|[February 26, 2015]
Barnes & Noble to Separate College Business from Retail and Nook® Digital Businesses
Barnes & Noble, Inc. (NYSE:BKS), today announced the filing
of a Registration Statement with the U.S. Securities and Exchange
Commission in order to effect a separation of Barnes & Noble Education
(which comprises the Barnes & Noble College business) from Barnes &
Noble's Retail and NOOK Digital businesses. The planned separation will,
when consummated, create two independent, publicly traded companies. The
separation is intended to be a tax-free distribution to Barnes & Noble
shareholders and is anticipated to be completed by the end of August
2015, subject to customary conditions.
Barnes & Noble believes that the separation will allow each business to
optimize its strategic opportunities. As more focused companies with
differing potential growth profiles, capital needs and market dynamics,
each company will benefit from strategic clarity and separate management
and Board focus. The separation will also allow investors to assess each
business more clearly as a stand-alone company.
"We have a talented College management team in place, led by CEO Max
Roberts, and we will continue to invest and innovate to support the
mission of our campus partners, expanding to new colleges and
universities, students and faculty and increasing our presence in the
growing market for digital educational content and services," said
Michael P. Huseby, Chief Executive Office of Barnes & Noble, Inc.
Mr. Huseby continued, "Separating Barnes & Noble Education will create
an industry-leading, pure-play public company with more flexibility to
pursue strategic opportunities in the growing educational services
markets. At the same time, Barnes & Noble will be able to better
capitalize on improving industry trends and merchandising initiatives
within its core Retail business. Retail and the NOOK Digital Business
will be able to leverage a more integrated technology infrastructure for
improved efficiency and to better serve digital customers."
Barnes & Noble Education, Inc.
As described in more detail in the Registration Statement filed with the
SEC (News - Alert) today, Barnes & Noble Education, Inc., through its College business,
is one of the largest contract operators of bookstores, operating 714
stores on college and university campuses in the United States. The
Company creates and operates campus stores that are focal points for
college life and learning, enhancing the educational mission of the
institution, enlivening campus culture and delivering an important
revenue stream to partner colleges and universities. Following the
separation, the College business will continue to deliver a dynamic
retail and digital learning experience driven by innovation, advanced
technologies and a deep understanding of the evolving needs and
behaviors of our customers. Barnes & Noble Education, Inc. will continue
to be headquartered in Basking Ridge, NJ, and Max J. Roberts, Chief
Executive Officer of Barnes & Noble College, will continue to lead the
organization and Patrick Maloney and Barry Brover will serve as Chief
Operating Officer and Chief Financial Officer, respectively.
Barnes & Noble, Inc.
Barnes & Noble, through its Retail business, is the nation's largest
bookseller operating 649 Barnes & Noble stores in 50 states. The Company
offers easy access to books, educational toys and games, gift products,
magazines, newspapers and other content across its distribution
channels, which include BN.com and NOOK Digital. The NOOK Digital
business offers award-winning NOOK® products and an expansive collection
of digital reading and entertainment content through the NOOK Store® and
will continue to be a wholly-owned subsidiary of Barnes & Noble, Inc.
Additional Transaction Details
The proposed separation is subject to customary conditions, including
among others receipt of opinions regarding the tax-free nature of the
separation, entry into a credit facility and any other financing the
Company determines to be necessary and advisable, and final approval by
the Company's Board of Directors. The Company may, at any time and for
any reason until the proposed separation is complete, abandon the
separation or modify or change its terms.
The Company has retained Guggenheim Securties, LLC as financial adviser
and Cravath, Swaine & Moore LLP as legal counsel in connection with the
This press release contains certain forward-looking statements (within
the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended) and
information relating to Barnes & Noble that are based on the beliefs of
the management of Barnes & Noble as well as assumptions made by and
information currently available to the management of Barnes & Noble.
