The announcement brings to an end, at least for now, the speculation that Advanstar would attract more than the $900 million that a private equity fund controlled by Credit Suisse First Boston paid for the company in 2000.
In April, CSFB sold several units of Advanstar, including its travel properties, for $185 million to Audax Group, another private equity player.
Advanstar has also been a buyer in this robust year for M&A activity, strengthening its core properties in the fashion, life sciences and power sports markets. For example, in August it acquired for an undisclosed sum Project Trade Show, a series of fashion trade events. Separately, Advanstar acquired POOL, a 4-year-old fashion trade show for boutique-oriented products.
In an interview Friday with BtoB, Advanstar CEO Joseph Loggia said: “We had a lot of interest in this business. But after a lot of analysis, what we decided to do is keep the business.” He stressed that the company’s board wanted to move forward with the business and was pleased with the company’s strong third-quarter results. Loggia added that a $75 million payment due to bond holders also made a deal less attractive.
Bob Krakoff, former Advanstar chairman, who had financial backing from Blackstone Group International in an effort to purchase his old company, said he “certainly looked at the property.” He would not elaborate or say whether his group was a bidder.
Asked why Advanstar couldn’t pull off a deal, particularly with an improving economy and generous bank lending rates, Krakoff said: “The expectations of the seller were too high. It takes two parties to agree on the value of a company.”
Joseph Berkery, CEO of media investment banking firm Berkery, Noyes & Co., said Advanstar “probably decided to wait a little while to get a better price. They’ll grow the business, and value will be greater a couple of years down the road.”
Loggia said the decision announced Friday didn’t necessarily signal an end of the game. "Do I think in two or three years that we'll be out there again? Sure,” he said.
—Matthew Schwartz and Sean Callahan