Questex files for bankruptcy protection

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Newton, Mass.—Questex Media Group Holdings on Monday became the latest b-to-b publisher to announce a bankruptcy filing or restructuring.

Questex, which publishes Travel Agent and other travel and hotel industry brands, said it had filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the District of Delaware. The company said it has reached an agreement with its senior lenders and is implementing a restructuring to reduce its debt and strengthen its capital structure pursuant to a Section 363 sale process.

Under the terms of the agreement, a group of the company's senior lenders is expected to enter into an agreement to serve as the stalking horse for a purchase of substantially all the assets of the company pursuant to a 363 sale. The company and its financial stakeholders expect to complete the sale process within two months.

Questex said financing is in place to keep the business operating and that its current management team, led by CEO Kerry Gumas, will remain in place. “We are pleased with the strong support we have received from our lenders and business partners for a restructuring that will allow us to reduce our debt and achieve a strong, sustainable capital structure,” Gumas said in a statement.

Questex was formed in 2005 when Gumas teamed with private equity company Audax Group to acquire several market clusters from Advanstar for $185 million. Advanstar, producer of the MAGIC trade shows, is one of a number of b-to-b media companies that have announced a major restructuring in recent months.

Cygnus Business Media recently emerged from Chapter 11 bankruptcy protection. ALM Media recently was split from its parent company, Incisive Media, as the company's lenders restructured to find a more workable capital structure.

Industry observers anticipate that many more b-to-b media companies will undergo similar restructurings or bankruptcy proceedings as the economy—which has hit advertising-supported businesses especially hard—has made many balance sheets untenable. These companies simply cannot service the debt that was placed on them when they were acquired with significant leverage during an era when the future seemed much brighter for b-to-b media.

“Look at any company [in b-to-b media] that has been bought during the last three to four years,” said one industry observer who spoke on condition of anonymity. “They're all going to do it: restructure or bankruptcy.”

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