Scholastic Agrees To Acquire Klutz

Klutz, the multimedia children's publisher, is about to change hands for the third time in less than two years, as Scholastic has reached an agreement to acquire the company from Corus Entertainment for an initial payment of $43 million. Corus acquired Klutz in fall 2000 as part of its purchase of Nelvana Ltd.; Nelvana originally bought Klutz in April 2000 for $74 million. As part of its agreement with Corus, Scholastic may make additional payments to Corus over the next three years depending on Klutz's performance.

Klutz, which has 57 full-time and 10 part-time employees, will continue to be based in Palo Alto, Calif., under the direction of president Chris Deyo. Founder John Cassidy will remain chief creative officer. Klutz will become part of Scholastic's children's book publishing and distribution division with Deyo reporting to division president Barbara Marcus.

Corus, which began looking for a buyer for Klutz late in 2001 (News, Nov. 26, 2001), was unable to successfully adapt Klutz's properties for use by its electronic media holdings. Klutz's core business also suffered in 2001 when some of its major retail customers went out of business. Sales for the fiscal year ended August 31, 2001, were about $39 million. In its last full year as an independent company in 1999, Klutz had sales of approximately $41.4 million. Scholastic chairman Dick Robinson said that in addition to selling the Klutz line to its retail accounts, Scholastic will make the titles available through its book fairs and book clubs. Klutz has a 150-title backlist and its titles include Juggling for the Complete Klutz, Cat's Cradle and Face Painting. Its spring list features five books and three other items.

In a personnel announcement, Scholastic appointed Neal Goff president of Scholastic Library Publishing. The division, which has annual revenues of more than $80 million, includes Grolier, Grolier Education, Grolier Reference, Grolier On-Line, Children's Press and Franklin Watts. Goff has held executive positions at a number of publishing companies, including R.R. Bowker, Prentice Hall Direct and Book-of-the-Month Club, and also worked for the Bertelsmann Music Group and R.R. Donnelley. He will be based in Danbury, Conn., and will report directly to Scholastic chairman Dick Robinson.