UBM CEO David Levin on events, the acquisition spree and emerging markets

The story of the media business in the last five years, across all sectors, has been one of retraction, re-evaluation and uncertainty. Multinational B2B publisher United Business Media Loading... companies UBM is no different in some respects, but it stands out a couple of key areas: it keeps buying businesses and it keeps making money.

The global tradeshow event business is worth $25 billion a year (according to AMR Research figures) and UBM has invested aggressively in upping its market share around the world, most recently with the $287 million acquisition of Canon Communications Loading... companies canon-communications .

In the second part of TheMediaBriefing's exclusive interview with UBM CEO David Levin, we ask whether the the acquisition spree can be maintained...

TheMediaBriefing: You're very keen on buying companies - can those acquisitions continue?

David Levin: Did you know that we've sold more in value than we bought? In value, in my tenure, we've made money. We sold a third of Five for £248m - but RTL sold all of Five to Desmond for something like £100m.

But yes, we've done 80 bolt-on acquisitions. Certainly, across the 80 there are one or two I'd rather we hadn't (he won't say which ones) but the balance is good.

So can we expect 80 more deals in the next five years?

Yes, that's the base plan. Actually, the markets we serve are very fragmented, particularly around the events side, we shall be doing more in emerging markets - that's got to be our orientation.

If periodically a large deal like Canon comes along then so be it. We've built the capacity to manage international transactions and to manage small transactions - and they're both difficult skills to have. How does witholding tax work in x country? Institutionally we know how to handle these things.

You're investing a lot in virtual events - do they make any money?

We've got a big position in what we call US technology publishing - we had a clutch of magazines, which were at the epicentre of that rapid change (in business models).

So when Second Life Loading... products second-life came along and began to get some corporate traction, one of our events teams ran an event in Second Life... I think in 2007 and we had 2,000 attendees to a two-day conference which was done both online and in Second Life.

We thought "2,000 people? There must be an opportunity here." So on the back of that we invested in some development resource and bought a design studio in Chicago... we invested in the interface to make this thing as intuitive as possible. There were eight of these events in 2000, 32 in 2009 and we're going to finish this year somewhere close to 100.

So you're doing what B2B companies have always done, you're just not doing it through weekly magazines and text-based websites a much?

We're no different from the Romans. Buyers need sellers and can we, as an intermediary, bring them together? At its heart it's about: can I help you a customer find more things that you need to buy?

It's very different in B2B than in B2C. In B2C all purchases are essentially optional. At the bottom of Maslow's set of needs, we're going to need food, but once you've generically satisfied your need for food, everything else is optional.

In B2B that is not the case: you have professional buyers. And that is something that people really haven't appreciated - by bringing together buyers and sellers you are bringing a service to both... All too often B2B companies think about their customers being the vendors and the audience being a sort of passive blob that is just marketed too.

How seriously are taking emerging markets right now?

Six weeks after I joined I took the management team to Shanghai, six weeks after that we went to Bangalore. We hired an Indian entrepreneur to our plc board - and I'm still staggered that more companies don't do that. The balance of economic power is shifting and one's just got to recognise that.

Has the age of the leveraged buy-out come to an end?

I don't think you can say never because banking cycles are as old as banking. It is inevitable that banks will make more capital available to somebody at some point.

The costs of capital are high too and this is a global issue: you want to borrow in Brazil as a Brazilian? It's bloody expensive.

People might ruminate about you buying Reed Exhibitions, is that on the cards?

Who knows? Speculatively, everything in the exhibition industry is something we're interested in. I think the the real question is what's the ability and appetite of private equity to distort the market. From 2003 and 2008 private equity had access to a lot of capital and could outbid any corporate for any asset.

It happens to be in B2B that they destroyed a massive amount of value for their investors. When corporates make that decision to sell, it's for them to understand how to make the most of it.

So are you going to buy Reed?

These are hypotheticals... There are a list of 20 hypotheticals which would be a lot more attractive - the crucial thing is to look for businesses with growth. I want businesses in growing countries.

I don't know whether they are going to sell or not - but the way the market is, there's a stack of other things to go for. This year China is coming up faster than the North Europeans. I don't want to be buying big European shows with no growth prospects.

Read part one of this interview here.