Barnes & Noble's stock leapt more than 10 percent after it announced the purchase of the privately held subsidiary of Ingram Industries. The deal is expected to dramatically expand Barnes & Noble's distribution network, with more than 80 percent of the company's online and retail customers within overnight delivery distance from 11 distribution centers.
The Ingram Book Group will continue to supply books to current customers including independent bookstores, specialty retailers, and libraries, in the United States and abroad.
Barnes & Noble will pay $200 million in cash and $400 million in stock for the acquisition. The group includes Ingram Book Company, a leading wholesaler of general trade books; Ingram Periodicals; and Spring Arbor Distributors.
Rival Amazon.com orders books from Ingram, and how Ingram's new relationship with Barnes & Noble will affect Amazon, as well as other competitors, remains to be seen.
Shares of Barnes & Noble finished the day up nearly 11 percent to 34.25, as Amazon shares fell 3 percent to 124.5625.
The agreement was announced jointly by Barnes & Noble chairman Leonard Riggio and Ingram Book Group chair John Ingram. Ingram will serve as a vice chairman at Barnes & Noble, and become a member of the board of directors. He will also continue to serve as chairman of Ingram.
"This acquisition enables us to deliver books much faster and more cost-effectively," Riggio said in a statement. "For starters, let me say that it will enable us to create a strategic business unit which will revolutionize book distribution in the next century. Not only will we be capable of quickly delivering every book in print, but through Lightning Print, and through our network of affiliates, we intend to facilitate rapid deliveries of millions of titles which are now out of print.
"This sets up to be a virtual bonanza for every book lover in the world," he added.
In October, German publishing giant Bertelsmann AG paid $200 million for a 50-50 joint venture with Barnes & Noble's online unit barnesandnoble.com. Both companies said they planned to contribute another $100 million to the venture.