Wolters Kluwer NV
Address:
Stadhouderskade 1
P.O. Box 818
NL-1000 AV Amsterdam
The Netherlands
Telephone: (31) 20-6070400
Fax: (31) 20-6070490
http://www.wolterskluwer.com
Statistics:
Public Company
Incorporated: 1882
Employees: 16,500
Sales: EUR 3.08 billion ($6.03 billion) (1999)
Stock Exchanges: Amsterdam
Ticker Symbol: WTKWY
NAIC: 51113 Book Publishers; 51114 Database and Directory Publishers
Company Perspectives:
Wolters Kluwer's mission is to provide comprehensive, authoritative, and reliable print and electronic products and services that help professionals reduce costs, boost productivity, and increase the efficiency and effectiveness of their work processes.
Key Dates:
1836: J.B. Wolters founds Schoolbook publishing house.
1858: P. Noordhoff establishes Noordhoff publishing house.
1886: Nicolaas Samson leaves civil service to run his eponymous publishing business on a full-time basis.
1891: Ebele E. Kluwer publishes his first textbook.
1968: Schoolbook (now known as J.B. Wolters Publishing Company) and Noordhoff merge.
1970: Samson publishing merges with A.W. Sijthoff to form the Information and Communications Union (ICU).
1972: Wolters-Noordhoff merges with ICU and takes its name.
1983: ICU changes its name to Wolters-Samson.
1987: Kluwer merges with Wolters-Samson to fend off hostile takeover bid by Elsevier; the new entity is called Wolters Kluwer.
1990: Company purchases J.B. Lippincott and Company from HarperCollins.
1996: Wolters Kluwer spends $1.9 billion for tax and business materials publisher CCH, Inc.
Company History:
Wolters Kluwer NV is one of the worldwide leaders in publishing, and the Netherlands' second largest publisher after Reed Elsevier, with US$6.03 billion in sales in 1998. Under the slogan 'Creating Value for Professionals,' Wolters Kluwer and its subsidiaries are primarily active in the specialized publishing markets of business, law, tax, medicine, education, science, professional training, and electronic publishing, while maintaining only a limited presence in general consumer and trade publishing. With operations in various European countries, the United States, Canada, and several Asian nations, Wolters Kluwer has pursued a growth strategy dominated by strategic acquisitions, though it has begun to focus on deriving more of its growth from the development of its existing properties.
19th-Century Roots
The modern incarnation of Wolters Kluwer of the 1990s traces its origins to four Dutch publishing families of the 19th century: Wolters, Noordhoff, Kluwer, and Samson. During that century, the Industrial Revolution, combined with constitutional and legal reforms that more closely united the formerly loose association of Dutch provinces, prompted a growing demand for educational and informational literature. Many publishers, print shops, and typographers responded to this demand, numbering some 600 by the end of the 1880s. Until the 20th century, however, publishing in the Netherlands remained the province of small-scale, often family-run businesses with fewer than ten employees. The first large publishing house, the Elsevier Bookselling and Publishing Company, appeared in Amsterdam in 1881, but remained an exception for some time to come.
J.B. Wolters founded the Schoolbook publishing house--later to be called the J.B. Wolters Publishing Company--in the provincial capital city of Groningen in 1836, providing educational and instructional materials for a country just beginning the transformation to a modern industrial economy. Wolters was childless, and upon his death in 1860, his brother-in-law, E.B. ter Horst, took over the company. Under ter Horst the company began a period of expansion, adding a printing shop and bindery to its editorial functions. Ter Horst brought his son, E.B. ter Horst, Jr., into the company in 1885, and ter Horst, Jr., was made a partner in the company eight years later. Disagreements between father and son led the senior ter Horst to leave the company soon afterwards. Ter Horst, Jr., led the company until his death in 1905. By then, the company's fortunes had fallen, to the point where the heirs to the company, ter Horst, Jr.'s half-brothers F.R. and A. ter Horst, considered closing the company. Instead, the brothers reorganized the company from a partnership into a corporation, and for the first time brought in directors from outside the family. F.R. ter Horst, formerly a banking professional, became the company's managing director, overseeing the editorial portions of its textbook and academic publishing activities from his home in The Hague. The company's production facilities remained in Groningen.
