F&W Publications' purchase of Krause Publications will give the Cincinnati-based publisher a book publishing program that will generate revenues of approximately $110 million in 2002, while its magazine publishing will also produce revenues of $110 million, F&W president and CEO Steve Kent told PW. Book revenues will come from a frontlist that will now consist of about 350 new titles annually as well as from a 2,250-title backlist.
Kent explained that the acquisition of Krause had been in the works for nearly two years. "When I first began talking to [Krause president] Roger Case, it became apparent that not only were these two companies similar, but that they belonged together," Kent said. While the companies both published books and magazines for the enthusiast market, the only overlap in the book segment is in the crafts category. Krause brings such new book segments to F&W as antiques, sports memorabilia, comic books, coin collecting, firearms and knives.
Although the integration plan is still in the works, F&W book division president Budge Wallis will head the combined book group, while Case will oversee the magazine group. Both men will report to Kent. All existing imprints are expected to remain, and Kent said F&W is committed to maintaining a large presence at Krause's Iola, Wis., headquarters. The only changes Kent sees making in the book group is reconfiguring some sales territories.
Kent insisted that while the larger F&W will enjoy some economies of scale, the company's main motivation for its acquisition program "is to add more resources" including such things as new photography studios as well as editorial talent. "We have a vibrant business," Kent said, adding that rather than eliminating positions, he anticipates hiring people to support growth. The company currently has about 800 employees.
Kent said he is projecting organic growth to be about 10% in the book group in 2003, but said he expects the company to make additional acquisitions in its core areas. Indeed, since the completion of the Krause acquisition in July, F&W bought Horticulture and Print magazines in separate transactions. F&W itself was acquired earlier this year by former Primedia head William Reilly, backed by the investment firm Providence Equity Partners.
Prior to the Krause purchase, Kent said F&W was having a good year, led by its crafts and fine art segments. While growth in its writing lines has been slower than some other areas, Kent said, "fortunately, no categories have suffered a decline."
