Travel company is buying online bookseller
Spokane travel-planning company Ambassadors Group said Wednesday it will pay $18 million to buy BookRags Inc., an online seller of books, e-books, study guides and articles to students and teachers.
Ambassadors Group, which is traded on the Nasdaq stock exchange, has never purchased an educational services company before.
“Since BookRags operates in an adjacent space to student travel and education, this acquisition is an excellent fit for our organization,” Ambassadors Group CEO Jeff Thomas said in a press release.
Privately held BookRags, based in Hamden, Conn., was launched in 1999. Ambassadors will pay $8.5 million in cash and $4.5 million in stock. The remaining $5 million of the purchase agreement will come from future BookRags revenue, the press release noted.
Ambassadors, in its most recent quarterly earnings report, said it had about $42 million in cash and cash equivalents.
The same quarterly earnings report also projected a decline of about 20 percent in total travel bookings in 2008, compared with 2007.
As of April 15 Ambassadors said it had booked about 45,000 participants for paid 2008 travel, the majority of them being students. One year earlier Ambassadors had 56,000 enrolled travelers for its 2007 travel programs.
The earnings report said the huge decrease in net enrollments for 2008 programs will “negatively impact” its earnings. But the company release also said it expects to be profitable for the year.
Part of the appeal of BookRags, Thomas said in the release, comes from a desire to use online media to reach students and parents more effectively.
The core audiences of students, parents and teachers at BookRags “overlaps with Ambassadors Group’s key demographic, and will enable (us) to expand its reach into new media and online channels where this target audience continues to spend more and more time,” the release said.
The company’s stock lost 54 cents Wednesday, closing regular trading at $18.31.