Advanstar Restructures $385 Million Debt and Gets $35 Million Infusion of Capital

DARLENE GUDEA, PUBLISHER & EDITOR
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Woodland Hills, CA – Advanstar Communications reached an agreement with its lenders late Monday night to eliminate about $385 million of debt. As part of the restructuring, Advanstar will also receive roughly $35 million in new capital from its principal stakeholders, including Anchorage Advisors and Veronis Suhler Stevenson (VSS). Well-placed sources said there is no preferred equity and no coupon payment. Advanstar continues to hold about $505 million of first lien debt.

Veronis Suhler Stevenson and co-sponsors Citigroup Private Equity and New York Life Capital Partners acquired Advanstar for $1.142 billion in cash in 2007. “The media industry has changed dramatically since VSS bought Advanstar,” CEO Joe Loggia told Trade Show Executive. “There are fundamental changes beyond the recession and decline in print ad revenues.” Loggia emphasized the capital structure is the outcome of the strategic plan, not the opposite. “The restructuring follows the development of a strategic plan to reinvent our business and gives us the flexibility to capitalize on the additional growth opportunities ahead of us.”

Loggia said the transaction is an important milestone for Advanstar. “It eliminates our second lien debt and mezzanine debt which translates into more flexibility. With a stronger capital structure, enhanced balance sheet and significant capital investment, we can pursue where we believe the opportunities in the market are.” Loggia would not provide any details of the strategic plan or when it would be disclosed.

When asked if Advanstar’s new strategy includes add-on acquisitions to its current franchises or brands in new sectors, Loggia said, “We have market-leading brands in the fashion, licensing, motorcycle and veterinary sectors. These will remain a major focus for us and we will implement a strategy to reinvent our magazine business.”

He said the biggest challenge Advanstar faces is no different than the cards that have been dealt to other media companies and businesses in general: broadly speaking, each company today must deliver value to customers in a way that meets their changing needs.

Advanstar is one of several media companies implementing a restructuring plan. Cygnus Business Media emerged from bankruptcy protection last week. Loggia said Advanstar was very fortunate to have a very supportive group of equity sponsors and lender sponsors to rebuild the capital structure.

Miller Buckfire & Co., LLC was Advanstar’s financial advisor and Proskauer Rose LLP served as legal counsel. Milbank, Tweed, Hadley & McCloy LLP served as counsel to an ad hoc committee of Second Lien Term Loan Lenders.

Advanstar Communications, Inc. serves the fashion, life sciences, medical and power sports industries. Its portfolio of 147 events includes the flagship MAGIC Marketplace which last week won Trade Show Executive’s Gold Grand Award for “Largest Semi-Annual Show.” The company  also publishes 68 publications and directories and 267 electronic products and websites.

Reach Joe Loggia at (818) 593-5000 or jloggia@advanstar.com