ExpoWeb - June, 2005
Five Minute Interview with Questex CEO Kerry Gumas
Kerry Gumas, former Vice President and General Manager of Advanstar's Information Technology & Communications Group, recently announced that he and the Audax Group are forming a new company called Questex, which is acquiring several divisions from Advanstar Communications. The deal, worth $185 million, includes: the Information Technology & Communications, Travel & Hospitality, Beauty, Home Entertainment, Abilities and Portfolio groups. These groups generated approximately $100 million in revenue in 2004. Here's what Gumas tells EXPO about the deal and his plans for the future of Questex.
EXPO: We've heard that Advanstar's sale of assets to Questex was some time in the making. How did the deal come about?
Gumas: From Advanstar's perspective, the company has grown pretty rapidly, both from organic growth and acquisitions. The company found itself in the favorable position of serving 19 separate industries. Advanstar started a process of strategic review a year and a half ago, and that process revealed a wide range of growth opportunities across all the markets and industries we served. It was an overwhelming number of opportunities to pursue. We couldn't pursue all the opportunities in front of us, so the company reached the decision that the best thing to do would be to form two separate companies. We started the process in the summer of 2004 and quickly decided to execute a management buyout because we felt that kind of a transaction would cause the least amount of disruption to customers and staff.
EXPO: Why did Advanstar decide to keep the properties they've retained, and why did you decide to acquire the properties you've acquired?
Gumas:Advanstar identified the properties they were interested in selling, and the inclusion of the Technology Group was pretty straightforward since I had overseen that group for the last six years. After our initial discussions regarding the Technology Group, we determined that the Travel, Beauty, Home Entertainment and Portfolio Groups were also very attractive and would amount to a combined portfolio that would allow us to create a significant and diversified B-to-B media company.
EXPO: As you get this new company going, what do you believe are the biggest challenges, and how do you plan to handle those challenges?
Gumas: After we close the deal, the biggest challenge will be moving these properties into a stand-alone company. We're already in the process of finding offices in the cities where these various properties are already based, among them: New York; Cleveland, OH; Duluth, MN; and Santa Ana, CA. We've got a 90-day transition plan in place. Advanstar is providing an operating platform for us as we get started, but we'll be transitioning away from that in the short term.
Beyond that, we're planning to taking advantage of some opportunities that were initially identified as part of the strategic plan. Now, with a corporate structure in place and operating capital, we'll be able to begin to grow our company.
We want to begin by improving the existing company and ensuring we serve our customers with a truly integrated solution for the markets we serve. To achieve that, we have a list of acquisitions we're already pursuing.