Steve Monnington, CEO of acquisition broker Mayfield Media Strategies talks to CEO of Diversified Communications Ted Wirth and MD of Diversified Communications Asia Matt Pearce about the organiser’s continuing expansion.
ver the years I have talked to a number of US organisers who are interested in taking their brands overseas, but it rarely seems to develop into anything. However, when it comes to consistently
developing new overseas markets, Diversified Communications stands out as the exception.
Diversified Communications is a privately held, family-owned US business serving the broadcasting, exhibition, publishing and emerging media industries, producing more than 130 events worldwide. The key sectors are seafood, food service, organic, healthcare, commercial marine and business management. The steady internationalisation of its exhibition business was initially driven by Nancy Hasselback, who retired as CEO in 2013 after 33 years with the company.
Hasselback spearheaded the rapid growth of the company, which produced four trade shows and three magazines in 1993. Since then, Diversified has launched and acquired more than 90 products and established new divisions in Australia, Hong Kong, India, Thailand, Singapore, the United Kingdom,
Canada and the US, resulting in a 300 per cent increase in revenue since 2003.
When Hasselback retired, Ted Wirth (previously VP of business development) succeeded her as CEO and Matt Pearce, MD of Diversified Communications Asia, took on an expanded role in international business development.
First-off, I asked Wirth why a private family- owned company, with no need to drive share price or satisfy outside investors, would take the hard route towards the establishment of businesses often in difficult territories and with unsociable time differences. “Maybe we are different from other US organisers but we have never been scared of working outside our home markets,” Wirth explains. “We saw a business model of autonomous global divisions that would provide a strong, long term ROI and allow us to diversify the markets in which we do business and the strategy has paid off with 27 per cent of Diversified’s total exhibition business coming from outside North America.”
The acquisitions are not exclusively outside the USA in fact far from it. At the end of 2011 the organiser acquired Pri-med – a series of more than 25 medical educational conferences focusing on primary care. Pri-med has an interesting history, having been developed by John Mooney and sold to Bain Capital in 2004 for a reported US$400m. Mooney had left some years after the sale and the business declined. Diversified saw an opportunity and acquired the business in partnership with Mooney (in place as the new CEO) and his team at a fraction of the price. Wirth is clear about the future of Pri-med.
“John and his team have done an amazing job bringing the value of the brand back to life, but the future we see for the healthcare division is much different from its past; less didactic teaching and more interactive and online learning. We are also looking for ways to help the industry improve care and reduce waste and fraud. Our goal is a worthy one: better patient outcomes.”
Another acquisition from US Private Equity followed in 2013 when Diversified purchased the Institute of Finance and Management from Greenhaven Partners. The portfolio includes the Accounts Payable Conference and Expo, together with a number of publications and websites targeted at corporate financial management. Wirth explains the logic: “This was a new entry into this area. We liked the industry because there is constant change: both in technology and regulations.” he says.
“We also liked the person who was coming with the product, RD Whitney. His energy and passion have been a driving force behind the success of the acquisition.”
Earlier this year the company added further to the sector with the acquisition of The Sleeter Group, a series of media properties aimed at the accountants and consultants who serve small businesses, including the Accounting Solutions conference. The business management portfolio now consists of five events and three other media platforms. I asked Wirth why Diversified likes this sector given that it consists of a larger number of small events.
“We like this sector because the constant change in technology and regulations makes our content not just valuable but required if you need to meet the most recent regulations,” he says. “Beyond our events, this need allows us to do more business with our customers year-round with webinars, whitepapers, publications, newsletters and so on.”
Although the flagship USA show is the International Workboat Show, the largest event in the portfolio is actually the Global Seafood Exposition and Seafood Processing Europe in Belgium, which has been running since 1993, managed directly from the US office as part of the global Seafood brand that encompasses events in USA, Europe and Asia.
The rest of the European business is run from Diversified’s UK office and through a combination of acquisition and launch has been developed into a portfolio of 18 events. The cornerstone of the UK business is Natural and Organic Products Europe and Cam Expo (complementary and natural healthcare) launched more than 15 years ago.
