Veronis Suhler Property Is Closed By Bank

A Veronis Suhler Stevenson-backed publisher in Chicago has dismissed its staff and shuttered its U.S. operations after its bank cut off its credit, the company’s president told Buyouts.

Schofield Media Group LLC told employees on July 18 that they were out of work, said Brian Reshefsky, group president. The shutdown affects more than 200 workers in the United States and closes some 25 business-to-business titles in a variety of industries, from Inside Healthcare to Manufacturing Today and Beverage World Magazine.

In addition to its Chicago headquarters, the company had offices in New York, Boston and Bainbridge Island, Wash. The company’s British operations, including 10 additional publications and 100-plus employees, are not affected by the U.S. closure.

Entrepreneur Andrew Schofield founded Schofield Media in 1999 with the U.K. launch of its first title, Venture Magazine. It launched its first U.S. title, U.S. Business Review, in 2000.

Veronis Suhler Stevenson invested in Schofield Media in April 2005, committing $7 million of subordinated debt from its VSS Mezzanine Partners LP fund to help finance the company’s purchase of four B-to-B magazines from VNU Business Media Inc. and for working capital.

“Schofield Media is an excellent company with a talented management team that has been able to build an international business-to-business company that exhibits strong growth characteristics and generates excellent cash flow. We are excited by the opportunity to help finance the strategic growth of Schofield Media as they look to capitalize on attractive investment opportunities in the business-to-business sector,” said George L. Cole, co-manager of the fund, in a press release that VSS put out at the time of the investment.

Schofield Media went on to make a series of other acquisitions in the years that followed: SB Communications, a publisher of medical journals, in 2006; CTQ Media, a publisher of Web sites and magazines dedicated to Six Sigma and quality management, HealthComm UK, a health care communications business, and Health and Safety Monitor, all in 2008; and Medical Education Partnership Ltd in 2009.

Wells Fargo & Co. provided the company with its senior financing, and Schofield Media had been in talks with Wells Fargo for more than a year about refinancing the debt or even selling all or part of the business, said Reshefsky, who had worked for Veronis Suhler Stevenson as an associate from 2003 to 2006. Reshefsky joined Schofield Media in 2006 and was named group president and COO in 2009.

The European business was not a Wells Fargo borrower, he said. But it was unclear whether Veronis Suhler Stevenson would remain as a stakeholder in the surviving operation. The 2005 announcement had said the firm was investing in a parent holding company, Ideal Media, which included Schofield Media Ltd, the British business. But the Schofield Media LLC Web site identified it as the parent and Ideal as a division. Reshefsky said he did not know of a claim that VSS would have on Schofield Media Ltd. Representatives of the firm did not have an answer by deadline.

Reshefsky said he did not understand the bank’s sudden decision to cut off the company’s credit. “We were cash flow positive,” he said. “We were paying it down every month. They just didn’t want to be in the credit.”