and invest more in our people, while remaining true to the clients who have paved the way for our current success,” Derham said.

April 21: St. Louis-based Conference Technologies purchases another local audiovisual company, VMI. Most of VMI's technical staff and the owner's son, David Rauth Jr., have joined Conference Technologies. “We're making a commitment to support VMI's customer base so they don't feel the pain of losing another long-term partner,” CTI COO John Laughlin said. CTI has more than 250 clients, including Anheuser-Busch, Boeing, AG Edwards/Wachovia and Monsanto.

April 23: Reed Exhibitions acquires the Middle East Ocean Science & Technology Expo from Turret Middle East, a company based in Abu Dhabi, United Arab Emirates. The show, launched in January, adds to Reed Exhibitions' portfolio in the U.A.E. that already includes Aluminum Dubai, Middle East Pool & Spa Exhibition and Arabian Travel Market. Val Johnston-Jones, industry director of Reed Exhibitions Energy & Marine Group, said of the buy: “We are delighted to have the opportunity to acquire MEOST as the rapid development in the Middle East is creating some exciting opportunities for the application of marine science and ocean technology.”

April 29: U.K.-based ITE Group buys Siberian Fair, an exhibitions business based in Novosibirsk, Siberia, for $12.1 million. Siberian Fair owns 30 exhibitions in the Novosibirsk region in construction, agriculture and food products and manufacturing. “This acquisition, which complements our current activities in Russia, is the first major step in ITE's plans to expand its regional exhibitions in Russia,” said Russell Taylor, ITE's CEO.

May 1: Even with a depressed building market, Hanley Wood keeps moving forward, this time scooping up The TFM Show, a show for senior facility managers, from Group C Communications. The TFM Show, last held April 22-24 at Chicago's Navy Pier, will be collocated with Hanley Wood's Construct event June 17-19 at the Indiana Convention Center in Indianapolis. “We are excited to add this event to our portfolio,” said Galen Poss, president of Hanley Wood Exhibitions. “As we continue to expand our reach to facility managers, it's a logical fit and blends well with our Construct event, its audience and extensive educational offerings.” Tom Cindric, Construct's show director, added, “We surveyed current TFM Show attendees and exhibitors about a collocation, and the positive results supported our decision to move forward with the acquisition.”

May 1: Tulsa, Okla.-based PennWell purchases U.K.-based Avionics Expo, which produces Avionics, a global conference and exhibition for civil and military aerospace electronics. Established in 2003 as an annual event, Avionics was held in Amsterdam for the past four years and is scheduled March 4-5 at the Passenger Air Terminal there. PennWell will manage Avionics from its London office, retaining the show's founder, Adrian Broadbent, as a consultant. “Avionics has become the premier platform for the global aviation industry to learn, network, source new partners and generally do business,” said Robert Biolchini, PennWell president and CEO. The acquisition of Avionics is compelling, he added, because of its 30- to 50-percent growth each year.

May 6: Canon Communications buys Stamping-Days, a biennial exhibition that serves the high precision stamping technology industry in Germany, from founder Orlich Brosz. The show will move from its current location in Pforzeim to nearby Karlsruhe where it will be collocated with Canon's Interpart, Surfacts and MediPart tradeshows. “We are very excited about the addition of Stamping-Days to the Canon family of advanced manufacturing exhibitions,” said Mark Temple-Smith, Canon's event director for Europe and Asia. Brosz will continue to work on Stamping-Days with Canon.

May 26: Toronto-based Exposoft Solutions purchases Convention Information Systems (CisTems) and will open an Exposoft office in Alexandria, Va. “We've been waiting to carefully pick the right opportunity to have a presence in the Washington area, and we feel strongly that Richard Melliand and CisTems will provide excellent representation for the Exposoft brand,” said Bassel Annab, president and CEO of Exposoft. “We see the D.C. area as a complex corporate and association corridor that could benefit from Exposoft Solutions' myriad services.” Melliand will serve as director of development in the new office.

May 27: RJ Promotions snags another consumer show, Shreveport Hunter's Expo, for its portfolio from James Nelson. Nelson held the expo at the Bossier (La.) Civic Center the past 10 years, but RJ Promotions will move it to the Shreveport (La.) Convention Center. “With Shreveport being in the heart of Sportsman's Paradise, a show dedicated to the hunting enthusiast just makes sense,” said Kevin Hummer, RJ Promotions' CEO. With the addition of the Hunter's Expo, RJ Promotions now manages four shows each year at the Shreveport CC: the Northwest Home Remodeling and Decorating Show, Tri-State RV & Camping Show, Northwest Louisiana Home & Landscaping Show and now Shreveport Hunter's Expo.

May 29: Reed Elsevier, the parent company of Reed Exhibitions and Tradeshow Week, sells the three remaining defense tradeshows in its portfolio – DSEi (Defense Systems and Equipment Intl.), ITEC and LAAD (Latin American Aero and Defense) – to U.K.-based Clarion Events. Last year, Reed Elsevier announced its intention to sell its five defense shows and exit the sector.

June 2: United Business Media's TechInsights acquires U.K.-based Embedded Systems Show from EDA Exhibitions. Andrew Porter, former events director at EDA, will assume the position of director of events for Europe and the Middle East for TechInsights. “I am delighted that EDA Exhibitions was acquired by such a highly esteemed market leader as TechInsights,” Porter said. “I am greatly looking forward to working with my colleagues, new and old, to achieve renewed growth and development of the existing and newly launched events.”

June 9: Affinity Events purchases 12 consumer RV and boating shows in two different deals, nine from MAC Events and three from Mid-America Expositions. The acquisitions give Affinity a portfolio of 45 consumer shows with a total audience that exceeds 500,000, according to the company. “This company is amazing in ways it reaches its base of enthusiast customers,” said Steve Hedlund, president of Affinity Events. “When you bring vendors, enthusiasts and field experts together in a face-to-face meeting, magic happens.”

June 14: The Northern Intl. Livestock Exposition Stock Show, ProRodeo & Horse Extravaganza buys the Montana Agri-Trade Exposition and its subsidiary shows from Jerry Hanson. The MATE show is the largest agricultural event in Montana, held annually during the second week of February. “The NILE board of directors felt this was a great opportunity and good fit for the NILE that offered us more diversity,” NILE President Gary Adams said.