MAGIC Parent Agrees to $1.14B Sale

NEW YORK – DLJ Merchant Banking Partners III (DLJMB) has agreed to sell Advanstar Holdings Corp., the holding company for Advanstar Communications and the parent of MAGIC, to an investor group led by private equity firm Veronis Suhler Stevenson for $1.142 billion in cash.

Citigroup Private Equity and New York Life Capital Partners are co-sponsors with VSS, which specializes in investments in companies in the media, communications and information industries.

Advanstar’s fashion properties include MAGIC, WWDMAGIC, MAGICKids, Sourcing Zone, Project and Pool. It also operates trade shows, publishes magazines and maintains Web sites in the licensing, life sciences and power sports and automotive markets.

Upon completion of the deal, Joe Loggia, chief executive officer of Advanstar, and other members of senior management will be granted equity interests in the investor group. DLJMB has approved the transaction, which is subject to standard conditions but is expected to close during the second quarter of this year.

“We are extremely pleased with this transaction, which reflects the success of our strategy and the quality of our industry leading products that, combined with our strong growth record, have created a solid platform for the future,” Loggia said in a statement. “The capital resources provided by VSS, Citigroup Private Equity and New York Life Capital Partners, together with VSS’ media expertise and network of industry contacts will further fuel the Company’s prospects. They will be a valuable addition to our team as we continue to execute our strategy and capitalize on additional growth opportunities to take Advanstar to the next level.”

OhSang Kwon, a board member of Advanstar since 2000, added, “Joe and his team have achieved great success for DLJMB through many years of hard work and diligent management at Advanstar. We wish him and his new partners every bit of success in their future.”

Scott Troeller, partner at VSS, said, “We are very pleased to be partnering with Advanstar’s management team led by Joe Loggia to further develop the company’s product lines. Since taking the helm of the company in 2004, Joe has restructured and refocused Advanstar around growing verticals to deliver market-leading organic growth and profitability.”

As part of the deal, Advanstar will commence a tender offer and consent solicitation for its 15% senior discount notes, 12% senior subordinated notes and 10 ¾% senior priority senior secured notes. These are expected to be finalized as the acquisition is closed, but Advanstar stated that completion is not required for the closing. Advanstar’s senior credit facility will be refinanced at closing, and Advanstar’s outstanding warrants will be converted in the right to receive cash based on shares underlying the warrants.

DLJMB is affiliated with Credit Suisse, which advised Advanstar on the transaction. Davis Polk & Wardwell served as legal counsel.

VSS funds have invested in more than 50 companies which have in turn been supplemented by 220 acquisitions. Realized and unrealized enterprise value of VSS assets is approximately $11 billion.

Advanstar, previously known as Edgell Communications, was purchased by Hellman and Friedman Capital Partners for a reported $237 million in 1996. Two years later, the company bought MAGIC International, previously owned by a partnership of West Coast men’s wear manufacturers, for just slightly less, $234 million. In 2000, DLJMB bought the company and, while the financial details weren’t divulged, published reports put the price at $900 million in cash and securities and $520 million in assumed debt.