Advanstar Communications late Monday said it reached an agreement with its lenders to eliminate approximately $385 million in debt.
Also as part of the restructuring, Advanstar’s primary stakeholders—private equity firms Veronis Suhler Stevenson and Anchorage Advisors—agreed to inject $35 million in new capital into the company.
Details of the new ownership structure, or of any other changes at Advanstar, were not immediately clear. A spokesperson representing the company did not immediately return a request for comment.
(Earlier this month, b-to-b blogger and consultant Paul Conley reported via Twitter that Advanstar had experienced a round of layoffs, although he didn’t know how many.)
"This basically sounds like a classic cram down of the second lien holders with $35 million of cash in exchange for $385 of debt, or less than ten cents on the dollar," one M&A observer told FOLIO:. "It’s a good move by VSS to restructure highly distressed debt with new capital. The question, though, is about the terms on the Anchorage Advisors new capital and how much equity they get for it. Presumably this is structured as preferred equity with a big coupon attached."
According to Advanstar CEO Joe Loggia, the restructuring marks a “milestone” for the company. “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,” he 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,” said Scott Troeller, a partner with VSS.
Based in Woodland Hills, California, Advanstar was acquired by a consortium of lenders led by VSS in 2007 for $1.1 billion. The company publishes nearly 70 publications, 267 electronic products and Web sites, and produces nearly 150 events serving the fashion, life sciences and powersports markets.
Advanstar was represented by financial advisor Miller Buckfire & Co. and by legal advisors Proskauer Rose. Advanstar’s ad hoc committee of second lien term loan lenders were represented by Milbank, Tweed, Hadley & McCloy.
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