TRADE SHOW
Advanstar Sold for $972 Million
Advanstar Communications Inc., producer of the biannual MAGIC Marketplace trade shows in Las Vegas, the biggest apparel trade show in North America, announced on Oct. 1 that it will be acquired for $972 million by London-based media company and events producer UBM PLC, which owns PR Newswire, a prominent outlet that distributes press releases.
Advanstar, headquartered in Santa Monica, Calif., forecasted that the deal would close by the end of the year, depending on if UBM stockholders approve the deal. Joe Loggia, Advanstar’s chief executive officer, confirmed that he would remain at Advanstar for a transitional period after the deal closes. Along with acquiring MAGIC, UBM also picked up Advanstar’s New York shows, such as Coterie; Advanstar’s pharmaceutical trade shows, which are produced by its CBI Group division; and digital properties such as MAGIC’s Shopthefloor.com.
The deal would make an already big show become even bigger, Loggia said. “With greater scale across key international geographies, the combined company will be strongly positioned to continue expanding into dynamic, vertical markets. Together with UBM, we will be a global leader with a well-established portfolio of highly regarded trade shows, attracting exhibitors and retailers from all over the world and providing enhanced opportunities for customers to share insights, build critical connections and drive commerce,” he said in a prepared statement.
Tim Cobbold, UBM’s CEO, noted that the acquisition will give his company access to the U.S. fashion industry, which he described as a “new vertical for UBM.”
“[The acquisition] strengthens UBM’s core events business while balancing and complementing UBM’s strong events portfolio in emerging markets. UBM will become the largest events organizer in the U.S.,” Cobbold said in a statement.
Serving as financial advisers to Advanstar in this deal were Goldman Sachs & Co. and Moelis & Co. Paul, Weiss, Rifkind, Wharton & Garrison LLP and Slaughter and May provided legal counsel. J.P. Morgan Cazenove worked as the financial adviser to UBM, and Morgan, Lewis & Bockius LLP served as its legal adviser.
The news that Advanstar might become part of an international business could create a path toward more opportunity for manufacturers, said Ilse Metchek, president of the California Fashion Association, a Los Angeles–based trade group.
“American manufacturers’ participation in world trade shows is sadly lacking,” Metchek said. “The ability to grow and reach more markets is truly a win.”
A bigger player on the trade show business might also make for a more compelling trade show experience, Metchek said. “Bigger means it is a must see,” she said. She also noted that trade shows remain a crucial part of the fashion industry. It is where a great majority of manufacturers go to exhibit and where retailers might find brands not on anyone’s radar screen and may help them gain an edge.
The sale might foster a change in the family of MAGIC Marketplace shows, which include Project, said Jason Bates of the Derelicte showroom. He is a veteran exhibitor at Project and other high-profile trade shows. “Ideally, this merger will bring more European retailers to the U.S. market, so American brands will not be so reliant on fledgling U.S. retailers. I would be really excited to see a solid effort to bring more international buyers into the fold.”
Bates also hoped that it could inspire change with how the MAGIC Marketplace is managed.
“[MAGIC] has been losing ground for the past several seasons, and there have been other shows doing a much better job—primarily, the Liberty Fashion & Lifestyle Fairs in the U.S. are hands down the show to look at in terms of quality on all fronts,” he said.
Diane Merrick, owner of the pioneering self-named boutique Diane Merrick in Los Angeles, has been going to MAGIC Marketplace shows since the 1970s. She said MAGIC remains a vital part of the fashion business.
“MAGIC is unbelievable,” Merrick said. “I never have enough time there. I love the energy. There’s a lot of color.” She goes twice a year to the Las Vegas shows to see what fashions are trending and where the market is heading.
