Questex on the Hunt to Buy After Own Deal Fell Through
By: Christiana Sciaudone
Questex gave up on trying to sell itself earlier this year. Nine buyers were highly interested, but still risk-averse amid elevated interest rates.
Instead of dropping the sales price, the events and media company decided to bolster its portfolio, with the support of existing and new backers. The biggest challenge in finding assets to buy? It’s not the money, but balancing the growth trajectory with the right multiple.
“What I’m looking for is a business that’s got a growth mindset,” Chief Executive Officer Paul Miller told A Media Operator. “I’m not looking to buy cheap. I don’t need to do a deal where I’m screwing the people I’m buying. I have no interest in that. At the same time, I’m not going to buy crazily high valuations without some kind of miraculous growth story.”
Questex forecast annual growth of double digits when it optimistically put itself up for sale in 2023. It was, admittedly, a very hard time to go to market, what with little dealmaking happening because private equity firms were and continue to be largely unable to sell assets and raise funds. Throw in high interest rates and you have a scenario where a company with double-digit growth and solid 2024 bookings couldn’t find a willing buyer (at their desired price).
Questex decided to nix the sale and backer MidOcean Partners then said they wanted to stay in the company, even after five years of ownership. In five days they refinanced the business. And now they’re on the hunt.
What Went Wrong, What’s up Next
Questex came out of the pandemic in a strong position and was promising double-digit growth for 2024. Buyers were skeptical. They weren’t sure events would continue to be so popular, even as Miller pointed to solid forward-bookings. It wasn’t enough for gun-shy buyers, private equity and otherwise.
To Miller’s satisfaction, 2024 looks like it will indeed close as expected: Questex’s events business is set to grow 12% with total sales for the entire company of $112 million, with about $32 million in profit. Events should represent about 73% of revenue and 27% should be digital, which has been flat amid a weaker ad market.
The company is now focused on boosting that revenue through acquisitions and is actively on the lookout. It already operates in hospitality, wellness, healthcare, life science and technology. Bolt-ons are welcome, but it’s also ready to break into new areas.
“We like the markets we’re in a lot, we believe we have a great story there, and therefore we have leaned very heavily in trying to acquire in those markets, and continue to do so,” Miller said. But “we are widening the aperture into new markets.”
Regardless of the industry, the strategy will be the same: media and events together—one isn’t good enough without the other.
“We completely believe in the strategy of, let’s talk to our communities every day, not three days a year,” Miller said. On the other hand, they also know how to launch an event based on data.
“If it’s a new market for us, we have to have a size play there. We have to be able to be influential. So that would probably mean tens of millions of revenue as an acquisition, rather than $2 million of revenue as an acquisition to a new market,” Miller said.
Questex is looking for an events company making $5 million to $10 million in EBITDA, or 10x to 12x EBITDA, which Daniel Pitchford from investment bank Collingwood said at last week’s AMO Summit in New York would cost $50 million to $60 million.
Setting aside Informa’s relatively sizable acquisitions of late (Industry Dive at $389 million and Ascential at $1.6 billion), Miller noted that most deals in the industry tend to be incremental.
“We’re looking to go beyond incrementalist. If GDP is 5% I want to grow double GDP. To do that, I’ve got to have great assets,” and that means top talent, Miller said. “We’re getting in talent to build and run a much bigger company, and the events industry needs to do that.”
Don’t Do Events Like It’s 2019
The business of events has become so buzzy that the idea that we may have reached “peak events” has been bandied about. That doesn’t mean the industry doesn’t have to innovate.
“Tech can really enhance the face to face ROI. It can do matchmaking of high quality. It can curate experiences for you. It can help you understand what content is relevant to your audience at what time,” Miller said. “With generative AI on the fly, you can say, Hey, Paul, you’re in the wrong room. You’re in room A, but in room C, you’ve got 20 people that look like you in terms of what they’re looking for, you should probably move rooms.”
People want to get out there and have experiences, but events can’t feel 2019 anymore. Miller mentioned that he has two daughters in their 20s.
“I can promise you that they are not going to a trade show 2019 style. In their mind, that is 100 years out of date. So they’re looking for Taylor Swift experience at a business event,” Miller said. “That means that you’ve got stuff curated for you. It means that the tech at the event is really enhancing the experience. They want to be part of a community where they feel that the community is together.”
