Nearshore Americas

Media Outsourcing: Advanstar Sacks Duluth in Favor of HCL Technologies


Woodland Hills, California-based Advanstar Communications—the trade publisher that reduced its debt by $385 million last fall—said Tuesday it has struck an agreement to outsource its production-related functions for the company’s magazines and directories to global IT services company HCL Technologies.

The agreement, Advanstar said, will result in the elimination of approximately 100 employees at its Duluth, Minnesota facility. Those staffers are expected to be offered temporary employment of at least four months with HCL and will be eligible to receive severance from Advanstar at the conclusion of their employment with HCL.

Advanstar will continue to employ roughly 75 people in Duluth, the company said.

According to Advanstar CEO Joe Loggia [pictured], the decision to outsource production was not “made lightly.” “Given the many challenges facing the business-to-business print industry, we must change the way we do business in order to continue to provide maximum value and service to our customers,” he said in a statement. “In this highly competitive media marketplace, we need to focus on the things that we do well, creating a valuable platform for our clients, while handling other functions through partnerships or outsourcing agreements that will provide the economies of scale we need to operate more efficiently.”

Last fall, Advanstar reached an agreement with its lenders to eliminate approximately $385 million in second lien and mezzanine debt. As of September, the company still carried $505 million in first lien debt. Its investors agreed to inject about $35 million of new capital into the company.

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Serving the fashion, life sciences and powersports industries, Advanstar was acquired in 2007 by a consortium led by private equity firm Veronis Suhler Stevenson for $1.1 billion. Today, hedge fund sponsor Anchorage Advisors is a majority stakeholder along with VSS.

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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