Barnes & Noble to buy back College Booksellers in $596 million deal
11 Aug 2009
Barnes & Noble Inc, the largest US bookstore chain, will buy back Barnes & Noble College Booksellers Inc from Leonard Riggio for $596 million, the retailer's chairman and founder said.
The retailer said its earnings would vault 35 per cent on an annualised basis with the transaction. The financing of the acquisition would be covered through $250 million of seller financing, cash and part of a $1 billion four-year line of credit.
The college bookseller owns 624 stores in the US and had revenue of $1.8 billion in the year ended May. Barnes & Noble posted $5.1 billion in sales last year, a 3 per cent decline. The college chain has seen sales grow at an average 6.2 per cent for the past three years.
Barnes & Noble, like other booksellers, has grappled with falling sales in the $25 billion book market. With more and more readers migrating to online purchases, bookstores have seen their sales plummet over the last few years.
However, the textbook market worth $5.2 billion in books from kindergarten to 12th grade and a $5 billion textbooks market for higher education, with more schools introducing computers and e-books in the classroom, it's a growth market, according to analysts.
Last month, Barnes & Noble launched an online store for digital books, billing it as the world's largest. The company said it would be the exclusive provider of digital content for the upcoming Plastic Logic e-reader.
