While the trade show market overall has been trending well in performance for the last year or so, its M&A market was given a shot in the arm in late August when Charlie McCurdy, with backing from Providence Equity, emerged as the winning bidder for the George Little Management (GLM) group of events, which was put up for sale in June by DMG::Events, itself owned by London-based Daily Mail and General Trust. At $173 million, the deal is one of the biggest, if not the biggest, of the year so far for the event sector.

The partnership between McCurdy and Providence—who together formed a holding company that as of presstime was still unnamed called GLM Holdings LLC—is a clear statement of the value of events, particularly when McCurdy, who has a long history in b-to-b media, has chosen to use GLM as a base to build from.

McCurdy last made headlines when he sold Canon Communications, a medical device and manufacturing media company, in September 2010 to UBM for $287 million. Canon was a part of McCurdy’s Apprise Media, a platform company he built up with backing from Spectrum Equity Investors.

Apprise and Canon were a diverse mix of b-to-b and enthusiast brands—Canon being the largest chunk of the group—spread across print, event, digital and data services platforms. Now, however, McCurdy is starting from scratch and plans to build his holding company from those same buckets, minus one—print. Here, we speak with McCurdy about his plans for GLM and how he plans to use it to expand further into the business-to-retailer space.

EXPO: How did the partnership with Providence come about?

Charles McCurdy: As a firm they have, since their founding in 1989, been one of those firms that’s been focused pretty exclusively on communication and media categories, very broadly defined.
After I left Canon around the end of last year, I started looking into areas that might look interesting and the trade show sector is one that I think has, for the right business, very good promise for growth and innovation in services. At the same time I was talking to a number of investor groups to align with and it became clear by the spring that Providence had a similar view on the trade show sector.

EXPO: Does Providence already have holdings in the trade show market?

McCurdy: They do not currently have any trade show business. And in the context of what they do in media and communications, [the acquisition] makes a lot of sense.

EXPO: What is your role with Apprise now?

McCurdy: Apprise was a management services company that I created and worked with Spectrum on Canon and a couple of smaller enthusiast media groups. The structure is a little bit different here where we have this holding company that I’ll be running that is in lieu of what Apprise was doing. Strictly speaking, I’ll not be involving the Apprise Media LLC entity in this activity.

EXPO: Why start with a trade show purchase? What was the opportunity there?

McCurdy: I’ve had extensive experience in what has come to be called the niche media space. Early this year, as I looked out on the terrain as to where opportunities and risks are, I continued to like the business-to-business media space in part because the depth of information that is available regarding the activities of its audiences, as compared to consumer media. And I think that’s a key area of differentiation—the ‘decommodification’ of what a media firm can offer marketers.

First of all, b-to-b as a sector is one that I see opportunity in. Within that it’s often broken down into the four buckets of trade shows, publishing, digital and data services.

The trade show business was impacted by the recession as everything was, but it does not have the obvious disintermediation challenges that print has. And digital and data services, properly employed, should have good growth opportunities ahead. As a result, I was focused mostly on businesses that had strong positions and potential for growth in those three categories—trade shows, digital and data—and less focused on print assets.

In June DMG announced that it was putting GLM up for sale and it attracted Providence and my attention as a potential platform.

EXPO: Can you characterize the bidding pool at the time?

McCurdy: I wasn’t privy to that, but what I can say is the list of usual suspects from say, five years ago, compared to my impression of the group that was looking at GLM was quite different. Many investment firms that were concentrating on media from the 90s through 2007 timeframe have backed off on the sector.

EXPO: Does that help you in the sense of competing bidders as you grow your holding company?

McCurdy: I suppose that it helped us in the sense that at the end of the day we arrived at a transaction that we’re happy with and excited about.

EXPO: Going forward, can you describe what you hope to be will be the product platform mix for the company and where you plan on focusing your acquisitions?

McCurdy: I would start by referring back to some of the things we did at Canon, which is a very different business in that it serves different markets, but as a b-to-b media group presented similar opportunities back in 2005 when we first got involved in it. It had a trade show group that was very strong in its markets, but presented opportunities for expansion in other regions of the U.S. and outside the U.S. either through launch or through acquisition. It was also providing a role in its markets that could very well be served through digital media and data services that was just starting to get developed. We put that into high gear and developed a substantial and profitable set of digital media and data service offerings in that market. By doing that we were able, through organic launch and selective acquisitions, to double the size of the enterprise in five years and bring the leverage ratios down and all of those good things.

