September 2005
Inside dmg world media
dmg world media’s 12-year growth through acquisitions in strategic markets built the foundation. Four more years
of integration and in-fill produced 300-plus B2B and B2C exhibitions in 25 countries. What’s next?
By Cathy Chatfield-Taylor



Fondly referred to as “The Three Ms” among dmg world media (www.dmgworldmedia.com) insiders, Mike Cooke, Michael Franks and Mark Alcock have quietly collaborated for 16 years to build a worldwide exhibition business nearly from scratch. Britain’s fabulous three are loath to sing their own praises, but one company being acquired by them makes clear their talent.

“They’re not Wall Street investment types. They understand our business,” says Jeff Little, President of White Plains, NY-based George Little Management LLC (GLM, www.glmshows.com), which sold 25 percent of the company to dmg world media in 2000 and will be bought out by them in 2014. “Their mantra is to inspire, enthuse and support, and that is the way they’ve dealt with us.”

A wholly owned subsidiary of the Daily Mail and General Trust plc (DMGT, www.dmgt.co.uk), one of the largest media companies in the United Kingdom, dmg world media got its start rehabilitating one ailing exhibition, the Daily Mail Ideal Home Show in London, then through a series of strategic acquisitions grew to more than 300 trade exhibitions, consumer shows and fairs in 25 countries. Seven business units now manage the events by industry or region from offices in eight countries.

The partners, as the 3Ms refer to themselves, liken their company to a fleet of yachts.

“Most big corporate organizations look like a supertanker — a great big bulk of a company with a few people sitting on the bridge making the decisions and driving the boat,” says Cooke, who serves as CEO. “We’re more like an around-the-world yacht race. Our corporate management team sets the rules, gives the weather reports, and supplies financing and boats. But you’re the captain, and you sail it around the world.”

This decentralized structure has allowed the 3Ms to guide the fleet first from corporate offices in London, then from London and San Francisco where Franks, as Chief Operating Officer, migrated in 2000 to manage acquisitions in Australia and New Zealand. By 2002, 60 percent of dmg world media’s revenues came from North America, so Cooke moved to the Bay area, too. The two persuaded Alcock, their Deputy CEO in charge of the finances, to join them this year.

Now reunited at new global headquarters in San Francisco, which also houses operations for AD:TECH Expositions LLC, the new business unit formed to anchor tech-sector growth, the 3Ms continue to build out the business.

“Mike Cooke is the visionary,” says Franks. “Mark Alcock is there to keep us on the straight and narrow. He’s responsible for making sure we don’t do anything foolish. And my role is to mentor the senior managers who run the business. Between us, we’re a good team.”

Placing cornerstones
It was Alcock who brought this team together. Charged with setting up a media division for DMGT, in 1989 he acquired Trinity Publishing and with it Cooke, whose expertise in exhibition management would help turn around the 80-year-old Ideal Home Show.

Trinity’s portfolio of business-to-business trade shows complemented DMGT’s handful of business-to-consumer shows. Within 18 months, Alcock bought The Publishing Co. for Frank’s knowledge of home interest and antiques markets. This formed the nucleus of DMG Exhibition Group (renamed dmg world media in 1999).

As part of a strategy to lessen DMGT’s dependence on the U.K. economy, DMG embarked on a mission to become international. That meant buying good quality businesses with management teams that would stay on board to captain the boats.

“My fundamental belief is that you need to be close to your customers, you need to be part of their industry, and you need to try to build a market-leading position quickly and provide good quality service,” Cooke says. “The obvious way to build a market-leading position quickly is to acquire businesses in the markets we were in. At the time, we were in very technical, vertical markets and the home interest/consumer market.”

DMG’s first strategic acquisition was the London-based Antiques Trade Gazette in 1993. That industry bible was their entrée into the antiques sector. This led to eventual acquisition of two more publications and more than 100 fairs worldwide, from the Nottinghamshire, U.K.-based Newark International Antiques & Collectors Fair, which covers 64 acres six times a year, to the high-end Palm Beach!, acquired in 2001 and held annually in West Palm Beach, FL.

