Audio Book Club, Inc. (AMEX: KLB) expects to more than double its annual revenues through the acquisition of the Columbia House Audiobook Club. This acquisition is an important component of the company’s growth as an e-commerce presence, better positioning it to compete with major online booksellers, such as Amazon.com and Barnesandnoble.com.
Commenting on the acquisition, Norton Herrick, chairman and CEO of Audio Book Club, believes that the acquisition will place Audio Book Club as the largest seller of audiobooks worldwide. The deal gives the company an expanded customer base, as well as access to Columbia Houses customer files of approximately 20 million names.
Columbia House’s Audiobook Club was launched in 1994 and has a total customer file of over 600,000 names. The acquisition will give Audio Book Club more than one million members.
As part of the agreement, Audio Book Club will be able to utilize Columbia House’s compact disc, VHS, laser and DVD membership lists in its new member acquisition campaigns. In addition, Audio Book Club will insert new member materials into Columbia House’s member mailings to its various clubs.
Specific financial terms of the acquisition, which includes a combination of cash and stock, were not disclosed.
Related News & Background
In other news, Audio Book Club also announced that it has obtained a financing package from Fleet National Bank and ING Barings. Part of the financing will be used in connection with the company’s recent acquisitions of the Columbia House audiobook club business, as well as Radio Yesteryear and Video Yesteryear, Radio Spirits Inc., and Adventures in Cassettes.
With headquarters in Boca Raton, Florida, the company sells audiobooks via the Internet at audiobookclub.com and BooksAloud.com, as well as by mail order.
BooksAloud.com, which conducts its business primarily online, aims to distinguish itself by use of various Web tools. These include access to audiobook excerpts for those with a RealAudio player, a searchable inventory of over 70,000 audiobook titles, use of secure-server credit card transactions, and immediate e-mail order confirmation.