Veronis Suhler Stevenson acquires Advanstar; invests in MediZine.

Veronis Suhler Stevenson (VSS; New York), a private equity investor in the media, communications, information and education industries, has signed a definitive agreement to acquire Advanstar Communications, Inc. (New York/Cleveland, OH) from DLJ Merchant Banking Partners III LP, an investment fund operated by Credit Suisse First Boston, for $1.142 billion. VSS is joined in the investment by co-sponsors Citigroup Private Equity (New York) and New York Life Capital Partners (New York).

Advanstar produces a diversified portfolio of products serving both the trade and consumer markets. The company produces 87 international and regional trade shows and events, 58 publications and directories, 125 electronic publications and web sites, as well as educational and direct marketing products and services.

Advanstar currently operates eight main units in four vertical divisions. The Fashion unit (New York) produces the MAGIC and Project trade shows, online showrooms, directories and marketing services for the fashion and apparel industries while the License unit produces "License" and "License Europe" magazines, as well as two related trade shows and online products. The Powersports/Automotive unit is comprised of seven magazines, including "Aftermarket Business," "Motor Age" and "Dealer News," and produces related expositions, conferences and web sites, including the International Motorcycle Show tour.

Advanstar Medical Economics (Montvale, NJ) publishes 16 medical titles, including "Medical Economics," "Patient Care," "Contemporary OB/GYN," and "Drug Topics," while the company's Science unit publishes "LCGC" editions for North America, Europe and Asia-Pacific, "Spectroscopy" and buyer's guides and directories.

Advanstar's Dental unit (Northfield, IL) produces four titles, including "Dental Law Products," "Dental Practice Report," "Dental Products Report" and "Dental Products Report Europe." The company's Veterinary unit (Lenexa, KS) produces three magazines, including "DVM," "Veterinary Economics" and "Veterinary Medicine." Finally, the Pharmaceutical unit publishes eight titles, including "Applied Clinical Trials," "Pharmaceutical Executive" and "BioPharm International," and produces related conferences and forums. The unit also includes the Institute of Validation Technology (Duluth, MN), the publisher of "Journal of Validation Technology", "Journal of GXP Compliance," videos and conferences.

For the first nine months of 2006, Advanstar had revenues of $165.8 million, a 13.1% increase over the $146.6 million reported in the same period in 2005. The company lost $1.8 million in the first three quarters last year, compared to a gain of $21.7 million in the same period in 2005.

DLJ Merchant Banking Partners acquired Advanstar in August 2000 from Hellman & Friedman Capital Partners (San Francisco, CA) for $900 million in cash and the assumption of $520 million in debt. Since then, Advanstar has made numerous acquisitions, including: Brand Licensing London Show in 2000; "Motor Age" and related magazines in 2001; European Automotive category assets and "Salon News" in 2002; Medical Economics and "Cadance" magazine in 2003; the Institute of Validation Technology in 2004; and, three trade shows in 2005. In April 2005, Advanstar sold its Information Technology & Communications, Travel & Hospitality, Beauty, Home Entertainment, Abilities and Portfolio units to Questex Media, a company formed by Audax Group (New York) and former Advanstar executive Kerry Gumas, for $185 million in cash. Together, the acquired units generated approximately $100 million in revenue in 2004.

The deal will be financed with equity from VSS and its investment partners as well as debt, which has been committed by Credit Suisse and Barclays Capital. VSS also has major investments in b2b information companies Access Intelligence, Ascend Media, Hanley Wood, Canon Communications, Centaur Communications, The Official Information Company, International Media Partners and Facts on File.

In related news, VSS has made a "significant investment" in MediZine LLC (New York), a provider of patient education material. Established in 1994, MediZine publishes four health and wellness consumer magazines that are distributed in pharmacies and doctors' offices, as well as directly to consumers. They include "MediZine's Healthy Living," "Remedy," "Diabetes Focus" and "MDminute."