The Merger: PSAV and Swank AV
Back in 2007, a couple private equity firms saw an opportunity in the live events space and grabbed two of the industry’s bigger names: PSAV Presentation Services (snapped up by NY-based Kelso & Co.) and Swank Audio Visuals (by Chicago-based CHS Capital). Whether they knew at the time that the Great Recession would take its toll on meetings and conventions is moot now.
Because things are looking up. And as we learned a couple weeks ago, Kelso & Co. has agreed to buy Swank AV from CHS Capital and merge the two into one big live events company. This news comes on the heels of last summer’s announcement that Swank AV would buy MVP International, which provides event technology to Marriott and related properties worldwide.
It calls to mind another recession-era AV industry transaction, namely the merger that created AVI-SPL in 2008. Though in this case, PSAV and Swank AV appear to have economic tailwinds in their favor, while AVI-SPL almost imediately had to deal with business headwinds. Word is, the combined PSAV-Swank AV will employ upwards of 6,000 professionals, combine both companies’ strengths in North America, and spread its global footprint via Swank’s notable presence in the Middle East and PSAV’s in Mexico and Europe. Both companies have extensive relationships with hotels around the world, making this what Mike Stengel, vice president of operations at Swank, calls a “meetings industry merger.”
Why now? What does it all mean? And what impact might the merger have on smaller live events companies?
“If you take a look at the hotel business today and what the future seems to hold for the hotel business and meeting industry, it’s very vibrant right now,” Stengel told me recently. “There’s a great future. It’s very positive. The indicators are moving up, indicating favorable trends for the next three years or more. Kelso saw that. The management of both PSAV and Swank saw that, and all three are very bullish on the future.”
What impact might the new company have on the industry?
“For our team members, our hoteliers that we serve, our outside services customers, we’ll be able to offer greater opportunities moving forward,” Stengel said. The combined company will provide more career opportunities and advancement for our team members. It will allow for great economies of scale and implementation of best practices, for making available larger quantities and types of high-end equipment and new technologies. And we’ll be able to offer more readily available equipment and staffing resources. Our customers will receive the most experienced, well-trained technical sales and service staff that the industry has to offer.”
To be sure, there are many other expert live events companies out there, but Stengel’s optimism bodes well for everyone. Management obviously sees a bright future overall and wants to position itself to take advantage. But PSAV-Swank’s measure of the future may be more in what they do than in what they say (note: Andee Oleno, Swank’s Director of Marketing, told me an announcement on the final structure of the combined company would be out in early November, when the deal is final; the leadership team is expected to come from both firms).
Both companies have moved heavily into network services and mobile technologies. Swank has a relatively new service called Mobile Meeting Manager that it developed to allow meeting attendees to use their smartphones and tablets to engage in interactive events. PSAV rolled out a content management service called Content1 for, among other things, recording, storing and managing hundreds of live-event sessions at one time. And both have met clients at the intersection of AV and IT, whether it’s to purpose-build hearty IT networks that support one-off events or evaluate clients’ existing network services during event planning.
“In live events, network services and event network services interconnectivity — when we go in and install tempory networks — those are getting more robust,” Stengel said. “They are more expandable; more scalable in the meeting space on a temporary basis. We’re moving into all these areas now and we think they’ll accelerate, including mobile applications, be it how meeting planners communicate with their participants or how we communicate with our meeting planners. All of those, from a mobile applications perspective, will continue to grow.”
Whenever two large companies create one larger company, there’s a measure of hand-wringing over what it means for competition. Stengel is optimistic enough about the future that he figures all boats are going to rise. “This is the type of industry where there’s always been and always will be a lot of smaller local and regional players,” he said. ”We don’t see that changing. There are customers who’ve come to rely on those relationships, and those relationships will still be there because there are a lot of good companies in this industry.”