In 1915 a separate office was opened in The Hague. Two years later Dr. Anthony M.H. Schepman, who was married to a niece of F.R. ter Horst, joined the J.B. Wolters Company and was soon named a director of the company, a position he held for more than 40 years. Under the joint leadership of ter Horst and Schepman, the company continued to expand its operations. In 1920 the company opened an office in what is now known as Jakarta, Indonesia, in the Dutch East Indies, to provide books for the Dutch-speaking population there. Setbacks for the company came with the Depression of the 1930s, and the introduction of modern Dutch spelling, which removed many Germanisms from the Dutch grammar and spelling and rendered many of Wolters' titles obsolete. These setbacks resulted in a shutdown of its Hague offices. World War II, during which Schepman was interned as a member of the Dutch elite in a German concentration camp, added to the company's difficulties. After the war, and especially after Indonesia achieved its independence in 1949, the company enjoyed a period of enhanced prosperity. Wolters also moved into the Flemish-speaking areas of Belgium, especially with the promotion of Algemeen Beschaafd Nederlands (or ABN, a standardization of the language similar to Standard Received English) over the many Dutch and Flemish dialects still spoken throughout both countries. However, in 1954, the Republic of Indonesia moved to prohibit the importation of Indonesian-language books printed outside the country. The J.B. Wolters-Djarkata division attempted to set up printing facilities in Indonesia, but in 1959, Indonesia nationalized many of the foreign companies operating there, including J.B. Wolters-Djarkata.
Convergence in the Late 1960s and Early 1970s
By then, a postwar wave of mergers across Dutch industry had begun to affect the publishing industry as well. The era of the small family publishing house was fading. The Noordhoff publishing house, founded in 1858 by P. Noordhoff to serve the educational and vocational market, was located directly next door to Wolters' offices in Groningen, and was still managed by the Noordhoff family. Driven by the increasingly competitive nature of the Dutch publishing industry, Noordhoff approached Wolters about merging the two companies. Wolters, nearly three times the size of Noordhoff but facing the same competition from much larger publishing companies, agreed. The merger of the two houses was accomplished in 1968, literally by the breaking down of the wall that had long separated their offices. The next phase in Wolters' history followed four years later, when it merged with the Information and Communication Group, which had been formed from an earlier merger with the Samson publishing family.
Nicolaas Samson's publishing career began as an offshoot of his civil service career in the Dutch village of Hazerswoude. As the recent modernization of Dutch law was slowly reaching from the larger cities to the outlying provinces, the need arose for new administrative materials and forms, which Samson provided. Samson's operated first in an office of the town hall, but by 1883 he had moved his publishing activities, including printing shop, bindery, and warehouse, to offices next to his home in Alphen aan den Rijn. In 1886 Samson left the civil service to operate his publishing business full time. At first Samson's business concentrated on administrative forms, but he soon added periodicals and books for the administrative market. In 1888 Samson's oldest son, Jacobus Balthus, joined the company; he was joined by his younger brothers Nicolaas and Willem in 1914 and 1915. After a brief period of financial difficulty, Samson's sons took over the company and expanded its operations.
Samson died in 1917. By then, the company had achieved a national reputation; it also maintained strong ties with the government. The company added educational materials and related forms and services to its list in 1920. Samson continued to prosper, yet always remained close to its core business. In 1970 Samson merged with the publisher A.W. Sijthoff, forming the Information and Communication Union (ICU), which merged with Wolters-Noordhoff two years later. The new company adopted the ICU name but in 1983 changed its name again, to Wolters-Samson.
The final branch of Wolters-Kluwer was founded in the 1880s in Deventer, in the eastern Netherlands, by Ebele E. Kluwer. Kluwer began as a bookseller. By 1891 he had published his first book, on arithmetic, called The Thinker, which was directed at the secondary school market. For many years, Kluwer concentrated on the educational and academic market, including children's books. In 1892 Kluwer published one of the first trade papers aimed at the educational market, called De Sollicitant. Several years later he initiated a successful series of picture books. Another of Kluwer's publications was De Nederlandsche Jager, a trade periodical for hunters. Within a decade, Kluwer expanded to include business information and technical works, and soon after into tax and professional publications as well. In 1909 Kluwer published De Vakstudie tax series, which provided purchasers with periodic supplements of updated information. By 1920 Kluwer was publishing similar works for other professional areas, by then in a more easily updated looseleaf binder form. These series were extremely profitable for the company, fueling its expansion and remaining one of its most important markets. Kluwer's sons, Evert, Nico, and Eben, joined the firm between 1914 and 1921, and his daughters and their husbands also became involved in the company. Kluwer died in 1929, leaving the company to his sons. Kluwer Publishers remained a family concern, growing to become the Netherlands' third largest publisher, with subsidiaries in the United States and elsewhere, with revenues of 966 million guilders, by 1986.
