 NEW YORK (BMG Direct/ www.columbiahouse.com) - BMG Direct, a division of DirectGroup Bertelsmann, announced today that it has reached an agreement with The Blackstone Group to acquire The Columbia House Company. Terms of the deal were not disclosed. The transaction is subject to certain government approvals and other customary conditions. Stuart Goldfarb, President and CEO of BMG Direct, will serve as President and CEO of the newly acquired company. This move represents the coming together of two great brands with complementary operational structures and business models. BMG Direct is the largest direct to consumer retailer of recorded music in the U.S. while Columbia House is the largest specialized retailer of DVDs. The combined expertise of these two leading direct marketing companies will create broader product offerings for their members and a larger customer base for both brands. Ewald Walgenbach, CEO of DirectGroup Bertelsmann said, "Today is an important and exciting day for both companies and this transaction is consistent with DirectGroup's commitment to grow our worldwide businesses. We are bringing together two of the U.S.'s most respected and knowledgeable direct marketing media companies. The combined BMG Direct and Columbia House entity will offer a broader selection of products to a larger customer base, while at the same time creating cost efficiencies." Stuart Goldfarb said, "These two great brands share a focus on their customers, their employees and their products. Columbia House is the market leader in the DVD business; this transaction provides great opportunities for us and for our customers, who now will be able to access a broad selection both of music and DVD titles with the same level of customer satisfaction they've come to know and expect. " BMG Direct has long-standing relationships with its customers and has a history of expertise in being able to reach consumers personally with targeted entertainment offers. The company mails over 68 million catalogues to customers each year and operates a website (https://www.bmgmusic.com) which serves millions of customers online. Scott Flanders, Chairman and CEO of The Columbia House Company said, "We are proud of the fact that Columbia House's continued success has led to the joining of these two great brands. The pairing of BMG Direct and Columbia House will create a world class experience for our members. We very much look forward to working with Stuart Goldfarb and his team."
The Blackstone Group served as financial advisor to Columbia House. Simpson Thacher & Bartlett LLP provided Columbia House with legal counsel.
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