School Specialty, Inc. Announces the Acquisition of Two 'Traditional Companies' in California Acquisition Highlights



-- The addition of more than $24 million in combined revenues to School

Specialty.

-- Extends California penetration to sales of more than $10 per student.

-- Expands experienced sales force by 19 reps.

-- Effective purchase price combined 4.9 X EBITDA



    APPLETON, Wis., May 18 /PRNewswire/ -- School Specialty, Inc.
 (Nasdaq:   SCHS), announced today the acquisition of two companies located in
 California that will significantly increase the Company's sales/student
 penetration levels in the largest K-12 student population state.  The
 acquisitions could add more than $24 million to School Specialty's annual
 revenues.  Terms of the acquisition, which was half cash and half stock, were
 not disclosed.
     "School Specialty is extremely excited about these acquisitions for
 several reasons," stated Daniel Spalding, chairman and chief executive
 officer.  "First, these are the first two 'traditional' school supply
 companies we have acquired since School Specialty acquired its No.1
 competitor, Beckley Cardy, in August of 1998.
     "Moreover," Spalding continued, "the combined sales force of these two
 companies -- 19 experienced sales representatives -- brings a wealth of
 knowledge and experience specifically focused on serving customers in the
 State of California."
     According to Spalding, combined with current School Specialty revenues,
 these acquisitions make School Specialty the dominant force in educational
 supply sales in California increasing sales penetration from approximately
 $6 to more than $10 per student within this state.  The acquired companies
 are:
 
     --  Audio/Graphics, located in Ontario, California, was founded in 1961
         and sells school furnishings and audio/visual equipment to the K-12
         schools in southern California.  Founder, Ted DeGroot, Chairman and
         CEO, will continue to manage Audio/Graphics through the transition.
     --  Holsinger, Inc. located in Menlo Park, California, has been selling
         school furnishings in northern California since 1948.  President,
         Chris Lirely, and his management team will continue to manage
         Holsinger.
 
     According to management, the respective valuations of the two acquisitions
 give a multiple of 4.9 historical EBITDA as well as approximately 27 as a
 percentage of revenues.  "Another large benefit to these acquisitions," added
 Spalding," is that, combined with our recent expansion in California, we will
 be able to consider further consolidation of facilities to better serve our
 customers throughout the western United States."
     School Specialty, Inc., "The Nation's Education Resource," is the largest
 supplier of non-textbook education products to educators in the United States.
 School Specialty offers over 60,000 different products to more than 108,000
 schools throughout the United States.  The company produces nine different
 catalogs, and mails over 10 million catalogs to customers each year, servicing
 these customers with approximately 2,200 employees.  School Specialty has a
 diversified approach to the market, with its School Specialty and Beckley-
 Cardy brands focused on serving administrators and procurement specialists
 with a national sales force, and its eight specialty direct brands --
 ClassroomDirect.com, Childcraft, Sax Arts & Crafts, Hammond & Stephens,
 Gresswell, Frey Scientific, Brodhead Garrett and Sportime -- serving teachers
 and curriculum specialists.
     This press release shall not constitute an offer to sell or the
 solicitation of an offer to buy nor shall there be any sale of these
 securities in any state in which such offer, solicitation or sale would be
 unlawful prior to registration or qualification under the securities laws of
 any such state.
     For more information about School Specialty, Inc. toll-free via fax, dial
 1-800-PRO-INFO or 1-800-776-4636, follow the voice menu prompts and enter the
 company code "SCHS" or 7247 on any touch tone phone.
 
 

SOURCE School Specialty, Inc.

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