F&W Publications Acquires Adams Media

With the book market soft, there has been a dearth of mergers and acquisitions so far this year, but that may be changing. Following the sale of Baker & Taylor earlier this month, F&W Publications has announced its purchase of Adams Media Corp., while the Quarto Corp. has confirmed that it has received an expression of interest from a potential buyer.

F&W's purchase of Adams is the most recent bid by former Macmillan and Primedia executive William Reilly, who took control of F&W last year, to build a significant book and magazine publishing company. The addition of Adams, which had estimated sales of about $22 million and an operating margin of about 20%, brings total sales at F&W to approximately $250 million, with book sales generating an estimated $130 million. Executives had no comment on reports that F&W paid around $35 million for Adams, but F&W president Steve Kent said Adams was a solidly profitable company that has had steady growth.

Adams, which will remain based in Avon, Mass., publishes 140 new titles annually and has a backlist of 700 titles. Adams will become a division of F&W, and day-to-day activities will be overseen by Scott Watrous, Adams's chief operating officer. He will report to William Budge Wallis, F&W's book division president. Company founder Bob Adams will become a consultant, and all 70 Adams employees, including the sales force, have been asked to remain with the company. Kent said the Adams name will also be retained. "We feel the name has developed some equity, so we plan to keep it," he said.

Adams is best known for its nonfiction series on such topics as business, cooking, health, home improvement, New Age, self-help and travel. Its bestselling series is the Everything series—more than 180 books covering a range of how-to topics. Other series that do well include Streetwise, Cup of Comfort, Small Miracles and Knock 'em Dead. With the addition of Adams, F&W's book group will now publish about 600 new titles annually and have a backlist of nearly 3,000.

The London-based publisher and packager Quarto issued a carefully worded statement July 9 that said "it is considering an approach made to it which, subject to certain significant preconditions, might lead to an offer being made for the company." Quarto made the announcement in reaction to reports in the British press that JO Hambro Capital Management is preparing to make an offer for the company. The speculation has resulted in a steady increase in Quarto's stock price. Hambro, which owns 27% of Quarto's stock, had no comment on the rumors. According to reports, if Hambro is successful in its acquisition bid, it will take Quarto private.

Quarto had sales of £74.7 million ($119 million) in 2002; a significant portion of its revenue is generated in the U.S. Its American properties include Book Sales, Fairwinds and Rockport. Company chairman Laurence Orbach had said earlier this year that Quarto itself was in position to make a "serious acquisition" this year.