Viad Corp. Buys Top Event Housing Provides to Boost GES
Viad Corp. (VVI) has acquired leading U.S. event housing service providers, onPeak LLC and Travel Planners, Inc., to fortify its live event service business, GES, which is part of its Marketing & Events Group. The combined business will operate under the brand name of onPeak, a GES Global Company (onPeak | GES).
onPeak | GES will manage hotel booking administration including securing room blocks with local hotels, market those reserved blocks to event attendees and exhibitors, and manage attendee and exhibitor reservations. The division will also manage housing concerns through the events. onPeak | GES will serve 60% of the top 250 U.S. events.
Viad Corp. aims to make Marketing & Events Group an ace full service provider globally for live events. It has also recognized event housing as an important part of GES.
The acquisitions bear a testimony to Viad Corp.’s goal of becoming a market leader. Moreover, the U.S. event housing market with a size of about $200 million and operating margins that are accretive to GES' operating margins offer immense potential for the company’s growth. onPeak | GES stands to benefit from these opportunities by leveraging its scale and industry-leading technology.
However, due to integration expenses, the transactions would be dilutive to Viad Corp.’s 2014 earnings. Nonetheless, these would be accretive to 2015 earnings. The Zacks Consensus Estimate is currently pegged at $1.80 for 2014 and $1.75 for 2015. We expect revisions in the numbers as analysts incorporate the impact of the transactions into their estimates.
With optimism over the acquisitions and analysts pulling up 2015 estimates, we expect upward pressure on the Zacks Rank. Currently, Viad Corp. carries a Zacks Rank #3 (Hold).
Viad Corp. has undertaken strategic acquisitions to expand its business and improve operational results. Last month, it acquired Blitz Communications Group Ltd and its affiliates, a leading audio-visual staging and creative services provider for the live events industry in the United Kingdom and continental Europe. In July, it acquired West Glacier Motel & Cabins, the Apgar Village Lodge and related land, food and beverage services and retail operations.
Other Stocks to Consider
Better-ranked stocks include ExamWorks Group, Inc. (EXAM), SouFun Holdings Ltd. (SFUN) and IHS Inc. (IHS). All these carry a Zacks Rank #2 (Buy).
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