Consolidation in the 1980s
The Netherlands were largely untouched by the wave of hostile takeovers that marked the 1980s. That changed in 1987, when Elsevier, the country's largest publishing house, announced its intention to buy up Kluwer's stock. A year earlier, Elsevier had initiated talks with Kluwer to suggest a merger between the two companies. Kluwer rejected the plan, pointing to differences in corporate cultures. In June 1987, Elsevier announced a bid of 390 guilders per Kluwer share, which had been worth only 266 guilders per share two weeks before. Kluwer responded by issuing another 2.5 million common shares and beginning talks with Wolters Samson about a possible friendly merger between the two companies. Kluwer's preference for a merger with the smaller house of Wolters Samson was explained by the greater similarity between the two companies' corporate cultures, and in the similarity in their publishing focus. Shortly thereafter, Kluwer issued an additional two million shares of preferential stock to Wolters Samson, vowing to do whatever necessary to stop Elsevier's takeover bid. By August 3rd, however, Elsevier had won control of 48.2 percent of Kluwer's stock, spending 25 million guilders in the final days to acquire it. However, by August 14, Wolters Samson was able to announce that it had acquired 50.9 percent of Kluwer's outstanding common stock, effecting the merger of their two companies. The new company, called Wolters Kluwer NV, moved its headquarters to Amsterdam. In the final count, Elsevier retained approximately 33 percent of the new company's shares; in 1990 it announced its intention to sell these shares, surrendering, for the time being, the idea of a merger between the two companies. Analysts, however, continued to predict that the firms would eventually join forces.
Growth of a Giant
With the merger, Wolters Kluwer became the Netherlands' second largest publisher. With international holdings including the U.S. subsidiaries Kluwer Law Book Publishing Company, Raven Press, Aspen Systems, and others, Wolters Kluwer entered a period of foreign acquisitions. Over the next two years the company extended into France, West Germany, and Spain. By 1989, roughly 44 percent of its revenues were earned in foreign markets. The pending formation of the European market opened a lucrative arena for the company's well-developed tax and legal publishing arms. The company increased its focus on these areas, dropping several of its Dutch trade and consumer publishers, including Bert Bakker and Martinus Nijhoff International. Its acquisitions continued, with purchases of the IPSOA Editore of Italy, Kieser Verlag of Germany, Tecnipublicaciones of Spain, and Tele Consulte of France. In 1990 the company moved to strengthen its share of the U.S. medical market, completing the US$250 million purchase of the 200-year-old J.B. Lippincott and Company from HarperCollins. By that year, Wolters Kluwer included nearly 100 companies, posting annual revenues of more than two billion guilders.
Lippincott had been founded in 1836, when Joshua B. Lippincott opened J.B. Lippincott & Co. in Philadelphia; Lippincott's 1849 purchase of Grigg, Elliot & Co., then the world's largest book distributor, allowed him to extend his company's anniversary to the other company's 1792 founding date. The company grew quickly, with medical publications featuring prominently among its titles. After overseeing the incorporation of his company in 1885, Lippincott died the following year, leaving the firm to his three sons. By the end of the century, Lippincott was one of the three largest U.S. publishers. In addition to its medical list, it published for the educational market; however, it was best known for its trade books, which accounted for approximately 50 percent of its business. In the 1950s, however, the company reasserted its interest in other markets, particularly in medical and nursing books and journals. It also expanded its educational and college offerings, placing less and less emphasis on trade books. A major event occurred in 1972, when, finding itself undercapitalized, the company was forced to go public, with the Lippincott family retaining majority ownership. The new corporation launched a period of aggressive expansion, entering new markets and extending its established divisions. By 1977, however, rising costs and other factors had increased the company's debt-to-equity ratio to two to one. The following year, Lippincott was purchased by Harper & Row. Lippincott's activities were pared down to a core focused around medical and nursing books and journals. This formula proved successful; by the time Lippincott was purchased by Wolters Kluwer, its revenues had risen by 500 percent.
