by Ray Smith, ECN Reporter
Star Group founder and owner Mark Johnson is making significant strides at growing the event marketing company’s geographic footprint outside its Minneapolis base.
In November, Star Group acquired Exhibit Edge, a prominent exhibition and events company based in Washington, D.C., with facilities in Chantilly, V.A. That follows the acquisition of Neu Concepts, in Raleigh, N.C. Johnson says talks continue with a company in Orlando, F.L.
Johnson opened a 90,000-square-foot facility in Las Vegas in December, expanding from its current 50,000 square feet.
“We’re just looking to be more of a partner with our customers across the United States,” Johnson tells Exhibit City News in a phone interview from Washington, where he was wrapping up details with Exhibit Edge. “We’re looking for certain additions and expanding our capabilities.”
“What we’re really looking for is businesses with heavy involvement in government sectors,” a strong suit for Exhibit Edge, he adds.
MERGER MANIA
Star Group’s acquisitions are among some 90 mergers and acquisitions transacted within the tradeshow industry in 2023, including Nth Degree joining with Fern Exposition Services in June, and Corp Events New England acquiring Dame Associates and Specialty Equipment Rental in March.
Also in June, FX Design Group, a leader in broadcast design solutions, merged with Exhibit Design Group, a provider of immersive experiential design, forming a partnership of two companies that have collaborated on numerous projects since 2018.
EventWorks and Quest Events on Nov. 30 announced a strategic combination that will broaden their reach and deliver “unparalleled, full-service experience,” company executives proclaim.
The recapitalization merger brings EventWorks, one of the Southeast’s top providers of event rental equipment with locations in eight cities, together with Frisco, Texas-based Quest Events, a national leader in drapery and scenic elements.
The companies will employ about 780 workers and manage more than 550,000 square feet of warehouse-stored rental equipment, supporting some 50,000 events a year.
“We are ecstatic to be combining these two industry leaders to create more value for our clients, more opportunities for our teams, and leverage our combined resources to provide a unique, unprecedented offering to our social and corporate markets,” EventWorks CEO Mike Schmidt says in a company statement.
MARKET RESURGENCE
The tradeshow and events industry has bounced back faster than expected, its value proven and even strengthened by the pandemic, according to JEGI Clarity. Investors are jumping back in to access deal opportunities across the spectrum, the investment bank reported in May.
The global exhibition market has traditionally grown ahead of GDP, increasing 5 percent annually from 2017 to 2019 when it reached a total value of $29 billion. Growth was halted dramatically by COVID, with the market shrinking 69 percent to $10 billion in 2021.
“With F2F back on track to pre-pandemic levels and the industry stronger, investor confidence has also returned. This is shown by the slew of major and some smaller deals in 2023, proving that the industry is both attractive and investable,” the JEGI report states. “The industry is seeing a return of M&A activity and relatively strong transaction multiples. North America continues to lead the way with a strong market recovery post-COVID and a broad set of actionable opportunities.”
Barry Boniface, partner in MSouth, a private equity group and parent company of Nth Degree, believes we’re in the midst of a “substantial resurgence” in the consumer and business event market.
“Spending in that segment is projected to outpace overall advertising and marketing investments as brands shift budgets to activities that engage buyers, create emotional connections, and increase sales,” he commented on the Fern merger.
Dan Greene, exhibit industry veteran and M&A expert, adds, “Many acquisitions take place purely to improve the buyers’ financial position, regardless of the employees or customer base. However, finding a geographic advantage that provides access to expertise in specialized markets, with barriers to entry, will generate new sales opportunities for the entire sales team. This strategy will accelerate revenue growth and increase lifetime cash flows.”
CHANGING HANDS
DJ Heckes, founder and CEO of Albuquerque, N.M.-based Exhib-It!, is selling her company to Georgea Frank-Tann, ending a 23-year career in the tradeshow industry that saw her crash the proverbial glass ceiling for women executives. She’ll stay on for a year to help with what she envisions as a “seamless transition.”
Exhib-It! offers tradeshow services ranging from branding, marketing and logo consultation and design to production of banner stands, tradeshow displays and custom environmental displays. The company also provides tradeshow management, storage and shipping services.
An author and feted business leader, Heckes has been phasing out of day-to-day operations over the last few years as she looked for someone to take over the company. She’s confident that Frank-Tann, a New Mexico native with international marketing experience, will elevate the company to the next level.
“She is a smart, talented, beautiful, and strong woman who can take this company even further than I did, and I plan to help her do just that,” Heckes says. All six employees will keep their jobs, just as they did during the COVID shutdown.
“Sometimes, when larger companies take over acquisitions, you lose the personal touch with the customer,” Heckes adds, “and the way we did it was (to) have a local native New Mexican that knows and understands not only our state, but also has international experience in living in other countries.”
Heckes believes that Frank-Tann’s marketing skills will help the new owner keep pace with changes in the workplace, understand customers and capitalize on social media.
“I always tell people we are a marketing company first, and because of that, we happen to design and sell great exhibits and graphics,” says Heckes, who has garnered awards from numerous organizations for being a leader among women in business.
REVENUE READY
Exhib-It! was listed for sale on Sept. 19, 2023, a virtual meeting with Frank-Tann was scheduled for the next day and a letter of intent was signed within a week, Heckes notes.
“For a small business in Albuquerque, Exhib-It!’s footprint in the industry is rather large,” Frank-Tann says of her decision to acquire the company’s assets. Revenue grew from $550,000 in 2020 to $1.8 million in 2022, with a large chunk of it coming from outside New Mexico, and from federal agencies such as the Department of Agriculture.
“There’s so much, not only the national footprint. DJ built a longstanding staff and a host of processes and systems that make it so we can go to the next level,” the new owner adds.
Frank-Tann considered starting her own agency in Albuquerque, having returned from 10 years of living abroad, but felt an acquisition was a better option, and Exhib-It! was the “best of the bunch” she explored.
“Anyone that’s ever started a small business knows it takes years to create cash flow and be successful. It puts us in a better position to scale and grow the business to the next level,” Frank-Tann says. “The hardest part on a 1-to-10 scale is getting from one to five.”
ENHANCED EXPERIENCE
These acquisitions share a common goal: enhancing the client’s experience through greater capabilities and resources. It’s all about creating a brand experience, whether through face-to-face interaction or the virtual world. The buzzword these days is “experiential marketing.”
“In our world, it’s anything that brings an experience from the brand to an actual person,” Star Group’s Johnson says. “Not a website. It’s got to bring an emotion or physically connect between a buyer and a brand.”
Exhibit Edge, in business since 1992, has a good staff, and Johnson is not looking to downsize for economies of scale. He intends to leverage both companies’ collective strengths to exceed client expectations. “We’re an extension of the client’s marketing department,” he says.
Star’s work includes promoting Coca Cola at NCAA games, designing the entrance sign and banners for the Arnold Palmer Invitational in Orlando, F.L., setting up outdoor tents and beverage bar for the Zurich Golf Classic in New Orleans, and building a comic book-themed exhibit for Craftsman Tools at ComicCon in New York.
“This acquisition will allow us to leverage the expertise of two highly skilled teams to bring our clients even more outstanding experiences and meet the ever-changing demands of their trade shows and events across venues and markets,” states Bev Gray, president and CEO of Exhibit Edge.
This story originally appeared in the Q1 2024 issue of Exhibit City News, p. 20. For original layout, visit https://issuu.com/exhibitcitynews/docs/ecn_q1_2024.
