Time Inc. sells Bookspan stake to BMG Columbia House
German media giant Bertelsmann AG's direct division has purchased Time Inc.'s 50 percent stake in book club operator Bookspan, which was a partnership between the two companies.
Bookspan owns and operates 40 book clubs in the United States, including the Doubleday Book Club, Literary Guild, Book-of-the-Month Club and special interest and lifestyle clubs. The newly combined entity will be the largest direct distributor of media products in the United States, serving more than 20 million members. Terms of the deal were not disclosed.
"This investment underscores our belief that direct marketing is a distribution channel with great potential for future growth because it meets consumers' desires for selection, service and value," Ewald Walgenbach, CEO of DirectGroup Bertelsmann, said in a statement.
Bookspan will be integrated into BMG Columbia House Inc., New York, an operating unit of DirectGroup that markets music and DVDs direct to consumers in the U.S. and Canada through BMG Music Service and Columbia House DVD Club.
BMG Columbia House expects to create new growth opportunities by combining Bookspan's various book club offerings with its music and DVD businesses.
Stuart Goldfarb, president/CEO of BMG Columbia House, will lead the combined entity.
BMG acquired Columbia House two years ago from private investment firm Blackstone Group in a deal reportedly worth $400 million.