For family-owned book seller Follett, the math was simple, and the figures added up: Buying Baker & Taylor would boost its sales by almost 40 percent and strengthen its presence in a number of markets, from public libraries to foreign countries.
Follett, best known for selling books and other materials to schools, colleges, bookstores, students and K-12 libraries, on Monday announced what it said was the biggest deal in its 142-year history by buying Charlotte-based Baker & Taylor, a provider of books, video and music products to public libraries worldwide. The company employs 214 in Charlotte, a spokeswoman said.
Terms of the deal were not disclosed.
Baker & Taylor had been put up for sale by its New York-based private equity owner, Castle Harlan, which has owned the company since 2006. In a statement Monday, the company said it will continue to operate as it has been under the same management team.
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Follett, based in suburban Chicago, said the deal would boost its revenues from about $2.6 billion to $3.6 billion, make it a major player in public libraries and raise its profile outside of North America.
Ray Griffith, Follett chief executive, said that, before the deal, his company generated about 1 percent of its revenues outside of North America; in contrast, markets outside of North America make up almost a third of the sales of Baker & Taylor, which serves 120 countries, including the United Kingdom, Australia and New Zealand. Baker & Taylor also serves Southeast Asia and is starting to move into the Middle East.
George Coe, Baker & Taylor CEO, said the deal “brings together the two best teams in the public and school library sectors.”
Baker & Taylor serves public library systems in such cities as New York, San Diego and Los Angeles, Coe said.
Follett also operates more than 1,250 campus stores. Griffith said Follett’s sales for fiscal 2016 rose by 2 percent.
In the past year, Follett has bought five companies. Last year, it bought the retail division of Nebraska Book Co., boosting its portfolio of college bookstores by about 200.
The Nebraska retail deal came as the two oldest players in the college store business, Follett and Barnes & Noble, were battling Amazon for market share in the college retail market. Nebraska’s retail division had been losing money, the Chicgao Tribune reported when Follett announced that deal last year.
“We believe that we are the best operators of on- and off-campus bookstores in America, and we know how to do it,” Griffith said at the time, noting such services as buy-online-and-pick-up-in-store for college consumers in need of quick supplies. “We’re aware of Amazon and Barnes & Noble, but this is where we excel and we can connect.”
As of May 2015, Barnes & Noble’s B&N College arm operated 724 stores nationwide. That’s up from 647 at the beginning of fiscal 2013.
Nader Qaimari, president of Follett’s school solutions business, said Monday that, “while Amazon does compete in book sales, public and K-12 libraries require numerous services that Amazon does not offer, such as collection development, processing, consulting and library automation.” Follett offers such services, he said.
Also, when children check out ebooks from the school library, they’re likely using Follett technology to access and read the ebook, Follett spokesman Tom Kline said Monday.
In 2012, Follett sold certain assets of its Book Wholesalers unit to Baker & Taylor.
“Follett operated the relatively small Book Wholesalers public library business for nearly a decade, and sold it to Baker & Taylor because it didn’t have enough scale to grow in the segment,” Follett spokesman Kline said. “Purchasing Baker & Taylor gives Follett immediate scale with a leadership position in the public library business and customer relationships to support the business long term.”
Baker & Taylor has a service center in Momence, about 50 miles south of Chicago, that has about 600 workers. For now, no local layoffs are planned, Griffith said.
In the short term, no new jobs are expected to be created, either.
Follett has about 1,900 workers, including about 200 part-time, in the Chicago area. The Observer contributed.