You’ve probably seen the headlines “PSAV Acquires Encore Event Technologies” but don’t know how it affects you. If you are an event or meeting planner you’ve heard of PSAV. In fact, it’s highly likely you’ve done multiple deals with them. Will this merger change that? If you aren’t familiar, PSAV is an industry giant founded in 1937. They provide in-house AV and production at convention centers, venues, and hotels such as Kimpton, Hyatt, and Marriott, across the country. This month on January 14th, 2019, PSAV published a press release announcing the purchase agreement for PSAV to acquire Encore Event Technologies.
By acquiring arguably their biggest competitor in the United States there is no question they stand to dominate the market. This has caused quite a stir in the industry. The news makes for shaky ground and uncertainty for meeting and event planners nationwide. In an attempt to understand what this acquisition will mean, we did a bit of research and reached out to our Event Icons to see what their opinions were. We will get to those later but first before we dive in let’s go back in history.
In order to fully understand how big of an impact this acquisition let’s take a look at a bit of the recent history of PSAV’s acquisitions and their climb to the top.
Kelso & Co. the private equity firm that owns PSAV announced a merger between PSAV and Swank Audio Visuals, at the time Swank was the preferred in-house AV provider for over 375 hotels and resorts in the US, Canada, and the Middle East.
PSAV acquires American Audio Visual Center “an in-house, high-end production company based in Scottsdale, AZ. AAVC has been supporting clients with “Extreme Customer Service” and cutting-edge technology support in partnership with over 65 hotels and resorts, as well as through a full-service boutique production division.”
PSAV acquires Southern Audio Visual, with the acquisition came valuable partnerships with luxury hotels and strengthened their hold on key markets. PSAV President and CEO, Mike McIlwain stated in the press release “The addition of SAV is an important step toward PSAV’s goal of being the ultimate local resource for corporate, association, and event planners around the globe.”
PSAV acquires Hawthorn Theatrical, LTD. one of the biggest live event production companies in the UK strengthening their global presence.
PSAV acquires Hargrove a leading experiential events and exhibitions production company. “The acquisition brings together in one ownership group an experiential events and trade show company with one of the largest event experience providers in North America and Europe. It represents the ownership group’s entry into the global trade show market and accelerates its expansion into live experiential events.” AVNetwork
PSAV acquires Concise, expanding their portfolio into interactive apps for live events. In the press release Mike McIlwain, president, and CEO for PSAV stated: “Concise will help us address our customers’ continued desire to leverage technology to improve audience engagement and event execution with a clear return on investment.”
PSAV agreed to be acquired by Blackstone, one of the world’s leading investment firms. In the press release regarding the acquisition, Mike McIlwain, president and CEO of PSAV stated “We are very excited to partner with Blackstone, one of the world’s preeminent investors in the hotel, tradeshow, travel and leisure, and business services sectors, to support the next phase of PSAV’s growth,” Mike went on to state “Through this partnership, we and Blackstone intend to drive further innovation and growth alongside our world-class roster of venue partners and meeting planner customers.”
PSAV acquires FMAV, Canada’s largest audiovisual and event technology company expanding their reach into Canada.
PSAV acquires Encore Event Technologies. PSAV and the Freeman Company jointly announced the companies have entered into a purchase agreement for PSAV to acquire Encore Event Technologies creating the largest hold on in-house AV in North America.
Why You Should Care
As you can see from the timeline above it’s no secret that PSAV is determined to grow and expand but that’s most businesses goal. So why should event and meeting planners care?What do these mergers mean for you? Is it really going to change anything? After all acquisitions in business are nothing new, Corbin Ball put it best “Mergers and acquisitions have been standard operating procedures with many of the large companies in the event tech space. PSAV’s acquisition of Encore Event Technologies makes sense as it will add capabilities with their focus on AV support.” This is true, but is it good for the industry as a whole having such a strong hold on the industry?
While ultimately only time will tell we see this acquisition potentially going 3 ways.
It Shows a Strong Industry
Nick Borelli, President of Borelli Strategies believes “it’s a healthy sign to for the industry to have someone committed to being the biggest and having the most amount of assets. It’s a stage that vital industries go through and it shows maturity on the macro level of where we are in the live experiences field.”
This Could Spell Disaster
Because PSAV will own most of the market they will be able to charge whatever they want. They could create high barriers to dissuade competitors from entering the arena. It could also mean a lack of choice for event and meeting planners and more. Essentially this happening would be really bad for event and meeting planners. Michael Juden, Regional Director of Technology at Convene commented “The acquisition of Encore Technologies by PSAV will create a monopoly for AV production in most U.S. major markets. This will greatly impact the event and meeting planning industry because planners will now only have 1 technology option at hotels, limiting options for flexibility in their venue selection process. Given PSAV’s high costs of AV solutions, there is a massive opportunity for non-hotel venues like Convene, a growing network of full-service meeting and event venues, to supply their own AV solutions with a preferred partner or internally at highly competitive rates.”
Adding to that Brent Taylor, President Timewise Event Management Inc. notes This acquisition is dangerous as it pretty much provides PSAV a monopoly in the provision of in-house services. Time will tell if they will take advantage of this and push the in-house AV and outside supplier fees even higher.”
It Could Bring New and Fresh Opportunities
The acquisition could turn out to be really good for meeting planners and hotels. Usually when hotels bring AV companies to bid on for the exclusive in-house AV contract hotels typically will go with the company that gives them the biggest kickback and the best incentives. Because of their stronghold, PSAV will have less incentive to give back a large commission to hotels. After all, they are the biggest player with little competition.
But this might be great! This could means hotels might be looking for a new way to bid. That could potentially mean lower commission rates which in turn could lower event and meeting planners AV costs. Brent Taylor, President Timewise Event Management Inc. believes “ that this does provide a greater opportunity for regional event technology companies to move forward with geographic expansion. Not everyone wants to engage with large multinational corporations. I am most curious to see if venues will continue with PSAV or look to smaller companies for in-house services. My guess is they will go with whoever provides the greatest source of revenue while trying to manage the quality of service.”
It’s hard to say what this means, the news is still fresh. Only time will tell what impact these acquisitions will have on the industry. It is safe to say PSAV has a strong hold on the market in North America. What the effects of the acquisitions will be are yet to be seen. We want to know what your opinion is! What do you think of the news announcing that PSAV acquires Encore Event Technologies? Will this create opportunities? Is it business as usual? Do you feel it’s a danger? Comment below and let us know!