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Times Mirror on Monday said it plans to buy the college textbook subsidiary of Dow Jones & Co., Richard D. Irwin Inc., for $135 million cash.
The sale, which is expected to be completed in February, would give Times Mirror what it called a "flagship" company on which it hopes to build a college textbook publishing operation.
Irwin, based in Homewood, Ill., is the largest publisher of business and economic textbooks in the country. With 1986 revenue of $57.2 million, it ranks as the nation's eighth-largest college textbook publisher. It also publishes some books for business professionals.
Textbook publishers have proven attractive acquisitions in the last year or so. In 1986, for instance, Time Inc. paid $520 million to acquire Scott, Foresman & Co., publisher of such elementary texts as the Dick and Jane reader series.
20% Profit Margins
While producing schoolbooks may lack the glamour of publishing novels, it is usually more profitable. Pretax profit margins on textbooks usually run 17% to 20% of sales, analysts said, and publishing them is usually less influenced by economic cycles.
But analysts described the price Times Mirror agreed to pay for Irwin as high. It likely exceeds the 10 times annual...