Sydney 4 September, 2008
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Listed printing and media services company PMP Limited (ASX:PMP) today announced that it had entered into an agreement to acquire 100% of book distribution company, The Scribo Group Pty Ltd (Scribo), via Gordon and Gotch Australia Pty Ltd (GGA).
Scribo was formed as Australasia’s largest independent book distribution and wholesale company in February 2008, following the merger of leading independent book distributors Tower, Gary Allen, Brumby and Bookwise.
Scribo will run as a business within GGA and its directors Gary Cobbledick, Michael Rakusin and Dale Druckman will remain with the Group. In addition, its operating businesses will retain their own names, identities and publisher lists and Scribo will continue to maintain offices in Sydney, Melbourne and Adelaide.
Commenting on the reasons for selling the business to Gordon and Gotch, Gary Cobbledick said: “Gordon and Gotch has the financial firepower to deliver on the Scribo vision, which is to consolidate and integrate our existing four distribution businesses into one highly efficient operation, powered by industry leading I.T. systems and supported by a state-of-the-art warehousing and distribution centre. The level of capital investment required to deliver on this vision was beyond the financial capabilities of the original Scribo shareholders, especially in the current credit climate, and that is one of the main reasons why we decided to sell the company.”
The acquisition expands GGA’s distribution offering and enables it to enter the book industry – a key element of GGA’s long-term strategic plans.
The Scribo acquisition brings the following benefits to PMP and GGA:
• Expanding GGA’s service offering from magazines to books;
• Introducing a new set of retailers to the GGA network;
• Expanding the reach of GGA’s retail network;
• Increasing the product range for GGA with limited risk of revenue loss from existing lines;
• Provides steady revenue stream, reducing the cyclicality of GGA business
• Expanding Scribo’s customer service offering to publishing clients of PMP’s Griffin Press Book Printing business.
For Scribo, the GGA acquisition means that it will have the financial resources and support to continue to build as the premier independent book distribution company in Australia.
Managing Director of Gordon and Gotch Australia, Craig Davison, said:
“We have a long-term commitment to the book distribution industry and look forward to growing the business further, improving its service offering in the years ahead through significant capital investment in new infrastructure and systems.”
“Scribo distributes over 40,000 titles, including a number of best sellers such as 4 Ingredients, Rich Dad Poor Dad, Underbelly: The Gangland War and last year’s winner of the Miles Franklin Award, Carpentaria. In the past 12 months, Scribo has had two of the top 10 titles in The Sydney Morning Herald’s best sellers list.”
“Importantly, Scribo brings valuable synergies, networks and capabilities to Gordon and Gotch. We look forward to expanding Gordon and Gotch’s service offering to domestic and international customers through Scribo’s impressive network of publishers and retailers around the world,” said Mr Davison.
Chief Executive Officer of PMP, Brian Evans, said that the transaction follows the $80 million acquisition of Times Printers late last year and represented a natural and logical extension for Gordon and Gotch into book distribution services. “The commercial logic and synergies underpinning this deal are compelling. The skills and knowledge in the GGA business are readily applied to driving the Scribo business forward.”
Chief Executive Officer of The Scribo Group, Gary Cobbledick, commented that the business had significant growth prospects. “In Gordon and Gotch we see an owner with an operational skill set that can add real value to the Scribo business, particularly in warehousing, distribution and fulfilment systems.”
ENDS
Gordon and Gotch Australia Pty Ltd The Scribo Group Pty Ltd
Craig Davison Gary Cobbledick
Managing Director Chief Executive Officer
Ph (02) 9972 8830 Ph: (03) 9761-5535
craig.davison@gordongotch.com.au gary.cobbledick@scribo.com.au
About Scribo:
Scribo was formed in February 2008. It is Australasia’s largest independent book distribution and wholesale company.
• Scribo is currently generating annualised revenues of over $A50 million
• Each of the four component businesses have over 20 years of trading history.
• Scribo’s stock list extends beyond 40,000 titles, from more than 500 publisher clients from all over the world
• It has a team of 130 people across three Australian capital cities, as well as representation in New Zealand
• Scribo’s customer network extends to more than 2000 retail outlets
Wednesday 20 February 2008
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Bookwise, Gary Allen, Tower Books and Brumby Books & Music announced today that they had reached agreement to merge their operations.
Each business will retain its own name, identity, publisher lists and sales and marketing team. Key personnel at all four companies will remain in their current roles.