The UK acquisitions have been primarily small single shows acquired from the founders across a number of diverse sectors. In 2011, the company acquired the Service Desk and IT Support show from VCM, followed in 2013 by the acquisition of Intelligent Exhibitions comprising the Ocean Business exhibition together with two specialised conferences for the light detection and ranging (LiDAR) sector; the International LiDAR Mapping Forum and the European LiDAR Mapping Forum. The most recent UK acquisition was Expo Management, organiser of Euro Bus Expo, Coach and Bus Live, and Best of Britain & Ireland together with trade magazines – Route One and Coach Monthly.
Given the diversity of sectors, I asked Pearce what the strategy was for the development of the UK business and how they targeted their acquisitions? “Carsten Holm, our UK MD, took a deliberate strategy of launching and, latterly, acquiring shows that others would deem too niche and then grow them. Lunch, Office, Casual Dining and the recent launch of Commercial Kitchen are examples of this,” he comments. “The recent acquisitions ultimately stemmed from the fact that Carsten created a fantastic market position for us and now we are capitalising on that, but being able to work with teams that have joined us as part of an acquisition and find our approach refreshing and fun.”
The other main business unit besides USA, Canada and UK is Australia, where Pearce lives. The Australian business started with the acquisition of Australian Exhibition Services from Montgomery in 2000 and has grown to 20 trade and consumer shows. In 2007 it acquired the Oil and Gas show. In 2009 Diversified acquired DMG’s Australian business, which brought them FoodPro; Australia’s largest food processing show.
Since then the company has acquired Total Facilities Expo from National Media and most recently, the Brisbane Fitness and Health Expo. I asked Pearce about the challenges of developing a business in a small and self-contained market such as Australia with minimal acquisition opportunities.
“Australia is a small market in world terms but we are a large player in this market,” he says. “Over time we have acquired much of what we want to acquire and there isn’t too much left.
So we have focused more on start-ups that have a good idea and we talk to them far earlier than would be the case in larger markets. We are happy to back an idea if we think we could take it from a small show into something more substantial.”
ACQUISITION TRAIL
and Pearce is also responsible for this business. It started with Hong Kong in 2009 with the acquisitions of Hong Kong Restaurant and Bar show and Retail Asia, and these events remain the flagships shows. The Hong Kong business now has a portfolio of eight events including a brand extension of Natural and Organic Products. However Pearce hasn’t used Hong Kong as a springboard to develop a business in China.
“Initially we saw Hong Kong as the opportunity to get into China, but it became quickly apparent that if you want to be in China, then you have to be in China. We have run our eyes over a range of opportunities there, but have yet to see something that makes us say ‘yes, here we go!’,” he says.
Instead, Pearce has concentrated on some of the friendlier ASEAN markets where English is freely spoken. At the beginning of 2014 the organiser made its first move into Thailand with the acquisition of 51 per cent of Kavin Intertrade – an independent organiser with a portfolio of shows in franchise, retail, food and hospitality, and travel. “We favoured Thailand for its developed economy and position as the potential hub for Southeast Asia,” he tells me. “We will be bringing some of our international events in to the market so having a local organiser with an international perspective was important.”
Diversified rounded off the year by opening an office in Singapore with the acquisition of HRM Asia, a series of events dedicated to human resource management including Asia’s largest human resource congress. “Singapore is a great hub for business services and as we develop our suite of products within business services, it made sense to have a business with a solid offering of events, online and editorially driven publications in the region,” comments Pearce.
All of this development activity has contributed to a business that now employs more than 840 people worldwide. From my mergers and acquisitions broker perspective, Diversified is very considered when it comes to acquisitions – it is clear about the what works for the company and what doesn’t, where it wants to go and where the no-go areas are. However, even with this careful approach it has still cast its net wide and lived up to its name in terms of the varied portfolio it has created.
I asked Wirth for a final word about what we might expect in the next couple of years. “We manage our business to drive steady, consistent growth with our existing products and, with that in hand, we challenge our talented staff to find new opportunities. It is a model and mindset that has served us well in the past, and hopefully into the future,” he says.
