wfn.org | ELCA Publishing House Adopts Acquisition Strategy

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ELCA NEWS SERVICE

October 25, 2000

ELCA PUBLISHING HOUSE ADOPTS ACQUISITION STRATEGY
00-248-JB

     MINNEAPOLIS (ELCA) -- The board of trustees for Augsburg Fortress
Publishers adopted a strategy to acquire, when necessary, related
businesses to help it expand its publishing capabilities.  The company's
plan to acquire other businesses is part of Augsburg Fortress' strategic
plan adopted by the board in early 1999.
     Augsburg Fortress is the publishing house of the Evangelical
Lutheran Church in America (ELCA).  The acquisition strategy was
discussed and approved at the board of trustees meeting here Oct. 12-14.
     To help guide the process, the board created an acquisition
committee that will work with management to explore and review
acquisition proposals.  The committee will make recommendations on
possible acquisitions to the full board, which must ratify all
proposals.
     Acquisition of related businesses is an important part of the
Augsburg Fortress' publishing strategy, said George W. Poehlman, vice
president for finance and treasurer.  Purchasing existing companies to
fulfill a need makes sense, because such companies already have "core
competencies," he said.  Unlike other mainline denominations, Augsburg
Fortress does not plan to expand its limited number of retail stores,
Poehlman said.
     "We have an opportunity to become a full-service publisher to
mainline denominations," Poehlman said.  The marketplace for the ELCA
publisher could serve as many as 30 million church members in 60,000
congregations, he said.  Augsburg Fortress' management concluded it must
gather the same resources to serve the ELCA as it needs to serve the
larger marketplace.
     "The most economically viable way to serve the ELCA well is to
serve this entire market well," Poehlman said. "We would need vastly
wider, broader, deeper resources to fill the needs of this marketplace."
     Augsburg Fortress will focus on acquisitions that will place the
publisher in a market leadership position for the product category and
companies with strong mid-level or operations management, he told the
board. There must be good planning to integrate the company with
Augsburg Fortress' operations, and redundant functions must be
eliminated, Poehlman added.
     When the acquisition committee and the board consider the possible
purchase of another company, several criteria will be used to evaluate
the company, said the Rev. Marvin L. Roloff, president and chief
executive officer.  An acquisition must enhance Augsburg Fortress'
identity and assist its mission; must contribute to its theological
integrity; must fulfill a specific market need; must match the business
strategies of Augsburg Fortress; must meet financial expectations; and
must enhance service and distribution capabilities, he said.
     Augsburg Fortress' acquisition plan will be presented to the ELCA
Office of the Bishop and will be reported to the ELCA Church Council,
Roloff said.  The council is the ELCA's interim legislative authority
between churchwide assemblies.
     "We must broaden service to customers to survive, and we must
reach out to other denominations to accomplish our mission for and on
behalf of the ELCA," said Charles C. Halberg, Augsburg Fortress
executive vice president and chief operating officer.  The company must
reach its growth goals through acquisitions or the ELCA publisher will
be reduced and its products reduced, he warned.  Competition in the
marketplace requires Augsburg Fortress to be ready to move to acquire
related companies.
     "We need to get in the game and need to get in it now," Halberg
said.
     The acquisition plan is the result of a strategic business plan
that has guided the ELCA publisher since it was adopted by the board.
It calls for Augsburg Fortress to refocus its business systems to create
a market-driven organization, broaden its focus on ELCA congregations
and the ecumenical market, develop a new marketing effort aimed at
select consumer markets, and expand its capabilities through alliances,
mergers and acquisitions.  The plan also calls for the publisher to
position  itself to become "the premier Christian communications
organization in the United States."

For information contact:
John Brooks, Director (773) 380-2958 or NEWS@ELCA.ORG
http://listserv.elca.org/archives/elcanews.html