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Scholastic Close to Acquiring Grolier
Jim Milliot -- 4/17/00

Numerous sources close to the situation said last week that Scholastic was close to reaching an agreement with the French conglomerate Lagardere to acquire Grolier Inc. Lagardere has been shopping the children's book publisher since late last year (News, Nov. 29, 1999). Scholastic is believed to be offering $400 million for Grolier, which had sales of about $450 million and earnings before interest, taxes, depreciation and amortization of $45 million. Scholastic executives had no comment on the acquisition rumors.

If the deal g s through, Scholastic will have total revenues of about $1.8 billion, including approximately $1.5 billion in children's book sales. Grolier would be a good fit with Scholastic. Its direct mail-to home and e-commerce businesses, which are primarily focused on children up to age five, would complement Scholastic's own home continuity operations, which are aimed at children ages six through 12. In addition, Grolier's print and Internet-based reference businesses would give a dramatic boost to Scholastic's library business, and Grolier's trade book operations, which consist of Orchard Books, Children's Press and Franklin Watts, would fit well with Scholastic's trade units. The deal would also expand Scholastic's international operations, especially in the U.K., Canada and Southeast Asia, where the bulk of Grolier's overseas operations are located.

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