For the fourth time in just less than 10 years, Baker & Taylor is about to get a new owner. In a letter sent to publishers, ReaderLink CEO Dennis Abboud wrote that the two parties have signed a letter of intent under which ReaderLink will acquire the business and substantially all of the assets of B&T, including Baker & Taylor Distribution Services. The acquisition is expected to close on September 26.
According to the letter, most of the current B&T management team and employees will join ReaderLink, including Aman Kochar, B&T’s CEO and current owner who bought the library wholesaler from Follett Corp. in 2021. As part of ReaderLink, Kochar will continue to head B&T’s business, reporting directly to Abboud.
Although it is the country’s largest library wholesaler, B&T has struggled to remain a profitable company in a low margin business. Following his acquisition of B&T, Kochar implemented a number of changes to try an improve its financial picture, an effort that was only partially successful. Abboud alluded to B&T’s problems, writing that “the last several months have been a challenging period for Baker & Taylor. The company has faced headwinds, including the pressures of operating independently, emerging from the COVID-19 pandemic, and overcoming the debilitating impacts and financial losses resulting from cyberattacks in 2022.”
As part of the rationale for the deal, Kochar sent his own letter to library clients (later sent out by ReaderLink as well) explaining that ReaderLink, which distributes books to mass merchandisers such as Target, Walmart, and other large nontrade outlets, is “well-capitalized and maintains over $250 million in inventory across its six geographically optimized distribution centers, which will soon augment Baker & Taylor’s existing operations centers.”
The transaction, Kochar continued, brings additional resources to B&T’s customers, “including best-in-class in-stock positions, faster order turnarounds, and an expanded portfolio of library-tailored products while continuing Baker & Taylor’s personalized customer service.” Baker & Taylor and ReaderLink have done business in the past. In 2015, ReaderLink bought B&T’s publishing business, which is now known as Silver Dolphin.
As noted by Abboud, ReaderLink is acquiring only B&T’s assets and any balances owed by B&T to suppliers remain with that company. According to the Abboud letter, ReaderLink has been “advised that in the coming weeks the current owners or their advisors will provide guidance regarding the process for submitting claims related to pre-closing open invoices.” Questions about any balance can be directed to APClaims@baker-taylor.com.
Abboud noted that while ReaderLink is not assuming pre-closing liabilities, it will take on the financial obligation “for any product ordered by, and shipped to, Baker & Taylor following the closing of the transaction.” ReaderLink will provide guidance shortly with respect to how future purchase orders will be issued and where to direct any requests for transition information, Abboud wrote.
Publishers were not surprised that B&T has once again changed hands since many had been experiencing problems with the wholesaler for some time and B&T had been on credit hold with some publishers, particularly in recent months. PW has also received a number of complaints from librarians about B&T’s service.
The announcement did carry a couple of surprises for publishers though, including that ReaderLink was the buyer. Two publishers pointed to the lack of synergy between ReaderLink and B&T and wondered how the pairing will result in savings. Another publisher questioned how a company (ReaderLink) “that has 100% of the wholesale market now be allowed to buy such a big piece of the library market?” Others noted that ending up with ReaderLink is better than B&T being acquired by Ingram, which would give Ingram the dominant position in both library and trade wholesaling.
Another concern raised by a number of publishers was about how much of the money B&T owes publishers will be paid back. “It is concerning that the accounts payable will remain with the current owners and whether publishers will get paid or need to write off the outstanding invoices,” one publisher said. Michael Kerber, president of Red Wheel/Weiser, told PW, “We have worked with Baker & Taylor in good faith and expect them as a result of this this sale to honor all outstanding invoices.”