San Juan Capistrano-based Emerald Expositions LLC spent nearly $190 million since early 2015 on a dozen acquisitions, according to the initial public offering it filed with the Securities and Exchange Commission on March 31.
Recent purchases include the $36 million it paid in January for the CEDIA trade show, and $14.2 million in August for the Swim Collective and the Active Collective trade shows, which are held twice a year in Huntington Beach.
The deals—including four in 2015 and six last year—follow Emerald’s $335 million buy in 2014 of White Plains N.Y.-based trade show operator George Little Management LLC and bring its three-year spending spree to about $530 million.
IPO
The tradeshow and events operator applied for listing on the New York Stock Exchange as Emerald Expositions Events Inc. under the symbol EEX. The offering’s main underwriters are BofA Merrill Lynch, Barclays Capital Inc. and Goldman, Sachs & Co.
The IPO was apparently the second choice for Emerald’s owner, Toronto-based private equity firm Onex Corp., which purchased it in 2013 from Nielsen Holdings NV for $948.7 million. Onex has $24 billion in assets, and was exploring the sale of Emerald for about $2 billion but likely didn’t get an acceptable offer, according to a Reuters report.
Emerald Chief Executive and President David Loechner in an interview with the Business Journal late last year hinted at the possibility that Emerald may become an acquisition target or “potentially an attractive public company someday.”
“Onex has been a great partner of ours,” Loechner said at the time. “What the eventual exit for them will be at some point will be completely up to them. In my 30-plus years here, we’ve had six different owners.”
The plan is that Loechner and Chief Financial Officer Philip Evans will stay with the company and keep their roles and that Onex will retain majority ownership. Emerald, which has $713.3 million in debt, said it will use IPO proceeds to pay down its loans and for working capital.
Emerald didn’t specify financial terms of the IPO in its filing with the SEC, except for the $100 million figure, which is a placeholder used to calculate registration fees and is subject to change.
The company earned $22.2 million on $323.7 million in sales last year, 92% of that from its 50 trade shows and 70 events. It generated the rest from “other marketing services, including digital media and print publications that complement our event properties in the industry sectors we serve.”
Its trade shows and events—“all profitable”—last year occupied about 6.5 million square feet of exhibition space and hosted 500,000 global attendees.
Road Ahead
The company, which employs 420, 90 of them at its San Juan Capistrano headquarters, and has 10 offices, is one of about 9,400 U.S. trade show operators, an industry with an “estimated size in excess of $13.5 billion in revenue,” Emerald said in the filing.
Together with U.K.-based competitors Reed Exhibitions, UBM PLC and Informa Exhibitions, it accounts for 9% of domestic market share.
Emerald plans to “continue to make accretive acquisitions” and “will focus on expanding our presence within sectors we currently serve, as well as on establishing a leading presence in sectors that have strong underlying growth potential such as technology,” according to SEC documents.
It also wants to create new shows and new categories within existing ones—last year Emerald developed four events and has several in the pipeline for this year.
All are hosted in the U.S., though it may also “launch, partner with or acquire international trade shows that are complementary to our core business and could represent a substantial growth opportunity.”
