Acquisition of 25% Interest in Leading Canadian Distributor Furthers Strategic
Goal of Providing Global Services to a Broad Array of Book Sellers
Transaction Expected to Generate Wide Range of Benefits to Both Parties
SAN DIEGO, Sept. 17 /PRNewswire/ -- Advanced Marketing Services, Inc.
(Nasdaq: ADMS), a leading distributor of books and related materials to
membership warehouse clubs and other specialty retailers in the U.S., Canada,
Mexico, and the U.K., today announced the acquisition of a 25% interest in
Raincoast Book Distribution Ltd. Terms of the investment, which have been
found to be nonreviewable under the Investment Canada Act, were not disclosed.
This new relationship with Raincoast, who was recently voted "Distributor of
the Year" by the Canadian Booksellers Association, is expected to enhance
Advanced Marketing's North American distribution system.
Raincoast, located in Vancouver, has served the Canadian bookselling
community since 1979. A number of synergies are anticipated from the
relationship as both firms have extensive book wholesaling and publication
interests in Canada. In addition, Raincoast also represents approximately
40 publishers in the Canadian market on an exclusive distribution basis, a
service that Advanced Marketing has to date not provided.
Under its own imprint, Raincoast publishes books in the areas of travel,
cooking, health and fitness, personal finance, popular science, gardening and
children's books. In addition to its publishing program, Raincoast purchases
foreign book rights for the Canadian marketplace. Most recently, Raincoast
acquired Canadian rights to J.K. Rowling's successful Harry Potter series.
With over 500,000 in print in Canada alone, the Harry Potter books have become
a worldwide phenomenon and have catapulted J.K. Rowling to the top of the
international bestseller lists.
For the year ended March 31, 1999, Raincoast net sales were $28.7 million
Canadian dollars or approximately $19.0 million U.S. dollars, based on the
weighted average conversion rate of .66.
Michael M. Nicita, President and CEO of Advanced Marketing Services, Inc.,
said, "Advanced Marketing is privileged to have the opportunity to invest in
one of Canada's premier book distributors and is looking forward to providing
the support necessary to accelerate Raincoast's expansion in the Canadian
marketplace. We believe that a number of opportunities exist to realize
significant synergies in a broad array of activities as we capitalize on both
companies' experience in traditional wholesaling and in providing specialty
services to our customer bases. In conjunction with our wholly-owned Mexican
subsidiary, the Raincoast relationship allows Advanced Marketing to deliver
more comprehensive North American distribution services to our current and
future customers."
Charles Tillinghast, Chairman of Advanced Marketing Services, Inc., added,
"This furthers our strategic goal of creating an international distribution
infrastructure that will leverage our well-developed systems and experience
and broaden our range of customers. In addition to our previous acquisitions
of Aura Books and Metrastock Ltd. in the U.K., the investment in Raincoast
continues our international expansion and moves us closer to our goal of
providing global, customized services to book retailers around the world. We
believe that this international presence is a strong complement to our robust
and growing domestic business."
Allan MacDougall, President and CEO of Raincoast commented, "Raincoast is
extremely pleased to have Advanced Marketing as a shareholder. We view the
investment by one of the leading American book distributors as a validation of
the success of our business model. In today's increasingly competitive
landscape, the efficiencies created through this agreement will benefit both
parties as we continue our respective expansions. This alliance will give
Raincoast improved access to the markets in the United States, Mexico and
Europe, while Advanced Marketing will have the benefit of a well-developed
platform for their Canadian interests."
Additional information may be obtained via the Internet at the Company's
Web Site ( http://www.advmkt.com ).
Forward-looking statements in this news release are made under the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Certain important factors could cause results to differ materially from those
anticipated by the forward-looking statements, including the impact of changed
economic or business conditions, the impact of competition, the success of
existing and new book releases, continuation of favorable trends associated
with the Company's VMI program, other risk factors inherent in the publishing
and retailing industries, and other factors discussed from time to time in
reports filed by the Company with the Securities and Exchange Commission.
SOURCE Advanced Marketing Services
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Related links:
http://www.advmkt.com
CONTACT:
Susan Fonss, Director of Investor Relations,
858-457-2500, for Advanced Marketing Services
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