Rautenstrauch to Leave AMS; B&T Deal Closed

by Jim Milliot -- Publishers Weekly, 3/20/2007

The completion of the sale of AMS’s wholesaling assets to Baker & Taylor brought good news and bad to AMS CEO Gary Rautenstrauch. With the deal done, Rautenstrauch was eligible to receive 70% of a bonus tied to the closing of the purchase, but it also meant that Rautenstrauch was out of a job since AMS intended to terminate Rautenstrauch when the deal was completed. No one at AMS was available to comment on whether Rautenstrauch has indeed left.

With its acquisition completed, B&T has formed Baker & Taylor Marketing Services to ship product to the warehouse clubs, which it began doing yesterday. B&T also acquired AMS’s distribution operations in the U.K. and Mexico.

The B&T deal did not include inventory that AMS had used to fill orders to the clubs. According to a court hearing last week, there remains about $40 million in old inventory left. An attorney for AMS said at the hearing that the company was close to working out a book returns program with publishers to return the inventory.

In addition to old inventory, there remains about $50 million in accounts receivables at AMS plus about $20 million in inventory from AMS’s proprietary publishing group, APG; B&T acquired about one-third of the APG inventory. AMS is in the process of collecting the receivables and is looking for a buyer for the APG inventory.