August 10, 2009, 12:00 AM

Barnes & Noble acquires sister company Barnes & Noble College Booksellers

The retailer will use its $596 million acquisition to add a new dynamic to its e-commerce base and digital books business. The deal gives Barnes & Noble access to a potential market of four million students and 2,000 colleges and universities.

Barnes & Noble Inc. has acquired Barnes & Noble College Booksellers Inc. for $596 million. It will use the newly acquired company to add a new dynamic to its e-commerce base and budding digital books business. “We see a tremendous opportunity in digital distribution, which is only in its infancy,” Barnes & Noble chief financial officer Joseph Lombardi tells Internet Retailer.

With the acquisition of Barnes & Noble College Booksellers, which until today was a privately held sister company owned by its chairman Leonard Riggio, Barnes & Noble now has a bigger foothold in the fragmented $10 billion textbook business and in the university bookstore operations market.

Barnes & Noble College Booksellers, which generated revenue of about $1.8 billion in fiscal 2009, operates 624 college bookstores through multi-year management agreements. Those college bookstores collectively represent four million students and 250,000 faculty members, the books retailer says.

The deal, which has been approved by each company’s board of directors, also strengthens Barnes & Noble’s e-commerce business. In conjunction with operating stores on campus, Barnes & Noble College Booksellers also operates online university bookstores which sell a wide variety of textbooks, apparel, dorm room supplies and other items.

“In a rapidly changing environment, both companies will benefit from a unified digital platform and brand, which will enable the combined company to capitalize on the growing online college textbook and electronic book markets,” says Irene R. Miller, chair of Barnes & Noble, No. 41 in the Internet Retailer Top 500 Guide.

In addition to selling textbooks online, Barnes & Noble College Booksellers also owns and operates e-commerce technology that lets students place web orders, pay online and then pick up the books in the bookstore or have the purchase delivered to their dorm room. Other technology enables students to reserve and order textbooks from the time they enroll in a particular class and provides instructors and students with web tools that let them submit book orders online and look back to previous semesters to view their order histories.

“Although both companies previously thrived as separate entities, the definition of textbooks and trade books has become increasingly blurred,” says Riggio. “This trend will accelerate with e-book offerings. Thus, combining both businesses on a single branded platform will enable the combined company to cross-promote print and digital offerings to all of our customers.”

In July Barnes & Noble opened an eBookstore, located at BN.com/ebooks, that offers access to 700,000 e-book titles, compared to the 300,000 available through Amazon’s Kindle Store, and an eReader e-book software application that consumers can download to most PC and Mac computers, Blackberry and iPhone smartphones, and iPod Touch devices. “We have the know-how to bring digital distribution to a market of 2,000 colleges and universities,” says Lombardi.

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