The first international foray was Redhill, U.K.-based Argus Business Media, acquired in 1995 and renamed DMG Business Media. Argus brought a portfolio of trade shows held worldwide. Today, the wholly owned subsidiary produces 65 publications and 30 exhibitions and conferences for 11 industry sectors. Thanks to the acquisition of Gastech and the European Autumn Gas Conference last fall, dmg business media profits will increase about 50 percent this fiscal year.

Argus held trade shows in North America, but DMG still didn’t have a presence there. It came to America with the 1996 purchase of Southex Exhibitions, headquartered in Don Mills, Ontario, Canada. Southex’s blend of trade and consumer events in a dozen categories fit perfectly with DMG’s market mix.

DMG’s acquisition activity peaked from 1998 to 2000, when it bought 22 more businesses. Index Dubai, acquired in 1998, landed DMG in the main trading port of the Middle East, where it now produces four industry-leading events. Buying Australian Trade Exhibitions, Riddell Exhibition Promotions and XPO Group Ltd. within a six-month period placed DMG squarely in Australasia. And the California Gift Show and Surf Expo, acquired in 1999, introduced DMG to GLM and Western Exhibitors LLC (www.weshows.com), albeit as competitors.

Forming strategic alliances
By this time known as dmg world media, the company entered the retail trade gift industry with little knowledge of the business. Southex ran eight biannual gift shows in four Canadian cities, but the California market was major league. The 80-year-old California Gift Show, held biannually in Los Angeles, had been managed by Atlanta-based AMC, owner of AmericasMart-Atlanta.

“When we bought it, we were experienced trade show organizers. We made pretty simple improvements and significantly improved profitability in the first year or two,” says Franks. “GLM understood the market better. They could take it to another level, where the changes weren’t simply ones of producing a better show, but of producing a better gift show.”

DMG approached both GLM and Western Exhibitors about joining forces. The two had already formed an alliance around Western Exhibitors’ San Francisco International Gift Fair, with GLM managing about 25–30 percent of the event and owning 14.5 percent. Offered a chance to manage the California Gift Show and the Canadian gift shows, GLM took it.

“We have six partners with different outlooks and agendas,” says Little. “We thought at some point we’d look to sell, if we could find a deal. We turned down many offers prior to DMG, but we found in them a partner that appealed to us.”

GLM negotiated a phased buyout that would leave the partners in control of their third-generation, family-owned business for 14 years. They agreed to sell 25 percent of the business in 2000, 51 percent in 2010 and 100 percent in 2014. The long-term exit strategy satisfied both parties.

Western Exhibitors got a shorter deal.

“When they approached us, we said we were a family-run business and really weren’t interested. Plus, we had this arrangement with GLM to give them the first option to buy,” recalls Mike Dean, President of San Francisco-based Western Exhibitors. “Then GLM said they were selling a portion of their business to DMG. That allowed us to reconsider. We decided to model our exit strategy after theirs.”

dmg world media acquired 25 percent of their company in 2001, with the option to buy the balance by 2006 — an option to be exercised at the end of this year.

 “We’ll completely manage the business for two years, after that it will be at their option if we continue,” Dean says. “It all depends on our performance. If we’re able to deliver the bottom line, it would be in their best interest to have us continue.”

Both Little and Dean describe dmg world media’s strategy for integrating their businesses into the portfolio as seamless. As captains of their own boats, they enjoy a friendly relationship with the 3Ms, whose hands-off management style suits them.

Integrating best practices
By 2001, dmg world media had acquired 60 businesses and 60 ways of doing business. It was time to take stock of the company’s mission and values, and start to establish a common culture and business practices.

They began to hold conferences every 18 months with 60–70 senior managers to share ideas. From standardizing financial reporting procedures to articulating a vision focused on customer support, these intensive learning sessions reinforced a culture in which like-minded people can think for themselves.

“When you’re running a business and you have a trade show manager in New Zealand with a problem, I don’t want him phoning me in the middle of the night saying, “OK, what do I do?’,” says Cooke. “We want to have a business where they know instinctively to do what’s right by the customer.”

dmg world media shares best practices not only vertically within industries but also horizontally across functions such as marketing, finance and operations. Franks is a primary conduit.

