August 21, 2013 Last Updated 12:23 pm

Source Interlink reaches agreement with stakeholders to recapitalize the company

Press release:

NEW YORK–Source Interlink Companies, a leader in content development, multi-media publishing and retail sales and logistics, announced today that it has reached a fully consensual agreement with its stakeholders to recapitalize the company. The new capital structure significantly deleverages the two Source businesses, Source Interlink Media and Source Interlink Distribution, and provides for enhanced liquidity that will enable each to pursue the corporate growth strategies that already are generating considerable momentum in today’s evolving marketplace.

“The tremendously improved capital structure will provide both Source Interlink Media and Source Interlink Distribution with the ability to maximize transformational opportunities across their respective industries,” said Michael L. Sullivan, president and chief executive officer of Source Interlink Companies. “This transaction will put both businesses in better positions to strengthen strategic partnerships and make investments to enhance their position in their respective industries.”

Source Interlink Media (SIM) is a multi-platform media organization whose portfolio includes some of the largest and most well-known automotive and outdoor lifestyle brands, including Motor Trend, Automobile, Hot Rod, Surfer and Baseball America. It has developed an unrivaled expertise in generating content for enthusiast audiences while at the same time establishing a profitable digital business that is experiencing rapid growth across social, mobile and video platforms. The company has succeeded in reaching beyond the pages of the traditional magazine format to deliver powerful and unique content via online experiences, live events, apps, custom digital media and more. This multi-platform offering immerses enthusiast audiences in a total brand experience.

“This transaction will allow our media group to enhance its market leading capabilities in content creation and to expand its ability to deliver across other emerging platforms. It will provide additional momentum as our team continues to build upon its recent success, such as topping 1.6 million subscribers on our Motor Trend YouTube channel,” added Sullivan.

Source Interlink Distribution (SID), recognized as the industry leader in customer service and innovation as well as the only national periodical distribution enterprise, is transforming its traditional distribution business into a market-leading sales, service and logistics company, offering innovation, insight and expertise to its retail customers. As a retail solutions provider, SID’s portfolio of offerings includes an extensive distribution network, front-end display manufacturing, in-store merchandising services, and sales and marketing support.

The new financial structure will allow SID to continue expanding market share, as evidenced by several recent new contracts with major retailers, and to accelerate the drive toward transforming its business. In addition to securing these new contracts to distribute periodicals, with its proven ability to provide nation-wide services, SID has developed agreements with other major consumer product manufacturers to provide sales and marketing, distribution and in-store merchandising services.

As part of the recapitalization, GoldenTree Asset Management is increasing its ownership of both businesses in order to support Source’s next phase of growth. GoldenTree has been a significant stakeholder for years and is dedicated to the long-term success of both businesses. With approximately $18 billion in assets under management, GoldenTree is one of the largest independent asset managers specializing in corporate credit markets.

“The fact that GoldenTree has increased its support for both businesses is a strong vote of confidence in our future,” Sullivan commented.

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