In a move that reflects its strategy to broaden its distribution channels, Reader™s Digest has reached an agreement to acquire Books Are Fun Ltd. for $380 million. Based in Fairfield, Iowa, Books Are Fun is a major display marketer of books and gifts with revenues projected to top $220 million in 1999. Books account for more than 90% of total sales.
The acquisition is expected to close in early October, after which Books Are Fun will remain in Iowa under its current management team headed by Earl Kaplan, who founded the company eight years ago.
Books Are Fun has more than 700 individual representatives who conduct book fairs and book display events at 30,000 companies and 80,000 schools nationwide. The company offers discounts ranging from 40% to 70% on titles in a wide variety of categories, including bestsellers, cookbooks, children™s storybooks, sports, nature and travel. Books Are Fun d s not do any publishing on its own but rather sells books from more than 150 publishers such as Random House, HarperCollins, Houghton Mifflin and Penguin Putnam as well as Reader™s Digest. The majority of its sales come from adult titles.
According to RD chairman Thomas O. Ryder, not only will Books Are Fun broaden the company™s distribution avenues for its own products, it will contribute directly to RD™s revenues and earnings. Ryder noted that Books Are Fun is in a high-margin business and has had steady double-digit growth since its inception.
RD hopes to be able to speed the growth of Books Are Fun through a number of synergistic programs, such as expanding Books Are Fun internationally through RD™s global infrastructure and using RD™s editorial archives to create new products that can be sold through Books Are Fun.
