New York, NY --February 26, 2015. 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 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 Securities, LLC as financial adviser and Cravath, Swaine & Moore LLP as legal counsel in connection with the proposed separation.
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, 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 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.
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