NEW YORK, NY AND PLANO, TEXAS (April 1, 2003) - AMREP Corporation (NYSE: AXR) and EDS Corp. (NYSE: EDS) today announced the signing of a definitive agreement for an AMREP subsidiary to acquire EDS' subscription fulfillment business for a purchase price of approximately $10 million in cash and assumed liabilities. The purchase is expected to close by the end of April.
EDS said that it expects to net approximately $27 million in cash from the transaction, including the purchase price and an estimated $21 million in retained cash and receivables related to the business.
AMREP's Kable News Company, Inc. subsidiary is a major provider of magazine subscription and list fulfillment services. The acquisition of the EDS business should more than double Kable's revenues in this area and firmly establish Kable as the second largest service provider in the subscription fulfillment business.
Commenting on the transaction, AMREP Chairman Edward B. Cloues, II said, "The acquisition of EDS' subscription fulfillment business represents an exceptional opportunity for Kable to expand its services to publishers and position itself as a leader in the business. Mike Duloc, the President of Kable, and Steve Strickman, the Chairman of the Kable fulfillment business' management committee, have spearheaded the acquisition effort for Kable and will be responsible for the integration and growth of the EDS and Kable subscription fulfillment businesses once the transaction closes." Mr. Duloc added, "Kable will benefit from an experienced and dedicated EDS management staff that is highly regarded by the publishing industry. In addition, the complementary strengths of each organization will present the opportunity for an enhanced level of customer service by the combined businesses."
"The transaction benefits both parties," said Paula Kruger, general manager of EDS' Customer Relationship Management service line. "The employees of EDS' subscription fulfillment business will be joining a market leader in the magazine subscription industry and will make Kable a much larger and stronger service provider. EDS, in turn, will receive fair market value for a business that is not core to our strength in customer-relationship services and information technology."
EDS' subscription fulfillment business employs about 800 people, primarily at its facility in Louisville, Colorado, which will be subleased by Kable. EDS announced its intention to sell the subscription fulfillment business on September 18, 2002, as part of a program to sell non-core, non-strategic assets.
AMREP, the holding company which owns Kable News Company, is based in New York City and employs approximately 925 people throughout its units. Revenues for its fiscal year ended April 30, 2002 totaled more than $83 million. AMREP's Kable News Company subsidiary distributes magazines to wholesalers and provides subscription fulfillment and related services to publishers and others, and its AMREP Southwest Inc. subsidiary is a major landholder and leading developer of real estate in New Mexico.
EDS, the leading global services company, provides strategy, implementation, business transformation and operational solutions for clients managing the business and technology complexities of the digital economy. EDS brings together the world's best technologies to address critical client business imperatives. It helps clients eliminate boundaries, collaborate in new ways, establish their customers' trust and continuously seek improvement. EDS, with its management consulting subsidiary, A.T. Kearney, serves the world's leading companies and governments in 60 countries. EDS reported revenues of $21.5 billion in 2002. The company's stock is traded on the New York Stock Exchange (NYSE: EDS) and the London Stock Exchange. Learn more at www.eds.com.
The statements in this news release that are not historical statements, including statements regarding proceeds from the transaction, the anticipated closing date and future revenues and prospects of the combined businesses, are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond the control of AMREP and EDS, that could cause actual results to differ materially from such statements. For information concerning these risks and uncertainties, see AMREP's and EDS' most recent Form 10-Ks. AMREP and EDS disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.