Emerald Expositions Inc. functions like a modern-day matchmaker, setting the mood and bringing interested parties under one roof.
A successful courtship means key players sign on the dotted line—and truckloads of merchandise make it to stores just in time for spring.
The San Juan Capistrano-based trade show producer had a whirlwind 2013, going independent under private equity about midyear. It closed out the calendar with a $335 million acquisition of White Plains N.Y.-based George Little Management LLC, which boosted its portfolio to 85 trade shows. The combined operations now put 335,000 buyers and sellers together and bring in close to $300 million in revenue.
“There was tremendous amount of change in one year,” said David Loechner, Emerald’s chief executive.
The activity started in May, when Toronto-based private equity firm Onex Corp. purchased the trade show unit of Nielsen Holdings NV for $950 million and renamed it Emerald—the latest name in a long history (see sidebar, this page).
Loechner said the change in ownership was a “carve out,” with Nielsen determined to focus on its better-known rating service that tracks what consumers watch and buy. It used proceeds from the sale to acquire Arbitron Inc., a Columbia, Md.-based radio ratings company.
“Carve Out”
The “carve out” also meant that the former trade show division, which had been known as Nielsen Expositions and headed by Loechner, would continue as a stand-alone company with headquarters in San Juan Capistrano and offices in Los Angeles, New York and Atlanta.
Emerald was poised to “live and die on our own decision-making as a business,” Loechner said.
The company took on new costs, developing its own accounting, finance and human resource departments, all functions previously handled by Nielsen.
Emerald’s new owner, however, supported its vision of expansion.
The company was “never handicapped under Nielsen,” Loechner said, but it wasn’t top of mind for its Netherlands-based parent.
Onex has approximately $16 billion in assets under management spread across businesses that generate annual revenue of $34 billion and employ approximately 229,000 people worldwide.
“It feels great,” he said. “Nielsen had only so much money in their acquisition funds, and most of their acquisitions were (geared) toward strategy of their consumer-facing businesses. Onex will provide whatever financing and funding that advances our strategic position toward developing our business in terms of trade shows. It’s almost an exclusive focus. … We were the smaller part of the overall Nielsen business, and we are very critical and extremely important to Onex.”
Onex
Emerald pursued its expansion goals right after the close of the sale with Onex. Onex provided nearly half of the funds to acquire George Little Management in December, while Emerald financed the balance.
The acquisition added 135 employees to Emerald’s roster of 243 and five new offices, which will remain open. However, the George Little brand will be folded under the Emerald name, and the company is managed as a whole from San Juan Capistrano.
The deal will “broaden, diversify and strengthen what we already do,” Loechner said.
George Little, considered a “bolt-on” acquisition, holds trade shows in four out of nine segments that Emerald operates in—jewelry, sports, general merchandise and design. It brings an East Coast stronghold to the operation, and the two outfits hit distinct price segments, keeping overlap to a minimum.
Other differences also help: Emerald also serves in fields such as healthcare, decorated apparel and others. George Little adds e-commerce to the mix.
The purchase boosts Emerald’s annual revenue by about 50%, according to Phil Evans, Emerald’s chief financial officer, with a base of $300 million as it headed into this year.
Market Share
Emerald has roughly 8% of the domestic trade show market share. Adding George Little’s 20 events to its roster “won’t even move the needle,” Loechner said, since there are close to 8,000 trade shows held in U.S. each year.
That’s OK, because Emerald has another measure in mind.
“Our strength is not measured by our market share [but by] our impact in the industries that we operate,” he said. “We probably have a dominant market share, close to 100%, in the industries where we work. In camping, hiking, backpacking—there are no other trade shows on (the) B2B level in the U.S. that focus on the outdoor industry” or the photography industry as well.
Emerald’s expansion strategy also includes focus on organic growth, Loechner said.
The goal is to expand existing trade shows or add regional offshoots. For example: It is adding more video offerings to its PhotoPlus International Conference and Expo in New York, which traditionally catered to still photographers.
A new regional trade show—its sixth—for imprinted and decorated sportswear is in the works for Nashville.
Emerald plans to grow its general merchandise trade shows, such as ASDLV in Las Vegas, which largely centers on marketing discount merchandise sold at 99-cent-type stores.
“Value-based shopping is a great consumer trend that has carried a long time, and it’s expanding and has expanded through (the) recession,” Loechner said. “It represented 30% of our revenue” before the George Little deal.
The company also is looking for ways to remain relevant as the Internet advances how buyers and sellers exchange their business information.
Technology
That’s why Emerald has embraced the technology to enhance the face-to-face experience at trade shows.
“We don’t get to do these [trade shows] because we’ve done them—we get to do these businesses because we are effective for our customers,” Loechner said. “Buyers are very sophisticated—they don’t just walk in the door and start on the left side and walk all around. Today we have digital tools and websites to enable that buyer to prepare and communicate with the exhibitor base prior to the trade show. They set up appointments, preview lines. So if we can make (the) buyer’s time more efficient, they’ll get more done. That creates more value for that buyer, and for that buyer to want to come back more often.”
