Earlier this week, the global destination-management company AlliedPRA was acquired by New York–based private equity firm CI Capital Partners. Details of the transaction were not disclosed. Convene spoke with AlliedPRA CEO Tony Lorenz about what the acquisition will mean for the company going forward:
Tell us how this acquisition came about.
I came into the position about a year and a half ago with the intent to evolve the business a bit and put it in a position to transition it to the next ownership, likely private equity. We were owned by private equity before I got here and they were in it for eight years or so, and so it was time for them to transition out. And that’s what the process has been about. So what we’ve been doing in the lead-up to the acquisition by CI Capital Partners is build the business through acquisition and conversion of several franchise offices — and then the acquisition of DSC [Destination Services Corporation, in February] was a touchstone moment for the business as well.
In the events space — an interesting, powerful space — where this sector [destination-management companies] sits is highly fragmented and could use a little stronger consolidation and leadership. [CI Capital Partners] looked at our business as the leader in the sector, so their enthusiasm is there to fund the business forward with a growth strategy that includes acquisition and expansion of global sales, increasing leverage of partnership, technology, and other elements of the plan.
So that’s what we will be up to. There will be a fairly aggressive growth trajectory between now and over the course of the next year, mid-term, and we’ll likely triple the business in that period of time.
Will that include geographic expansion?
A little bit. We’re already in every major market with the exception of one or two. There’s a few select North American markets we’re not in, but we’re in most of them, so the endeavor is to get deeper in the markets in which we currently reside and then pick up other markets in which we do not reside. DSC is an example — we didn’t have any offices in Jackson, Denver, Vail, Colorado Springs, so by buying DSC, we bought six new locations and there are other acquisitions already on deck in LOI [Letter of Intent] that are in markets where we currently reside but we’re buying very strong companies in those markets to create a deeper market share in those markets.
Do you foresee any changes in staffing?
Only growth, and more of it.
What are you most looking forward to now that CI Capital Partners is behind AlliedPRA?
We’re going to have the resources to do what this sector of the business-events space has been due to do for a long time, which is really create a position within business events that will yield a more recognized appreciation for the value that we deliver as a sector. And that’s hard to do when you’re as highly fragmented as this space is.The fragmentation refers to the number of businesses out there that execute to the services of a DMC, so there hundreds of them in North America alone. When you have that level of fragmentation, it’s hard to deliver a set of best practices that is widely accepted throughout the sector.We’re No. 1 in market share now with only 5 percent of the market, which says how highly fragmented it is. To the extent that we can responsibly lead the sector going forward then we’ll, as a sector, have a voice within the broader business-events community. And it takes a little bit of scale to get that done.
AlliedPRA is proud of its history and is here to stay and extend its leadership position in service to its clients — in an industry that is amongst the most powerful on the planet. Because that’s what we’re here to do. We’re here to bring the sector into a fuller, more robust position within business events.