- The Washington Times - Thursday, October 5, 2000

Potomac, Md.-based Phillips International Inc. is selling off its $110 million business-to-business media division to an affiliate of New York-based media merchant bank Veronis Suhler.

VS&A; Communications Partners III yesterday signed a definitive agreement to buy Phillips Business Information Inc. (PBI), which provides trade publications, business information services, conferences and trade shows to a variety of industries.

In addition, Hart Publications, a division of PBI that specializes in energy-industry publishing, is being sold to Chemical Week Associates, also affiliated with Veronis Suhler.

The deal, worth more than $100 million, does not include the sale of Phillips International's consumer division, Phillips Publishing Inc., which concentrates on consumer investment and health publishing.

PBI's 600 employees, including the 300 to 350 employees in Potomac, won't lose their jobs, company spokesman John Farley said. The management team will remain in place with the addition of a new chief executive officer not yet announced.

Thomas Phillips, president of Phillips International, will be the vice chairman of the company. Mr. Phillips could not be reached for comment.

Mr. Phillips originally put his entire company on the block in March 1998 in an effort to expand the company, Mr. Farley said. But the search for a buyer ended just six months later and the company remained independent.

However, VS&A; Communications has had its eye on Phillips' business-to business operations for three years because of the company's growth potential and the variety of markets it serves, said Jeffrey Stevenson, president and managing partner of VS&A; Communications, which is the buyout arm of Veronis Suhler.

"Phillips Business Information is a natural addition to VS&A; Communications Partners' family of portfolio companies," Mr. Stevenson said. "VS&A; Communications Partners will use the firm's significant resources in B2B trade magazines and trade shows and the business-information industry to expand upon the tremendous foundation PBI has built over the years."

PBI's major magazines and newsletters include Via Satellite, Communications Technology, Rotor & Wing and Defense Daily.

The key products of Hart Publications, which was bought by Phillips in 1991 and later integrated into PBI, include Hart's Oil & Gas Investor, Hart's Energy Markets and Hart's World Refining.

Mr. Phillips started the company in 1974 with the publication of consumer-oriented newsletters. The business expanded in 1977 to provide its first business-to-business publication, called Video News, which eventually grew into the PBI division.

In 1993, Phillips started Eagle Publishing, which provided public-policy publications. Eagle broke away from Phillips and became an independent company in the summer of 1999.

The company, without the PBI division, is expected to generate $250 million in revenues and has more than 500 employees. Phillips will remain focused on its consumer niche with Phillips Publishing Health Group and Phillips Publishing Wealth Group.

The health group produces consumer newsletters and on-line resources and includes Doctors' Preferred Inc., a vitamin and nutritional-supplement business. The wealth group produces newsletters, fax and e-mail services, Web sites and other investment resources. It also includes Investorplace.com, Fabian Investment Resources and Changewave.com.

Between those two divisions, more than 1.5 million people subscribe to the company's newsletters and on-line services.

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