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Academic Book Center, headquartered in Portland, OR, is the third largest distributor of English language books to universities, colleges, and public libraries worldwide. This "Old World" sector is undergoing rapid consolidation as a result of disintermediation. Increasingly, publishers are bypassing wholesalers and taking charge of their own distribution needs; libraries are negotiating smaller premiums from wholesalers, causing pressure on profit margins; and Internet-based book retailers are dramatically impacting the customer's perception of cost, ease of use, and speed of delivery. The universe of potential suitors for Academic Book Center was limited to only a handful of players within the "Old World" sector who were large enough to acquire the company. In order to achieve a high premium for the business it was imperative that we came to understand and express the possible synergies between the buyer and our client. We advised our client to approach the preferred buyer, Blackwell Ltd of Oxford, UK, with a ready-made management solution that would realize considerable synergies by merging the two businesses. Both parties realized that Academic Book Center's management team was the critical, strategic and tactical component in the deal that allowed Blackwell to reposition and restructure its own book distribution agency. As part of the transaction, the President and founder of Academic Book Center became President and CEO of Blackwell's Book Service and also became a member of the board of Blackwell Ltd. Since the closing of the transaction, Academic Book Center has become one of the most profitable divisions within the Blackwell Book Services family.
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Strategy Consulting | External Corporate Development | Mergers & Acquisitions | © 2003 Atlantic Accord |
This is an example of an
assignment in a market that might be questionable in the long term in view of industry
dynamics. Typically the prospective buyers are only a handful and they are competing in
the same space and facing the identical challenges as the seller. In such situations the
client business is no longer regarded as having much appeal or value as a standalone. Here
the challenge is to find other ways to establish the value paradigm, such as by finding a
buyer that exhibits exposures and weaknesses that may be filled by the client. Value now
becomes a highly subjective aspect that varies depending on the buyer's requirements. The
role as M&A advisor is to set the stage for constructive discussions with proper
"education" of both the seller and the buyer to the value aspects inherent in a
merger.