When used in this communication, the words "anticipate," "believe,"
"estimate," "expect," "intend," "plan," "will," "forecasts,"
"projections," and similar expressions, as they relate to Barnes & Noble
or the management of Barnes & Noble, identify forward-looking
statements. Such statements reflect the current views of Barnes & Noble
with respect to future events, the outcome of which is subject to
certain risks, including, among others, the effect of the proposed
separation of Barnes & Noble Education, the general economic environment
and consumer spending patterns, decreased consumer demand for Barnes &
Noble's products, low growth or declining sales and net income due to
various factors, possible disruptions in Barnes & Noble's computer
systems, telephone systems or supply chain, possible risks associated
with data privacy, information security and intellectual property,
possible work stoppages or increases in labor costs, possible increases
in shipping rates or interruptions in shipping service, effects of
competition, possible risks that inventory in channels of distribution
may be larger than able to be sold, possible risks associated with
changes in the strategic direction of the device business, including
possible reduction in sales of content, accessories and other
merchandise and other adverse financial impacts, possible risk that
component parts will be rendered obsolete or otherwise not be able to be
effectively utilized in devices to be sold, possible risk that financial
and operational forecasts and projections are not achieved, possible
risk that returns from consumers or channels of distribution may be
greater than estimated, the risk that digital sales growth is less than
expectations and the risk that it does not exceed the rate of investment
spend, higher-than-anticipated store closing or relocation costs, higher
interest rates, the performance of Barnes & Noble's online, digital and
other initiatives, the success of Barnes & Noble's strategic
investments, unanticipated increases in merchandise, component or
occupancy costs, unanticipated adverse litigation results or effects,
product and component shortages, risks associated with the commercial
agreement with Samsung (News - Alert), the potential adverse impact on Barnes & Noble's
businesses resulting from Barnes & Noble's prior reviews of strategic
alternatives and the potential separation of Barnes & Noble's businesses
(including with respect to the timing of the completion thereof), the
risk that the transactions with Pearson and Samsung do not achieve the
expected benefits for the parties or impose costs on Barnes & Noble in
excess of what Barnes & Noble anticipates, including the risk that NOOK
Media's applications are not commercially successful or that the
expected distribution of those applications is not achieved, risks
associated with the international expansion previously undertaken,
including any risks associated with a reduction of international
operations following termination of the Microsoft (News - Alert) commercial agreement,
the risk that NOOK Media is not able to perform its obligations under
the Pearson and Samsung commercial agreements and the consequences
thereof, the risks associated with the termination of Microsoft
commercial agreement, including potential customer losses, risks
associated with the restatement contained in, the delayed filing of, and
the material weakness in internal controls described in Barnes & Noble's
Annual Report on Form 10-K for the fiscal year ended April 27, 2013,
risks associated with the SEC investigation disclosed in the quarterly
report on Form 10-Q for the fiscal quarter ended October 26, 2013, risks
associated with the ongoing efforts to rationalize the NOOK business and
the expected costs and benefits of such efforts and associated risks and
other factors which may be outside of Barnes & Noble's control,
including those factors discussed in detail in Item 1A, "Risk Factors,"
in Barnes & Noble's Annual Report on Form 10-K for the fiscal year ended
May 3, 2014, and in Barnes & Noble's other filings made hereafter from
time to time with the SEC.
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those described as anticipated,
believed, estimated, expected, intended or planned. Subsequent written
and oral forward-looking statements attributable to Barnes & Noble or
persons acting on its behalf are expressly qualified in their entirety
by the cautionary statements in this paragraph. Barnes & Noble
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise after the date of this communication.
About Barnes & Noble, Inc.
Barnes & Noble, Inc. (NYSE: BKS) is a Fortune 500 company and the
leading retailer of content, digital media and educational products. The
Company operates 649 Barnes & Noble bookstores in 50 states, and one of
the Web's largest e-commerce sites, BN.com (www.bn.com).
Its NOOK® Digital business offers award-winning NOOK® products and an
expansive collection of digital reading and entertainment content
through the NOOK Store® (www.nook.com),
while Barnes & Noble College Booksellers, LLC operates 714 stores
serving over five million students and their faculty members at colleges
and universities across the United States.
General information on Barnes & Noble, Inc. can be obtained by visiting
the Company's corporate website: www.barnesandnobleinc.com.
Barnes & Noble®, Barnes & Noble Booksellers® and Barnes & Noble.com® are
trademarks of Barnes & Noble, Inc. or its affiliates.
For more information on Barnes & Noble, follow us on https://twitter.com/BNBuzz,
and like us on https://www.facebook.com/barnesandnoble.
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