As reported in last week's FOLIO: M10 Alert, Advanstar Communications Inc. is in the process of selling off a large part of the company. Today Advanstar announced a definitive agreement to sell its Information Technology & Communications, Travel & Hospitality, Beauty, Home Entertainment, and Abilities and Portfolio groups for $185 million in cash to Questex Media Group, a new company founded by investment firm Audax Group and Kerry Gumas, vice president and general manager of Advanstar's Information Technology & Communications Group.
The groups being sold generated a combined $100 million for Advanstar in calendar year 2004. That leaves Advanstar with publishing and trade show operations in the Fashion, License, Motor Vehicle, Healthcare, Science and Pharmaceutical groups, which generated approximately $275 million combined in 2004. Advanstar will provide Questex with an operating platform as well as support services. Gumas will serve as President and CEO of Questex.
While Advanstar reported improved revenue growth in 2004 (driven in large part by the $135 million acquisition of Thomson's Medical Economics unit in 2003), the company cited beauty, technology and travel products as weak areas. Overall Advanstar revenue grew 23.3 percent to $378.1 million in 2004 while publications grew 39.4 percent to $206.1 million and trade show revenue increased 6.6 percent to $151.1, despite hosting five fewer events in beauty and technology.
With Advanstar's $185 million sale, 2005 is off to a fast start to break the pattern of small deals that have defined recent publishing M&As. The $380 million sale of real estate publisher Network Communications in January and the impending sales of F&W Publications and Hanley Wood (which could see bids over $500 million) could set the highest sales prices the industry has witnessed in years. There were seventeen publishing deals in first quarter of 2005 compared to 14 in same period for 2004, while the dollar value has doubled to $486 million, according to Whitestone Communications.
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Folio:M10alert.
Copyright April 4, 2005. http://www.foliomag.com/
