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Advanstar restructures, eliminates $385 million in debt

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Woodland Hills, Calif.—Advanstar Communications, which produces the MAGIC trade shows, announced Monday that it has reached an agreement with its lenders to eliminate about $385 million of its debt. In connection with this restructuring, Advanstar's principal stakeholders, including Anchorage Advisors and Veronis Suhler Stevenson, will inject $35 million of new capital into the company.

Veronis Suhler Stevenson acquired Advanstar for $1.1 bilion in 2007.

Industry observers estimated that Advanstar's debt had been in the range of $800 million to $900 million. Like most b-to-b media companies, Advanstar has suffered as b-to-b advertising pages have dropped about 30% industrywide this year.

“We appreciate the continuing support of Veronis Suhler Stevenson and the confidence in our business demonstrated by Anchorage Advisors,” Joe Loggia, Advanstar's CEO, said in a statement. “With a stronger capital structure, enhanced balance sheet and significant capital investment, our customers can be assured of our commitment to continuing to deliver innovating quality products and services for many years to come.”

Scott Troeller, a partner at Veronis Suhler Stevenson, said in a statement: “We believe that the rationalized capital structure achieved through this transaction combined with Advanstar's strong franchises in trade shows, conferences and publications will position the company for future success.”

Advanstar is only the most recent b-to-b media company to undergo some sort of restructuring of its balance sheet. Cygnus Business Media emerged from bankruptcy protection last week; and ALM, which had been acquired by Incisive Media in 2006, was spun off as a separate business again in a deal with Incisive's lenders.

“For companies that were acquired in the past four years with a high amount of leverage, they were going into this down economy when a lot of companies are off 30% in revenue, and they've been unable to serve the level of leverage that is on their companies,” said Reed Phillips, managing partner of media investment bank DeSilva & Phillips.

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