Perseus to Acquire Avalon -- More PGW Clients to Follow?

On Wednesday, January 10, Perseus Books Group announced that it had signed a letter of intent with the Avalon Publishing Group under which Avalon would be merged into the Perseus Books Group.

"We admire Avalon's books, authors, and publishing approach," Perseus President and CEO David Steinberger said in a statement. "We're excited to be bringing the independent publishers that comprise Avalon together with Perseus."

The acquisition is part of the aftermath of the December 2006 Chapter 11 bankruptcy filing by San Diego-based Advanced Marketing Services, Inc., a San Diego-based wholesaler of general interest books that provides a variety of other services, including promotional and advertising services to publishers. Avalon had been a publishing client of Publishers Group West (PGW), a subsidiary of AMS. Since the bankruptcy filing, the fate of PGW and its clients has been uncertain.

Steinberger also indicated that there was a possibility that Perseus would bring other PGW clients into the fold. He said that he and Avalon Chairman and CEO Charlie Winton "are already working together on a proposal to AMS, PGW, and PGW clients, all of whom are facing a very challenging situation. We have talked to a number of clients and we are in discussions with AMS."

Said Winton, "We think a path can be found that would benefit all parties. Because of its two distribution lines -- Consortium and Perseus Distribution -- Perseus is ideally positioned to lead this initiative."

As for the current merger, Winton will continue to lead Avalon for a transition period and then move to a consulting role, advising Perseus Books on a range of publishing and strategic issues, in particular how to further develop Perseus' client services business through which Perseus provides sales and distribution services to independent publishers. (Read related story.)