Scholastic Corporation Acquires Klutz

Posted on March 8, 2002

Scholastic Corporation announced that it has reached an agreement to acquire Klutz, a publisher and creator of unusual books for children from Corus Entertainment, Inc., a media and entertainment company based in Canada. Scholastic's initial payment will be approximately $43 million, with additional payments possible based on the performance of Klutz over the next three years.

In announcing the acquisition, Richard Robinson, Scholastic's Chairman, President and CEO said, "Klutz brings a remarkable freshness and relevance to children's publishing, packaging books and play components in an engaging format that kids want to pick up and own. We're confident that Scholastic can further leverage Klutz products through our broad distribution network of school book clubs and school book fairs around the world. Klutz and John Cassidy have displayed a kind of publishing magic and style, combining children's fun and children's learning in a wonderful package. Klutz' reputation for innovation will bring further luster to our company."

Based in Palo Alto, California, Klutz began its corporate life in 1977 with the book-and-beanbags set Juggling for the Complete Klutz by founder Klutz John Cassidy. Klutz, has over 150 active titles in print and has sold more than 60 million books worldwide. Klutz had revenue of approximately $39 million in its last fiscal year ended August 31, 2001.

The publishing of Juggling for the Complete Klutz led to a new form of how-to book publishing -- featuring books that come packaged with the "tools of the trade." Klutz established a new category of experiential books, such as Face Painting and Nail Art, designed for doing, not just reading.

John Cassidy, founder of Klutz said, "Klutz is thrilled to be a part of the Scholastic family. Both companies share a desire to create quality products that educate, entertain, and delight kids and parents alike. This partnership will help us further our goal to get Klutz products into the hands of more kids. And importantly, Scholastic supports our mission to create wonderful things, be good, and have fun."

Klutz will be a part of Scholastic's Children's Book Publishing and Distribution division, reporting to Barbara Marcus, President of the division. Klutz will operate independently, maintaining its headquarters in Palo Alto, California. Chris Deyo, President of Klutz, will report to Barbara Marcus. Founder John Cassidy will continue in his role of Chief Creative Officer. Klutz' business functions, including sales, marketing, finance, editorial, and production will continue to support the day-to-day business operations.

Corus Entertainment acquired Klutz in November 2000 as part of their acquisition of Nelvana Limited, one of the world's leading animation companies, home to classic children's characters including, Babar, Little Bear, and Franklin the Turtle. Corus elected to sell Klutz as part of a previously announced consolidation and debt reduction strategy that focuses on their core radio and television assets.