Magazine article Information Today

RoweCom Acquires Dawson Information Services Group

Magazine article Information Today

RoweCom Acquires Dawson Information Services Group

Article excerpt

RoweCom, Inc. (http://www.rowe.com), of Internet-based Knowledge Store and Knowledge Library fame, has announced that it has inked a deal to acquire U.K.-based Dawson Information Services Group (ISG), one of the world's largest information services organizations. The deal involves approximately $56 million in a combination of cash and stock.

RoweCom is a subscription service that has taken the e-commerce approach. Its catalog includes 120,000 titles from over 17,000 publishers, as well as 8 million discounted books through its partner Barnes & Noble (http://www.barnesandnoble.com). Its broadly based clientele ranges from Fortune 1000 companies to academic Libraries.

It's a good deal for RoweCom, since the acquisition is expected to add more than $350 million in annual revenues and significantly enhance its gross margins as well as accelerate profitability. A certain amount of personal satisfaction must also be involved for Richard Rowe, the company's president and CEO. In the early '90s, he headed Dawson Information Services under the Faxon name, but had to sell it.

The acquisition fulfills several tenets of RoweCom's growth strategy. By acquiring Dawson, it will expand its market share with the instant addition of over 20,000 clients from the U.S., Canada, and Europe; expand its current catalog; and expand internationally.

The group employs approximately 500 people and serves over 20,000 clients, most of which are in RoweCom's core vertical and academic markets. Many are traditional subscription-service customers, but apparently the plan is to ultimately convert all of them to RoweCom's Web-based kStore or kLibrary from their current services.

"The financial opportunities presented by this acquisition are tremendous," said Louis Hernandez, executive vice president and CFO of RoweCom. "By transitioning this traditional business model to our Internet platform, we will significantly improve its profitability. And the financial leverage of this opportunity is truly global in scope. As the size of our Internet platform grows, the opportunity to exploit the scale of the platform also grows as we gain an enhanced ability to upsell additional content to individual users in a variety of forms."

Richard Rowe said: "This acquisition significantly accelerates our international growth strategy. …

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