Reiman CEO Expects to Hire Because of Reader's Digest Acquisition
"We have a very lean staff, and when we start doing things together we're undoubtedly going to have to add staff. There is a lot of opportunity," said Tom Curl, president/CEO of Reiman Publications LLC, Greendale, WI. "A very overused word in the business world is synergy, but we really see some things that will work here."
Though the companies have similar audiences and target groups, there is not a tremendous amount of overlap between their databases, Curl said. Reiman has 32 million names, and Reader's Digest has 50 million. Nineteen million of Reiman's customers are not in the Digest database, the companies said.
This gives the publishers much opportunity for expansion. For instance, Reader's Digest has an international presence that Reiman lacks for now, Curl said.
Reader's Digest officials did not return calls for comment.
Reiman publishes 12 cooking, gardening, country living and nostalgia magazines and has a mail-order business and book club. The largest title, Taste of Home, is the country's top-selling food magazine. Reiman is principally owned by investment firm Madison Dearborn Partners Inc., Chicago, and senior management of Reiman.
American List Counsel, Princeton, NJ, handles the Reader's Digest files while Direct Media Inc., Greenwich, CT, manages Reiman's lists. Direct Media also handles Reiman's Country Store catalog. It has 472,800 names in its house file. Curl said there has been no discussion about changes in list management yet.
Reiman gets the bulk of its income from subscribers attracted through aggressive direct mail campaigns. Its magazines do not carry advertising. It also keeps costs low by filling many of its titles with reader contributions. In 2000, Reiman mailed 7 million Country Store catalogs and 65 million magazine supplements.
The $760 million cash transaction is being paid for through financing from J.P. Morgan and Goldman Sachs. It has been structured as an asset purchase. The acquisition, which is the largest ever for Reader's Digest, is expected to close before June 30.