Tom Phillips sells investment advisory unit, closing the once giant Phillips International Inc.

Thomas L. Phillips stands prominently in the pantheon of subscription newsletter publishers. Beginning in 1974 with a $1,000 investment and two newsletters produced at home (Pink Sheet on the Left and The Retirement Letter), he built what became Phillips International Inc. through skilled marketing, timely launches, strategic acquisitions, and--in his words--hiring "bright, enthusiastic, aggressive and growable people." At its peak, PII enjoyed revenues in the hundreds of millions of dollars and published more than 100 consumer and b-to-b newsletters, magazines, directories, and online information services.

Tom is also widely known and respected for his role as one of the founders, in 1977, of what was originally called the Newsletter Association of America (now SIPA). He served as its president in the early 1980s, was honored as its Publisher of the Year in 1989, and five years later was the first person elected to the Newsletter Publishers Foundation Hall of Fame.

A multi-year divestiture

By the late 1990s, Phillips International Inc. consisted of three divisions:

* Phillips Publishing Inc., with dozens of consumer newsletters on personal health and investments;

* Phillips Business Information Inc., with b-to-b newsletters in the areas of media and electronic commerce, aviation and defense communications and satellite, cable, and finance;

* Eagle Publishing Inc., with public-policy publications with a conservative, free-enterprise focus.

In 1998 Phillips retained Goldman, Sachs & Co. "to explore future directions and strategic options for the firm" and "to solicit expressions of interest from other large corporations and financial organizations." Six months later, Phillips ended the arrangement.

In 2000, Phillips sold Phillips Business Information to two private equity affiliates of the New York-based Veronis, Suhler & Associates. At the time PBI posted revenues of $110 million. By then PPI had been divided into Phillips Health and Phillips Wealth.

In 2004, Phillips Health was sold to another two New York private equity firms, ACI Capital Co. Inc. and American Securities Capital Partners LLC. Revenues at the time were approximately $180 million.

Avista Capital Partners now buys Phillips Investment Resources

Phillips International Inc. recently reached an agreement to sell its last division, Phillips Investment Resources LLC (formerly Phillips Wealth) to Avista Capital Partners, a leading private equity firm with offices in New York City and Houston. The PIR staff, president John Coyle said, "will continue to lead the company, and the PIR staff will remain headquartered at the Rockville, Maryland, location."

PIR's 23 different subscription-based advisory services from 16 experts go to about 220,000 subscribers. The newsletters include Louis Navellier's Blue Chip Growth, Tobin Smith's ChangeWave Investing, Dan Wiener's The Independent Advisor for Vanguard Investors, and Richard Bland's Profitable Investing.

In the transaction, which is expected to close on January 31, 2007, The Jordan, Edmiston Group Inc. served as advisor and Shulman, Rogers, Gandel, Pordy & Ecker served as legal counsel to Phillips International Inc.

Avista Capital Partners is familiar to newsletter publishers as the buyer of Thompson Healthcare in 2004 and to the wider world as the new owner of The Star Tribune Company, publisher of the Minneapolis-St. Paul newspaper of that name.

James Finkelstein, an Industry Partner at Avista and prominent in the Thompson acquisition, also owns News Communications Inc.--publisher of The Hill, an influential newspaper in the U.S. political arena--in partnership with Hollinger International Inc., one of the world's largest newspaper chains chaired by Canadian-born Lord Conrad Black.

OhSang Kwon is also a Partner at Avista Capital Partners.

Phillips retains Eagle Publishing

So now Tom Phillips's once sprawling publishing empire consists of the two companies probably most dear to his heart

* Eagle Publishing Inc., publisher of Human Events. "The National Conservative Weekly," and five newsletters including Evans-Novak Political Report and Dr. Mark Skousen's four investment advisories.

* Regnery Publishing, a subsidiary of Eagle and publisher of conservative books--a number of which were influential in bringing about the impeachment of President Clinton. Regnery's Unfit for Command attacked Senator John Kerry's Vietnam War record during the 2004 U.S. presidential campaign.

Editor's note: At this printing, Tom Phillips was out of the country and unavailable. Our next issue will carry his own observations on his newsletter career and its latest trajectory.

Phillips Investment Resources, 9420 Key West Avenue, Rockville, MD 20850, 301-279-4200, fax [phone], www.phillips.com

Avista Capital Partners, 65 East 55th Street, 18th Floor, New York, NY 10022, 212-593-6900, fax [phone], www.avistacap.com

Eagle Publishing, One Massachusetts Ave., Washington, DC 20001, 202-216-0600, www.regnery.com