What Wiley wants

Wiley Europe, the UK-based outpost of New York publisher John Wiley&amp;Sons, is experiencing a quiet transformation as its parent eyes potential acquisition targets around the globe. Liz Bury reports</p><p>
John Wiley&amp;Sons has been named repeatedly in recent weeks as a possible buyer for some of the world's largest publishing companies. With Houghton Mifflin, BertelsmannSpringer and Kluwer Academic Publishers up for sale, the hunt for buyers has heated up.</p><p>
Wiley's professional/trade, STM and higher education publishing business is seen as financially sound and is unlikely to face competition barriers. It generated net profit of $57m (&#163;38m) on sales of $734m (&#163;489m) in the year to end-April 2002, after a $12m (&#163;8m) hit on relocation costs. The figure included $91.4m (&#163;61m) sales from Hungry Minds, which it acquired for $182.5m (&#163;122m) last September.</p><p>
As part of that deal, Wiley assumed $92.5m (&#163;62m) of debt, which helped to push up its long-term debt from $65m (&#163;43m) to $235m (&#163;157m). While it could be reluctant to assume significantly higher levels of debt, steady growth over the past 10 years (see graph) has provided a strong base from which to approach the capital markets for funds, even in the current climate.</p><p>
A family affair</p><p>
Founded in New York in 1807 by 25-year-old Charles Wiley, the company counts three in the sixth generation of Wileys on its board of directors today. Bradford Wiley II will step down as chairman of the board to be succeeded by his brother, Peter Wiley, in September. With their sister Deborah Wiley, senior v.p. corporate communications, the family own a controlling 49.3% stake in the company. The remaining shares are listed on the New York Stock Exchange.</p><p>
Hungry Minds doubled Wiley's professional/trade division to sales of $253m (&#163;169m), or 34% of the total, in the year to end-April. STM publishing generated US sales of $165m (&#163;110m) and higher education saw US sales of $141m (&#163;94m).</p><p>
Before the Hungry Minds purchase, the common perception of Wiley was as a solid STM and academic publisher, though its professional/trade list had been around since the mid-1980s. But while STM books and journals are consistently profitable, it has looked to professional/trade for much of its growth.</p><p>
The professional/trade list covers business--the largest part--architecture, computing, finance, psychology, travel and reference. In the US, Wiley also publishes such authors as Nigella Lawson and Melvyn Bragg. After the acquisition of Hungry Minds, it jumped from being Barnes&amp;Noble's 16th largest supplier to number six.</p><p>
Wiley Europe, based in Chichester with an operation in Germany, hopes to build its profile as a trade publisher in a similar way to its US parent. The company made sales of $164m (&#163;109m) in the year to end-April, and will publish 200 new professional/trade titles this year. Its 330 Chichester staff, currently spread over several sites, will move into a new building near Chichester railway station in September.</p><p>
Steve Smith, Wiley Europe managing director, says adding Hungry Minds' For Dummies has given the company a boost of recognition in the UK trade. "It has brought us into contact with city centre general trade stores such as Ottakar's."</p><p>
Michelle Long, director of marketing, professional/trade, has been in discussions with Ottakar's and W H Smith over promotions. Wiley took over distribution of the For Dummies titles and the Frommers travel guides from Transworld in May. "They'd had it [Dummies] since 1992 and did a very good job. But what they couldn't do was invest in the UK publishing brand," Mr Smith says.</p><p>
Wiley will publish its first UK-specific For Dummies books in autumn 2003. "There is an opportunity to extend awareness and make ourselves more visible in the UK," he says. The initial UK list of 15 titles will include Taxes for Dummies and Personal Finance for Dummies, and is expected to expand into sports. Other titles may be adapted from US editions, while some will stay the same. Jason Dunne will join as executive editor in September.</p><p>
Wiley has also formed a new consumer markets group based in Chichester to focus on brand and sales development. Under Lorraine Dunabin, consumer markets manager, it will concentrate on building brands and promotions, as well as non-trade sales.</p><p>
One of the first tasks of the consumer group will be to support a new narrative non-fiction trade list which will launch in October with Blood and Justice by Pete Moore (&#163;16.99, 0470848421), an account of the first blood transfusion. Sally Smith, publishing editor, is aiming to produce 25 new titles a year, covering biography, popular science, history and current affairs.</p><p>
"We want to diversify and to shift perceptions about us. It's also a great opportunity to add another revenue stream in Europe," Mr Smith says. The "quality" list will aim at the broadsheet reader. "We're not going to break out into the high-advance celebrity consumer market."</p><p>
Wiley's UK professional/trade list first gained recognition after the acquisition of Capstone in June 2000. The Oxford-based business publisher has worked with Wiley to develop Express Exec, an online resource for senior managers, which was backed with a &#163;1m investment. Drawn from 100 books on management, it is a searchable database split into 10 modules such as people, finance and marketing.</p><p>
Global dummies</p><p>
A "brand committee" of publishers and editors from New York, San Francisco, Sydney, Singapore, Toronto and Chichester meets twice yearly to ensure worldwide output is consistent. A global strategy on For Dummies will be developed, spreading to a new young persons' travel list, Hanging Out. Wiley rarely sells territorial rights outside the group.</p><p>
Any steps to grow further through acquisition would create a global publishing powerhouse. Mr Smith will not be drawn on possible bids. "There are lots of opportunities to grow--we're watching the market with interest."</p>