“My job is to mentor the executive vice presidents and find out the ways they do things that we can share,” he says. “If you talk about creating a common vision, values and culture, you make sure they talk with each other about how they do things, so that good practices spread around the business.”

A good example is the buyer relations program instituted by Southex before it joined the fold. Dedicated staff members called on retailers to find out what they wanted to see at the shows, and what was missing from the shows. dmg world media propagated that practice throughout its trade show businesses by inviting the Southex team to visit major business units and talk about how they ran the program.

Each industry sector also holds periodic conferences. For example, North American home shows are run from at least 16 local offices. When the managers get together, they share insights on marketing trends, feature trends, how to get media attention and what the wow factors are. If a wow factor works, it’s likely to show up next in the U.K. and then Australia.

Sharing best practices and new ideas enables disparate business units to continually reinvent their shows, keeping them fresh and in touch with what’s going on in their markets.

“You hope you never have to do a complete makeover, because that means you’ve fallen behind the market,” Franks says. “Hopefully, you’ll never see us have a complete remake of a show, other than one we buy.”

Filling in and bailing out
During the uncertain times surrounding the tech boom-bust and 9/11, the 3Ms put a halt to strategic acquisitions and refocused on organic growth in established markets. Since 2000, they’ve launched 30 new products and divested 48 products. Most of the divestitures resulted from acquiring another 31 businesses, which came with multiple products, including some that didn’t fit the mix.

dmg business media very nearly became a casualty when advertising dried up during the recession. Though still profitable, it was offered for sale in late 2000. “To be frank, we probably panicked a bit and thought, ‘Let’s get out of this,’” Cooke recalls.

With no parties interested enough to pay a fair price, dmg world media hung on to the subsidiary but spent the next three years reorganizing and right-sizing the business for global markets. They also adopted a vertically integrated model to serve their industries in print, online, and through conferences and exhibitions.

In 2000, dmg world media also formed an investment partnership with Dallas Market Center (DMC, www.dallasmarketcenter.com), a wholesale merchandise mart with permanent showrooms. In partnership with GLM and Western Exhibitions, they acquired a majority stake in Whereoware.com (www.whereoware.com), a business-to-business e-commerce site. This venture fizzled as each partner gradually bailed out. Today the Web site is a wholly owned subsidiary focused on providing software solutions for gift industry buyers and sellers.

“It’s a small standalone business which is just about to break even after all this time,” says Franks, who served as chairman when all the partners were still vested. “It doesn’t impinge on the gift business, but it’s a service to the same customers.”

Another joint venture that proved to be disappointing was the California Market Center (www.californiamarketcenter.com), launched with GLM in 2002. The concept was to give the southern California gift industry a permanent buying destination, with dmg managing the wholesale gift showrooms.

“We had hoped to provide our customers with a better service, but what we actually did was create competition,” says Cooke. “They chose between one or the other [the gift show or showroom], and it drove prices down. They were more interested in price than service.”

dmg pulled out of the mart business this year, leaving GLM to work with the new owner.

Despite these minor setbacks, dmg world media recorded record year-on-year growth in operating profits for the year ending September 2004 — 12 percent on the underlying business, which ignores gains attributed to acquisitions.

“All our sectors were producing results. The strongest of all were consumer shows in the U.K. and North America, and our businesses in the Middle East,” Alcock says. “All of our businesses are growing. There are a number that aren’t yet up to full potential, but there isn’t one that I’d say was underperforming.”

Though the ever-vigilant Alcock cautions against making forward-looking statements about this publicly traded company, Cooke says he anticipates that underlying business before acquisitions will continue to grow 6–10 percent per year.

“We like the shape and style of the business we have now,” he says. “It’s a good size, very healthy, and producing good growth. Of course, that doesn’t mean we’ve stopped acquiring. What we’re looking to do now is grow our business through a mixture of in-fill acquisitions which fit our existing sectors and through launches, and obviously through volume and price growth where it’s appropriate.”