Musical Trade Show Chairs

Canon Communications, owner of a series of B2B magazines and trade shows, has been bought by United Business Media.

This is highly relevant because Canon partners with IPC to put on Electronics Assembly Expo, which coincidentally takes place next week. And SMTA used to partner with Reed Elsevier on that show, only to be tossed aside when Canon acquired the Chicag0-based Assembly Tech Expo show (as well as the US-based Nepcon events and several magazines) from Reed in May 2006.

Not coincidentally, CIRCUITS ASSEMBLY was owned by UBM from October 1999 to February 2002. And that gave me an front row seat to see its management in action.

It wasn’t pretty.

London-based UBM has a long history of terrible business decisions. It spent $900 million on magazine publisher CMP in October 1999, and then sold off many of the just-acquired properties for pennies on the dollar. These were magazine/trade show businesses in such fields as paper making; unglamorous, to be sure, but they just happened to be huge cash cows. But they had low topline growth, and UBM’s bet was on the high-flying tech sector, which collapsed a scant 18 months later.

Where UBM benefited was it went private when its stock was super cheap, then as the markets clawed back, it went public again. That may have been the only smart financial move the company has made in 10 years.

It is paying $287 million for Canon, a company with $106 million in revenues and $37 million in pro forma EBITDA for the fiscal year ended June 30. (Canon’s venture capital owners acquired the business in 2005 for a reported $200 million.) That’s a lot of crumpets.

While UBM corporate is good at blowing money, what its business units don’t do is partner with outside organizations. When I was there, they barely partnered with each other. Given that, I can’t see UBM continuing the relationship with IPC.

And it will be very interesting to see if that forces IPC to reopen talks with SMTA over a fall electronics trade show. If nothing else, it very likely gives SMTA the upper hand in negotiations.