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
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About the Evangelical Lutheran Church in America:
The ELCA is one of the largest Christian denominations in the United States, with 2.8 million members in more than 8,500 worshiping communities across the 50 states and in the Caribbean region. Known as the church of "God's work. Our hands.," the ELCA emphasizes the saving grace of God through faith in Jesus Christ, unity among Christians and service in the world. The ELCA's roots are in the writings of the German church reformer Martin Luther.
For information contact:
Candice Hill Buchbinder
Public Relations Manager
Candice.HillBuchbinder@ELCA.org
