AMS Makes Two Acquisitions
Jim Milliot -- 9/4/00
Advanced Marketing Services continued its acquisitive ways in August, agreeing to acquire two companies. The larger of the two deals was the purchase of Aspen Book Marketing, a U.K. specialty distributor that is the exclusive distributor of books to the 350 Safeway grocery stores located throughout the U.K. The purchase marks AMS's entry into the U.K. grocery chain market.
While AMS executives expect to integrate various aspects of Aspen into its existing U.K. operations, David Goss, managing director of Aspen, will remain with the new AMS subsidiary and will oversee the relationship with Safeway. The company had revenues of about $12 million in its last fiscal year.
Earlier in August, AMS paid $2.2 million to acquire Uncle John's Bathroom Reader, a series of "infotainment" books. Founded 12 years ago, the annual publication has sold more than two million copies, including more than 400,000 in 1999. The series, which will become part of AMS's new Portable Press imprint, is sold mainly through mass market outlets. The readers were previously distributed through a third party, but AMS's Advantage Publishing Group will now assume distribution of all new titles and all but the first four titles on the backlist.
The Aspen and Uncle John's purchases are the third and fourth acquisitions AMS has made in the last 12 months. The company's two previous acquisitions, Bookwise International and Raincoast Books, helped to boost sales by 13.3% in AMS's first quarter to $148.2 million. Net income in the period ended July 1, 2000, jumped 20.8% to $3 million. AMS said the sales growth was led by shipments in the juvenile, basic and mass market categories; a drop in the return rate to 18% from 24% helped to improve profits. During the quarter, sales to U.S. accounts were $137.9 million, while international revenues added $10.2 million, led by sales of $8.7 million in the U.K.
Volume 246 Issue 36 09/04/2000