SOURCE: Simba Information

Simba Information

October 05, 2010 15:24 ET

Simba Analyst Investigates Thompson Publishing's Chapter 11 Filing

STAMFORD, CT--(Marketwire - October 5, 2010) -  Thompson Publishing Group (Washington), whose publications focus on regulatory compliance advice for professionals, this month filed for Chapter 11 bankruptcy protection as a result of the poor economy and having to compete against more free content available online, reports Simba.

Thompson, which employs 282 people, listed debt between $100 million and $500 million and assets between $10 million and $50 million in Chapter 11 documents filed in U.S. Bankruptcy Court in Wilmington, Del. Six affiliates also filed for bankruptcy.

Thompson has an agreement with PNC Bank to act as the stalking-horse to buy substantially all of its assets for an undisclosed price. PNC will also provide the company with as much as $3 million to help fund its operations while in bankruptcy. A stalking-horse is an initial bidder for a company in a bankruptcy, although it is usually expected that a higher bidder will step forward.

Thompson claims it has more than 70,000 subscribers and posted $56.7 million in sales last year, but expects that number to fall 13.6% to $49 million this year.

The company said a relative lack of new regulations in recent years led to declining interest in Thompson's publications. The company's stock and trade has been looseleaf and newsletter publishing, two formats which have seen better days. Customers who rely on updated regulatory information have flocked to electronic resources which don't require the back office staff to organize and maintain print updates.

"For me, it's a tough sell for Thompson to say that part of the reason they've declared bankruptcy is that the pace of new government regulation has slowed in a year when we've seen the Fed be so active passing new health and financial laws," says Dan Strempel, Senior Analyst for Simba Information. "The competition from free Internet sources is a more serious problem for them. Chapter 11 is a chance to reorganize. The market for this information is there, but Thompson needs a new model for electronic distribution to move beyond loose leafs, as it seems many of its customers already have."

Thompson is owned by Avista Capital Partners, a private equity firm which bought a 50% percent stake in the company for $130 million in 2006. Another holder of Thompson's equity is James Finkelstein, one of Avista's founding partners and founder of The National Law Journal.

Ongoing analysis and exclusive insight into the professional publishing world can be found in the "Professional Content Report Newsletter" at http://www.simbainformation.com/redirect.asp?progid=79719&url=http://www.professionalcontentreport.com/content/thompson-publishing-files-chapter-11

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