Microphones audience members toss to each other like a ball. Colorful LED wristbands that light up for attendee surveys. Interactive video walls that help conference-goers choose which session or workshop they most want to attend. These and other tools are offered by PSAV, an audiovisual event specialist, to help meetings and events organizers engage with their audiences.

PSAV is used to having a backstage role. But it finds itself in the spotlight this month with the news it has been acquired by Blackstone, a private equity giant, on a bet that more and more hotels, universities, and others will abandon their internal event production services and outsource the work to specialists like PSAV.

Blackstone acquired the 9,000-employee PSAV from private equity firm Olympus Partners and affiliates of Goldman Sachs. It did not say how much it paid.

Over eight decades, Schiller Park, Ill.-based PSAV has grown through a series of acquisitions of regionally-based providers of audiovisual services. In the past year alone it has acquired Hargrove, Concise, and Hawthorn.

The acquisitions have fueled its growth. In 2014, it reported a revenue of $1.2 billion. Contrast that with 2016 — the last year it publicized its revenue — when it booked about $1.5 billion in revenue.

Much of this growth has been prominently in Canada, Mexico, the U.S., and the UK.

Failed IPO

PSAV has been tantalizing close to becoming the equivalent of a Cirque du Soleil breakout hit in the estimated $25 billion global market of event-specific technology services. However, it hasn’t broken through yet.

In 2016 PSAV tried to put together an initial public offering of $177 million, after having changed hands in 2013 — after being taken private in 2007.

It was too soon. The Blackstone deal this month officially called an end to the long-delayed IPO attempt.

The conventional wisdom is that new owner Blackstone will continue to fuel more acquisitions to enhance PSAV’s capabilities, increase the density of PSAV’s prevalence in local markets, and expand the scale of the vendor’s services.

The bet is that event tech is becoming a scale game.

Attendees accustomed to 3D blockbuster films, virtual reality devices, and other technological thrills are becoming more demanding in their expectations about the quality of event production. The rising demands have sparked an arms race in event sophistication.

By this logic, a perceived rising complexity in event technology services — and an associated spike in capital expenditure costs — may lead venues to look to hire specialist providers to provide glitzy special effects and interactive uses of video, sound, and staging.

A key risk is whether Blackstone will load up PSAV with debt, as private equity firms are prone to do. If it’s not careful, an economic crisis might appear and truncate business travel and the meetings business — making it hard for PSAV to service those debts. (Ask the unemployed workers of the recently bankrupt Toys ‘R’ Us chain for details.)

Another risk is that a pressure to drive up margins may be difficult to achieve as the company expands beyond the high-end market into so-called “long-tail” events where needs can be more basic — console speakers, mics, screens, projector — and less profitable.

On the bright side, a key opportunity for PSAV may be for an eventual merger between it and one of the giants of event management software providers, such as private equity-backedCvent/Lanyon, Fonteva, or Hubb — enabling a vertical integration of services.

Photo Credit: Shown here is an example of how PSAV staged an event at Canada's Fairmont Banff Springs Hotel. PSAV has been acquired by Blackstone, the private equity firm. PSAV