London, UK –Following weeks of speculation that UBM plc was poised to acquire U.S. show organizer Advanstar Communications, the deal has been sealed. UBM plc today announced it has reached an agreement to acquire the Los Angeles-based company for $972 million.
The cash transaction combines two show organizers with significant positions in the fashion sector worldwide. The deal is expected to close in November pending approval by the UBM board of directors, UBM said.
The deal will vault UBM into the top position among U.S. show organizers, based on 2013 revenues, UBM said.
“UBM will become the largest events organizer in the U.S., which is the biggest events market in the world,” said Tim Cobbold, CEO of UBM. “This is a great acquisition for UBM and its shareholders. In addition to being financially attractive, it strengthens UBM’s core events business while balancing and complimenting UBM’s strong events portfolios in emerging markets.”
Advanstar CEO Joe Loggia will remain at the helm of the Santa Monica-based company and report to Cobbold during an unspecified transition period. There was no word in UBM’s announcement about staffing or imminent changes to the Advanstar portfolio.
Advanstar has been owned by a private-equity group led by Veronis Suhler Stevenson since 2007. Its flagship show is the semi-annual MAGIC Market in Las Vegas, which will be added to the UBM fashion portfolio centered in Asia.
Rumors of the sale were widespread in recent weeks and mentioned in mainstream media like the New York Times, Wall Street Journal, the Economist, Reuters and Reuters UK – a somewhat rare scenario for trade show-related mergers and acquisitions.
UBM Recently Reorganized U.S Operations
The news follows just weeks after UBM consolidated its events-led marketing service businesses in North and South America into a single organization, UBM Americas. When the consolidation was announced, Cobbold said the deal would help events-led marketing services businesses in the U.S. grow to their potential.
The acquisition of Advanstar appears to be a step toward that goal. It gives UBM the Advanstar portfolio of 54 trade shows, 100 conferences and other media products within the fashion, licensing, life sciences and power sports sectors. UBM listed 61 U.S. trade shows and conferences on its website prior to the acquisition.
An Acquisition Spree
UBM has been on an acquisition spree of late. In May, the company acquired CIHAC, Mexico’s largest construction show and one of the 10 largest shows in Mexico. In June, it acquired Seatrade Communications, a British company that produces events and publications in the cruise and maritime sectors. Seatrade has offices in China, Singapore and Dubai and organizes business-to-business events and conferences.
“The acquisition roughly doubles the size of UBM’s U.S. portfolio,” said SISO President Lew Shomer. Nielsen Exhibitions (now Emerald Exhibitions), last year sold for a similar amount and was a similar size to Advanstar.
UBM is among the largest show organizers in the world with more than 400 events in 30 nations, including a strong presence in Asia.
The Advanstar portfolio includes three shows that will be honored next month at Trade Show Executive’s Gold 100 as the largest shows of 2013, based on net square feet. Those shows are MAGIC-August, MAGIC-February and Licensing Expo. The three shows spanned a total of 2,167,561 nsf of space.
UBM itself has one show among the Gold 100 under the UBM Canon division: the Medical Device & Manufacturing West show. The four shows in the combined company sold 2,543,271 nsf of exhibit space.
With the acquisition, UBM will be in third place among the Gold 100 shows for combined nsf used in 2013, according to the latest Gold 100 data. Reed Exhibitions, with seven shows on the Gold 100 list, had a total of 2,880,365 nsf used for those shows, while Emerald Exhibitions ranks No. 1 based on total nsf used, with 3,045,901 nsf across seven shows on the Gold 100 list.
Shomer called the UBM acquisition “a brave statement for a CEO who has been on board less than a year,” referring to Tim Cobbold, a former manufacturing industry executive who replaced David Levin as CEO of UBM last February.
While Advanstar and its private equity owners had remained mum about the pending deal, UBM plc on September 17 posted notice on its corporate website acknowledging it was involved in discussions to purchase the company. Some analysts had predicted that UBM might need to raise $440 million in capital to make the deal happen—roughly the value of the company’s PR Newswire division.