A group of executives led by Gilbert Perlman, president of Random House Inc.'s distribution division, has agreed to acquire the distribution unit from the giant publisher. Terms of the agreement, which is set to close September 1, were not disclosed.
As part of the purchase, the newly formed company, Client Distribution Services Inc., will acquire Random House's 300,000-sq.-ft. Jackson, Tenn., distribution facility, which will be used as CDS's headquarters when it begins operations this fall. CDS plans to retain all the Jackson personnel and the existing logistics systems originally developed by Random for its exclusive use. All shipping, returns processing and operations functions will be handled in Jackson.
In addition to Perlman, CDS's executive team includes Robert Anderson III, who will serve as chairman and will oversee the company's IT system. He was previously executive v-p of Owens and Minor, a medical distribution company. CDS's CEO will be Kim Pendergast, currently president of the Pendergast Group, a distribution and logistics consulting company. Other members are Roger Kennedy, director of operations for Random's distribution business, who will serve in the same capacity with CDS; Victor Zabavsky, former president of Firebird Publications, who will be the CFO; and Steve Black, previously senior v-p for the Ballantine Publishing Group, who will be CDS's director of sales and marketing. Perlman and Kennedy will continue working with Random until the deal is completed.
The Random distribution unit currently has approximately 12 clients; it has lost several publishers since the company announced last fall that it would be phasing out its distribution business. Now that a deal has been struck, Black told PW, CDS has begun talking to Random's existing clients about staying on as well as seeking potential new clients. Black said that CDS is willing to do business with any type of publisher, regardless of size; he expects that by the end of its first year, CDS will have between 15 and 20 clients.
In addition to offering logistics and technology services, CDS will sell titles to the book trade through a dedicated sales force, which Black is in the process of recruiting. Black explained that given the growth of independent publishers and their need for distribution, he is excited about the prospects for the new company.
The company's headquarters in the metropolitan New York City area is in Darien, Conn.; CDS can be reached by phone at (203) 655-6449.
