Tom Phillips: $1,000 + 26 years = $400 million.

In 1974, Tom Phillips started with a $1,000 investment, three employees and two newsletters and built it into a nearly $400 million diversified publishing and information company called Phillips International Inc., with headquarters in Potomac, Md.

He was one of 17 publishers who pledged $300 for three years to start the Newsletter Publishers Association back in 1976. Without a doubt he is the most financially successful of that group.

This week, like some of the entrepreneurial newsletter publishers of the '70s, Tom began to cash in his chips with the sale of PII's b-to-b division, Phillips Business Information, to two equity partners of Veronis Suhler. One big difference between Tom and the other independent newsletter publishers of that era is that Tom has a lot more chips.

Even with the expected sale of its b-to-b division, Phillips International is still a $250 million company, with its Health Group generating close to $160 million in revenue and its Wealth Group generating another $90 million.

The Wealth Group publishes more than 15 investment newsletters, including one of the first publications started 26 years ago by Tom, The Retirement Letter, and John Dessauer's Investor's World, which reaches more than 100,000 subscribers. And last year the Wealth Group began launching consumer web sites to complement its products.

Tom took his first look at perhaps selling PII back in March of 1998 when Goldman, Sachs & Co. was retained to "explore future directions and strategic options for the firm" and to "solicit expressions of interest from other large corporations and and financial organizations."

Six months later it was announced that the company "would remain independent" with the possibility that it might eventually go public with an IPO.

One knowledgeable publishing broker indicated that some buyers might have shied away from PII because of its vitamin and nutritional supplement business and that if this aspect of PII were spun off the company might be more attractive to investors.

The Health Group publishes four health newsletters, including Dr. Julian Whitaker's Health & Healing, which reaches 500,000 subscribers every month.

Surprisingly, the big revenue generator for this diversified publishing and information company in recent years has been its vitamins and nutritional supplementary products, operated under the subsidiary Doctors' Preferred, which was started in 1993. This business alone brings in more than $100 million in sales.

Last November, PII announced that it was spinning off its consumer health newsletters and the nutritional supplement and vitamin business. At the time the name of the anticipated buyer was not announced.

After months of negotiations the deal was aborted last April when PII asserted that the buyer had failed to make a cash payment of $10 million on a timely basis. The buyer was identified as Your Health, a New York-based, privately held company founded and majority-owned by Mark Fox through the Fox Group.

During the past 12 months there has been some turmoil as a number of key executives of PII and its subsidiaries have left. Further, during the past few years Tom has experienced personal woes with the dissolution of his long-time marriage.

The first split off from PII came in July of last year when Eagle Publishing, a subsidiary, was spun off as an independent company. Tom, noted for his conservative views and philosophy, became chairman and Jeffrey J. Carneal its president.

Eagle's cornerstone publications are the 1944-founded Human Events, which provides news and analysis from a conservative viewpoint, and the Evan & Novak Political Report.

Also part of Eagle is Regnery Publishing, which has published many of the seminal works of the current conservative movement, including Conservative Mind by Russell Kirk. It has also teamed with more controversial authors such as Los Angeles police detective Mark Furman, who wrote about his part in the O.J. Simpson trial.