GLM is obviously different in that I call it a business-to-retailer sector as a sub-category of b-to-b, but it’s a great organization with trade shows that are essential in the functioning of their markets, most notably in the New York International Gift Fair and the Surf Expo products. And we see an opportunity to expand those services beyond the regions where they’re strong—potentially within the U.S. and outside the U.S. either through selective acquisition or launch. In that regard, there are plans for next year for extending off the Surf Expo shows in Santa Monica, California and Singapore.

A point that you may have heard others make before and I’ll make is that in many ways the functions that the trade show provides, which tend to be lead generation and sales generation for exhibitors, are in many ways more directly translatable to what online services can do than what a magazine can do, and GLM has done some preliminary work in developing online services to support its exhibitors and attendee/retail buyers.

We’re very excited about stepping up the pace of product development and innovation in digital media and data services in the sector based on the trends in the category and the early experience that GLM has had.

EXPO: It sounds like you’re trending away from print as a component of the company you’re building now.

McCurdy: It’s not so much that I’m trending away from print as we’re starting with a very strong set of commercial relationships between exhibitors and the buyers and looking for ways to enhance and leverage those relationships with other valuable services. As we look down the list of where we can find growth, it’s additional face-to-face events, digital media and data services rather than trying to launch or buy magazines in the space.

EXPO: Do you have a sense of how big in terms of revenue you see your company getting?

McCurdy: It’s too early to say. But I do think we see an opportunity to establish GLM as a very strong and scalable operating base from which to materially grow the enterprise through product innovation and strategic acquisition.

EXPO: Will you focus on the markets that GLM operates in or do you see other completely different markets that you might fold into the company?

McCurdy: When I was at Primedia we were very active in building up highly diverse media groups, including consumer publishing and b-to-b publishing, and it was becoming clear to me ten years ago given the challenges of the evolving media business that it could be a strategic advantage to focus on a sector rather than diversify, which is why with Canon we stayed very focused on the advanced manufacturing and design engineering sector and finding ways to bring good services to bear on that market. That market sector focus was a strategic competitive advantage.

With GLM, with such a strong portion of the business-to-retailer sector, we’re focused on expanding that in particular. If anything, just looking at the whole supply chain from manufacturer through designers and retailers and finding ways that we can add value as a media company and taming what is a somewhat complex and fragmented supply chain that brings good products to the attention of retailers.

EXPO: Was there anything different in how the deal was done with GLM than perhaps what you’ve been involved with in the past?

McCurdy: I think the Jordan, Edmiston Group ran a fairly standard two-stage process on this with a qualifying round and then a final round. So it was a pretty straightforward approach.

For a variety of reasons DMG decided to announce that the group was available to buy. Sometimes people keep things under wraps and sometimes people announce deals, but otherwise they handled the process in a pretty straightforward way.

EXPO: What are the shorter term acquisition opportunities in the trade show market and the other markets that you’ve described?

McCurdy: The first thing is making sure that we have a strong and scalable operating base at GLM, which is a varied company. For instance, it was in the middle of setting up its own enterprise technology system—an event management system. They were in the middle of that when the company went through the auction process and some of those activities were put on hold. We want to complete that process so that before adding much volume of activity to the company we have a strong operating infrastructure.

That being said, I think that there are a lot of good performing assets out there in b-to-b land and there is, to state the obvious, a lot of ownership that is not entirely voluntary and we do think that in the next 12 to 36 months there will be a fairly robust flow of transaction opportunities. We can be very focused and selective as to where we see the best opportunities.

EXPO: Do you think the multiples will be in favor of the buyer in that time frame?

McCurdy: At the end of the day the  multiples are a function of what the buyer and seller are willing to agree to. Strong trade shows, from 1990 to 2007, would tend to sell for double-digit EBIDTA multiples. Clearly, we paid a good deal lower multiple than what’s been in published reports and I think that’s reflective of some caution in the sector among investors and the increasing risk during the summer of a double-dip recession. That also impacted the credit markets which got a little bit more conservative over the course of the summer. I think that had an impact on value as well.

Going forward, it’s certainly hard to predict. Sometimes multiples pick up very quickly and sometimes they drive along for a long time with such a slowdown in transactions.