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Audio Book gets louder
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January 4, 1999: 9:33 a.m. ET
Audio bookseller buys Columbia House Audiobook for cash and stock
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NEW YORK (CNNfn) - Audio Book Club Inc., a direct marketer via the Internet and mail-order of texts you can listen to, said Monday it has purchased Columbia House Audiobook Club.
The deal will swell Audio Book's membership by several hundred thousand and vault it to the top of its sector. Including three other recent acquisitions, Audio Book Club's member roster will number 1.3 million once its purchase of Columbia House Audiobook is complete.
Terms of the transaction, which Audio Book said is for cash and stock, weren't disclosed.
Since its startup in January 1994, Audio Book Club has aggressively recruited members, who are required to purchase two items at full price every year from the company's offerings of audio cassettes, CDs and video cassettes.
The acquisition of Columbia House, a New York-based joint venture of CNNfn parent company, Time Warner, and Sony Corp. subsidiary Sony Music Entertainment Inc., will add 600,000 new members to Audio Book's current subscribership of 400,000.
Boca Raton, Fla.-based Audio Book Club (KLB) said Monday it expects the acquisition to more than double its revenue to about $50 million and transform the company into the largest audio-book seller in the world.
"This is truly a 'McGwiresque' deal for Audio Book Club," Norton Herrick, the company's chairman and chief executive officer, said.
"This acquisition," Herrick continued, "marks a major milestone for Audio Book Club and, we believe, solidifies our position not only as the leading club for audiobooks, but as the leading seller of audiobooks in the world."
Herrick added the deal should result in significant economies of scale that significantly reduce costs through a wider membership base and from volume discounts from suppliers.
After the transaction, Audio Book will have access to Columbia House's compact-disk, VHS, laser-disk and DVD membership lists, which contain about 20 million names.
Audio Book operates Audio Book Club and BooksAloud.com. The company bases orders on so-called "negative response", sending selections to members automatically unless they indicate they do not want a particular item.
The Herrick family controls 60 percent of the company.
Shares of Audio Book Club rose ½ to 11-5/8 Thursday on the American Stock Exchange, well below the stock's 52-week high of 20-7/8.
Audio Book Club, despite its ambitions, has racked up steady losses in the past several quarters. In the third quarter, ended Sept. 30, the company posted a loss of $1.9 million on revenue of $3.9 million.
Columbia House Audiobook Club, launched in 1994, is a subsidiary of Columbia House, the world's leading direct marketer of entertainment products. 
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Audio Book Club
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