It is intended that IT systems, operations and a range of administrative functions will be integrated and consolidated over the course of the next 18-24 months.
The integrated entity will maintain offices in Sydney, Melbourne and Adelaide.
Commenting on the reasons for the merger, Managing Director of Brumby / Bookwise, Gary Cobbledick, said:
"There is little doubt that in today's business environment, size matters. By merging four of Australasia's leading book distributors we will create a new entity with critical mass to compete effectively. This should be good news for our publisher clients and our retail customers.
"It's good news for our publisher clients because they can have confidence that we now have the scale and resources, and the depth of management, to penetrate all market niches.
"Although publisher lists will continue to be managed separately through the four businesses, at a Group level we will be able to invest more heavily in our "special sales" capabilities, in the servicing of the New Zealand market, and in our online marketing initiatives.
"Our increased scale will also ensure that we become a far more significant supplier to every major book retailer in Australia and New Zealand."
Michael Rakusin, Director of Tower / Gary Allen said that he believed the news would be well received by customers and staff.
"For customers, this should be welcome news. Once the integration is complete, customers will only have to deal with one set of invoices instead of four, make one payment, seek one set of returns authorisations and have only one number to call for P&A and other queries."
Rakusin stressed that for customers it's business as usual until further notice.
"These changes will take 18-24 months to implement, so customers should continue to deal with each company as a separate entity for orders, enquiries, payments and queries on all their existing phone and fax numbers and email addresses.
"For all four respective staff compliments too, this move should constitute good news. At the moment, each business is too small to offer much room for career progression. Staff members seeking greater challenges are currently obliged to look elsewhere. Under the new model, we will be able to offer far greater internal career mobility."
Commenting on the operational reasons for the merger, Dale Druckman, Director of Tower / Gary Allen, said the merger should, over time, eliminate functional duplication and increase operational efficiencies.
"Given that three of the four companies are sending books to roughly the same core customer group, it seems to make perfect sense to adopt a medium-term strategy to consolidate IT systems, warehousing operations and certain administrative functions.
"Industry leading IT systems tailored for the book distribution industry are usually out of the price range for mid-size distribution companies, but this merger will allow us to amortise the cost over four entities, thereby making cutting edge technology more affordable for each component."
Druckman cautioned that IT integration would not occur overnight.
"These things take time. We anticipate that it will take at least 18 months to integrate systems across the four businesses. We will investigate warehouse consolidation options once the systems have been bedded down, and this will involve a detailed feasibility study.
"We see more immediate synergy opportunities in areas such as consolidation of overseas shipping from the USA, Europe and Asia, and in the bulk purchasing of services from freight and postage, to printing, telephony and consumables."
Gary Cobbledick
gary@brumbybooks.com.au | 0417 056 766
Michael Rakusin
miker@towerbooks.com.au | 0413-874-491
Bookwise International Pty Ltd is Australasia's largest independently owned book distributor, and is based near Adelaide, South Australia. The company was founded 50 years ago. It was sold to AMS Inc in 2001, and to Brumby Books in May 2007. The list is predominantly non fiction, with a focus on Art and Design, Lifestyle, and Children's titles. Its website is at www.bookwise.com.au
Gary Allen Pty Ltd has been in business for over 55 years, and is based near Sydney. A family owned company, it was sold to Tower Books in October 2007. Gary Allen has continued as a consultant to the business. The list is predominantly non-fiction and children's, with books ranging from one-off Australian authors and self-publishers, through to full lists from large and small Australian and International publishing houses. Its website is at www.garyallen.com.au
Tower Books Pty Ltd has been in business for over 20 years, and is also based near Sydney. It was bought by the current owners in 1998. Tower is primarily noted for its large range of art, design, architecture and photography books as well as a large list of literary fiction. Tower also has a considerable range of middle market non-fiction in areas of personal finance, motivation, parenting, gardening and crafts. Its website is at www.towerbooks.com.au
Brumby Books & Music (formerly Gemcraft Books) has been in business for 23 years, based near Melbourne. It was bought by its current owners in 2004. It acquired New World Music Australia in 2007, and the Bloomings Books wholesale business in 2008. Brumby operates as a distributor into the book trade, and a wholesaler outside the book trade. Its primary focus is to service niche market customers in the mind-body-spirit, health, gift, gardening, music and dvd market segments.
Its website is at www.brumbybooks-music.com.au