Demco Books Itself an Acquisition

Longtime rivals in the library-supplies market, Demco and Gaylord Direct are now part of the same company. Madison, WI-based Demco in May acquired Liverpool, NY-based Gaylord for an undisclosed amount.

Demco and Gaylord sell similar merchandise, such as book covers, circular desks, shelving, and archival supplies, but they target different segments of the library market. While Demco reaches most of the public and school libraries in the U.S., Gaylord focuses on university and specialty libraries, such as those of museums. Because both companies are well known and highly regarded in their niches, Demco plans to continue to operate Gaylord as a separate subsidiary.

Of the more than 130,000 libraries in the U.S., the two catalogers combined reach about 90% of them, according to Demco president/CEO Bill Stroner. He also says that the combined company exceeds $100 million in sales.

Aside from his assuming the president/CEO title at Gaylord, Stroner says that nothing will change at Gaylord for now. “Our librarian customers are very loyal to us; Gaylord’s are very loyal to them. When you merge, you lose that brand recognition and the loyalty created over the years,” he says. “We feel that the marketing part of the Gaylord business and the call center are areas that should remain in Liverpool with the people who best know how to do those things.”

Not that the two titles will operate completely separately. “The businesses have many synergies they can use to make it one better company combined,” says Scott Peters, managing director for Jordan, Edmiston Group, a New York-based investment bank that represented Gaylord in the sale. “The combined company can produce greater profits at higher margins while providing better pricing to the market as a whole, a larger assortment of products, and a more fine-tuned distribution channel.”

But Stroner is in no hurry. “We are going to take some time to look at the parts of the operation that support the demand of the areas that touch the customer,” he explains. “We’ll do a joint review with both companies to decide where the support areas fit best long-term.”

An acquiring mind

Gaylord officially put itself on the market in November 2002. But Demco had been interested in acquiring Gaylord “for a number of years,” Stroner says. “We feel that the Gaylord name and brand recognition are very strong in the marketplace.”

The Gaylord acquisition was Demco’s second this year. In March, Demco established a Library Services unit that bought BC Inventar (BCI), a Houston-based subsidiary of BCI Denmark. BCI designs and installs an upscale line of Scandinavian library furniture.

Demco had previously acquired two English catalogers: Library Furnishing Corp. in 1993 and Gresswell in 2001. In addition, Demco operates Demco Interiors in the United Kingdom, which, like the new Library Services unit in the U.S,. sends out decorators to design library interiors.

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