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EDS May Sell Subscription Fulfillment Unit to Kable's Parent

Electronic Data Systems Corp. is in talks to sell its subscription fulfillment division to AMREP Corp., parent company of fellow fulfillment provider Kable News Co., AMREP said Friday.

AMREP declined comment, but wire reports said EDS received several bids with AMREP emerging as the final bidder, though it is unknown what it might pay for the unit. In mid-September, Plano, TX-based EDS revealed its intent to seek a buyer for the unit, which it said never fit with the rest of its business.

EDS did not return calls.

EDS no longer says how many subscriptions or titles it services, though at the time of the announcement it claimed that its 800-employee division in Louisville, CO, serviced 100 million active subscriptions for 325 magazine titles. Industry reports now put its subscription volume as low as 40 million.

The computer services giant founded by Ross Perot bought the fulfillment operation from Neodata in 1997 for $300 million and combined it with several companies it had acquired into its Centrobe division. The Centrobe name was phased out in favor of EDS.

Neodata, founded in 1949 as the subscription fulfillment arm of Esquire magazine, has served publishing clients in the consumer and business magazine and book publishing arena, providing subscription order management, list conversion, payment processing and billing, and label preparation and distribution.

Despite EDS' well-documented financial troubles, it is unclear how much the subscription portion of the business has affected it overall given that its core business is information technology. However, several big clients left EDS for competitors in the past year. Conde Nast and Gruner + Jahr USA Publishing moved their subscription fulfillment processing to Communications Data Services Inc., Des Moines, IA, while Primedia relocated its business to Palm Coast Data, Palm Coast, FL.

Kable Fulfillment Services, a division of Kable News, is in Mount Morris, IL, with executive offices in New York. Kable provides fulfillment services for 640 magazine titles for 215 clients and maintains almost 14 million active subscriber names for its client publishers.

AMREP, through another subsidiary, also is a major landholder and leading developer of real estate in New Mexico.

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