New York, December 05, 2012 -- Moody's Investors Service changed the ratings outlook for Penton Business Media Holdings, Inc. ("Penton") to positive from stable based on the company's improving credit profile. Penton's Caa1 corporate family rating (CFR) along with all other ratings were affirmed.

The outlook action was prompted by the recent acquisition of Farm Progress. Since the acquisition multiple was lower than Penton's prevailing leverage multiple, Penton's leverage improves. In addition, Moody's expects additional de-leveraging to result since the acquisition will accelerate ongoing cost reduction activities.

Moody's has taken the following rating actions:

.Issuer: Penton Business Media Holdings, Inc.

..Outlook, Changed to Positive from Stable

..Corporate Family Rating, Affirmed at Caa1

..Probability of Default Rating, Affirmed at Caa1

..Senior Secured Bank Credit Facility, Affirmed at Caa1

RATINGS RATIONALE

Penton's Caa1 corporate family rating reflects its high leverage and related refinance risks, cyclical business profile, small scale and the long term pressure on the company's print media segment. Near 30% EBITDA margins combined with low capital intensity should allow Penton to de-lever, with small, accredtive acquisitions and further cost-cutting augmenting de-leveraging so that Debt/EBITDA declines towards mid 6x (Moody's adjusted) by mid 2014. However, the rating is constrained by refinance risk as Penton's $622 million term loan matures in August, 2014. Until a refinance is executed, elevated default prospects will weigh against the rating. Additionally, Penton's current debt incurs a below market interest rate that would inevitably rise upon refinancing and pressure free cash flow.

Penton's operations have dramatically improved since the 2008/2009 recessionary downturn with higher margins and a stabilization of revenues. The company is showing growth in its digital media and events segments which offsets declining print revenues. Moody's expects this trend to continue, resulting in approximately flat revenues for the next two to three years, excluding acquisitions. Penton has also improved profitability through cost cutting and the favorable impact of a higher mix of digital product sales, with EBITDA margin (Moody's adjusted) expanding to approximately 28% towards the end of 2012 from 18% in 2009. The company has been generating positive free cash flow of over $40 million per year since the end of 2011 after unfavorable interest rate swaps rolled off.

Penton's strategy includes directing excess free cash to small acquisitions. The company's recent acquisition of Farm Progress will add meaningfully to EBITDA in 2013. Penton financed the acquisition with a mix of cash and borrowings on the revolver which are expected to be repaid during 2013. The Farm Progress acquisition should rreduce leverage by approximately 0.5x after merger synergies are realized and the revolver debt is repaid.

The positive outlook reflects Moody's expectation that Penton will continue to grow EBITDA through cost cutting and small acquisitions such that Moody's adjusted leverage would fall towards the low 6x range by mid 2014, which would improve the company's prospects to successfully refinance maturing debt. However, as the maturity approaches, the outlook could be lowered if the company does not refinance.

Moody's could raise Penton's ratings if the company proactively addresses its 2014 maturity and is able to reduce leverage below 6x while maintaining strong positive free cash flow. Additionally, a rating upgrade would be predicated on Penton maintaining stable margins and solid liquidity.

Moody's could lower Penton's ratings if the company's revenues decline materially due to an acceleration of digital/internet media substitution or due to a weaker than expected economy, if free cash flow weakens, margins decline, if the company's liquidity becomes strained or if a term loan refinance is not executed in a timely manner.

The principal methodology used in rating Penton Business Media Holdings was the Global Publishing Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Penton Business Media Holding, Inc. ("Penton"), headquartered in New York, NY, is a diversified business-to-business media company providing products that deliver proprietary business information and services to owners, operators, managers and professionals across 16 markets. Revenue for the twelve months ended September 30, 2012 was $307 million.

REGULATORY DISCLOSURES

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Mark StoddenAsst Vice President - Analyst Corporate Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653John Diaz MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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