AVI-SPL Sells Rental, Event Services Division to Freeman - AvNetwork.com

AVI-SPL Sells Rental, Event Services Division to Freeman

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It may not crowd out the news of Ebay’s spin-off of PayPal from front pages of newspapers this week, but today’s announcement from our industry’s largest AV intregrator, Tampa, Florida-based AVI-SPL, that they have sold their Hotel, Equipment Rental and Event Production Services division to Freeman is pretty big news. Specializing in association trade shows, business meetings, and special events, Freeman is adding this division of AVI-SPL to their stable of recently acquired event-side companies including Encore Event Technologies, Stage Rigging, and Alford Media– all now part of Freeman Audio Visual. (Both AVI-SPL and Freeman are privately held companies and as such are not required to report details of price etc. Freeman AV and Encore Event Technologies will, according to Freeman, strategically manage the transition of all AVI-SPL's hotel, rental and staging accounts, employees and operations in the coming months.)

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John Zettel, CEO of AVI-SPLThe sale of AVI-SPL’s Hotel, Equipment Rental and Event Production Services to Freeman is a sign of the continuing boom in installed AV and an acknowledgment that the staging and rental part of the business– while also strong– still operates with different rules and for different customers.

As press we receive news releases daily, hourly, that open with some variation of the phrase “the world’s leading provider of…” – fill in the blank. In today’s press release from AVI-SPL, the company referred to itself as ”the world’s leading audio visual and video solutions provider”. The difference is, they really are– the largest that is. They topped our SCN list of the top 50 Integrators last December with projected 2013 Revenue from commercial AV systems installations vs. projected 2013 total revenue of $564.58M and $601.9M respectively.

If you look at that revenue split for 2013, and compare it to the numbers, and revenue split of the other installed AV companies down the list, two things are clear:

AVI-SPL’s total revenue places it far ahead of any competitor. And they are the only installed AV company at or near the top of the list that still gets some significant revenue from non-installed AV, i.e. some form of hotel, AV equipment rental or event production services. But with today’s announcement, that will change.

“This transaction is consistent with our strategy to be the world’s leading provider of integrated collaboration solutions,” said CEO John Zettel, in the official press release. “AVI-SPL is moving forward with a balanced, competitively-positioned portfolio of audio visual and video products, design, build, and integration services and managed services. As the largest pro-AV systems integrator, we are dedicated to providing our customers with the strongest solution while building a culture of efficiency through technology.”

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I spoke with the CEO of AVI-SPL, John Zettel, today, and he fleshed out some of the logic. When I asked Zettel if this sale was more of a decision based on internal dynamics of their company or rather the result of some strong trend in the rental & staging market, he summed it up well.

“If you go back in history at this company”, said Zettel, “we were an entrepreneurial company. In down-turns, we found ways to survive, including getting into non-core markets like AV rentals. We then branched out to hotel AV, for the kind of contractual revenue that installed AV lacked back then.”

That was then. This is now. With the current boom in installed AV, and also the move in that market towards providing more managed services, the logic has shifted.

“We are proud of what our events services, and hotel divisions have done in the past fifteen years. We have a great live events division. But the live events division was significantly smaller than the installed AV division. So this is not us making a prediction about hotel AV rental business, for example. It’s more about us focusing on our core businesses, core competencies. And we see that as the industry is shifting to more complex solutions– more content, more digital signage for example, more companies will focus on core competencies.”

That’s a way of saying we’re in another AV boom, and that this boom also includes more recurring revenue opportunities. And while there’s also a boom on the rental & staging side of the fence– that part of the industry is smaller, in dollar sales, than the installed AV market. And that market is one where the AV providers are the end users– and that means a different business model.


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