Nasco to merge with Aristotle Corp.

New Haven, CT—In a somewhat complicated and unusual deal, Nasco International, a $150 million multititle educational products cataloger, agreed to merge with Aristotle Corp., a $10 million holding. The deal is expected to close during the first quarter of 2002. Because Aristotle is a public company and the Fort Atkinson, WI-based Nasco is private, Aristotle will become the parent firm. Aristotle CEO John Crawford will be CEO of the combined company; Steven Lapin, president/chief operating officer of Nasco’s Stamford, CT-based parent firm, Geneve, will retain his title with the new company.

Aristotle owns Woodstock, NY-based Simulaids, which manufactures mannequins used for teaching healthcare professionals. In addition to Nasco, Geneve owns 58% of Independence Holding Co., a public insurance holding company that’s traded over the counter. Geneve already had a 50% interest in Aristotle. But by merging Nasco with the holding company, Nasco’s income can be “sheltered with Aristotle’s significant tax loss,” Lapin explains. “Nasco has to pay federal income tax for all its income. So by offsetting that against Aristotle’s losses, we can offset the tax burden on Nasco. And that’s good for Nasco as well as for Aristotle’s shareholders.”

The merger also gives Nasco the opportunity to add more proprietary products to its health education business, which the company aims to grow. Nasco’s primary business is educational supplies for elementary, middle, and high schools; of Nasco’s 25 titles, just three serve the healthcare market. Simulaids’ mannequins and nursing education simulation kits will help Nasco better merchandise those books, Lapin says.

Aristotle’s Crawford points out that his firm will multiply instantly with the Nasco merger. “It gives us additional ways to grow by using our common stock to make additional acquisitions,” he says. The combined company plans to expand Nasco’s healthcare education business into Canada next year, as well as acquire other healthcare and school education products manufacturers and distributors. In 2001, Nasco acquired Fort Collins, CO-based American Educational Products and Toronto-based Spectrum Educational Supplies—the latter of which gave Nasco entry into the Canadian market.

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