The opening of European borders in 1992 meant increasing numbers of new laws and regulations that would need to be translated into many languages. Wolters Kluwer stepped up the internationalization of its activities, concentrating on the most highly developed countries of the European Union. By 1993 its international sales represented 62 percent of its yearly revenues. Its European sales outside of the Netherlands accounted for 45 percent of its total revenues, the United States for 11 percent, and the Netherlands for 37 percent. Wolters Kluwer continued acquiring companies, including Liber in Sweden in 1993. The company established its first Eastern European subsidiary, IURA Edition, in Bratislava, Slovakia, and announced intentions for further Eastern European expansion. Electronic media, including computer diskettes, CD-ROMs, and CD-I technology, had become another growing area for Wolters Kluwer, accounting for six percent of its sales in 1994.
Continued Expansion to Close Out the 20th Century
The year 1995 proved to be another busy one for the company, as it acquired a slew of businesses, including Jugend & Volk (Austria); Dalian (France); Fateco Fîrlag and Juristfîrlaget (Sweden); Deutscher Kommunal-Verlag Dr. Naujoks & Behrendt (Germany); and Colex Data (Spain). The same year, Lippincott and Raven Press, a medical publisher, were merged to form Lippincott-Raven Publishers. By now, the firm operated in 16 countries and had over 8,000 employees. Yet it was still not done growing. In 1996, Wolters Kluwer completed a significant purchase when it spent US$1.9 billion to take over a prominent U.S. publisher of tax and business materials, CCH, Inc. This acquisition greatly strengthened Wolters Kluwer's position in that segment of the U.S. publishing market. To build on this achievement, the company bought several other businesses over the next few years (including Bankers Systems, Inc. and two divisions of the West Group's Information America unit) and rolled them into CCH's operations. This division also came to play a prominent role in Wolters Kluwer's operations in Asia, as CCH arms did business in Australia, New Zealand, Japan, Singapore, and Hong Kong.
The company enjoyed continued success in 1997. Total sales and net income both rose 21 percent over 1996 levels, thanks mainly to strategic acquisitions. Wolters Kluwer's operations in Germany, France, the United Kingdom, and the United States were particularly profitable. Despite these gains, speculation remained rife that Wolters Kluwer would be taken over by Elsevier (now Reed Elsevier, after the latter's merger with another publishing powerhouse, Reed International, PLC). These predictions were nearly borne out when the firms announced a proposed merger in October 1997. The deal fell through in March 1998, however, when Wolters Kluwer decided that the divestments that would be required to secure regulatory approval for the transaction were too high a price to pay.
In the wake of this incident, Wolters Kluwer convened a working group of managers from its operations around the world to devise a plan for the next phase of the company's growth and development. The resulting 'Strategic Agenda 2002' led the company to decide to refocus its business on several core competencies. Specifically, Wolters Kluwer opted to concentrate on its operations in the legal and tax publishing, business publishing, medical/scientific publishing, and educational publishing/professional training realms. To achieve this goal, the company continued to acquire firms that could bolster its efforts in these areas, and to divest itself of holdings that fell outside them. For example, in August 1999, Wolters Kluwer sold its Wayland Publishers unit, because that division published children's books--a field in which the company no longer wished to compete. On the other hand, the company made three acquisitions in 1998 that dramatically heightened its profile in the medical/scientific publishing industry, bringing Waverly, Inc., Ovid Technologies, Inc., and Plenum Publishing Corporation into its fold.
'Strategic Agenda 2002' also identified the growing importance that electronic and online media would have in the publishing world. Wolters Kluwer was acutely aware of the risk that its traditional paper offering could be rendered obsolete if it failed to stay abreast of the technological developments cascading through the industry. As a result, the company rededicated itself to integrating new media into its traditional methods of presentation (electronic publishing had provided nearly 19 percent of the firm's revenues as far back as 1996, a figure the company expected to grow significantly in subsequent years). To this end, the company's Kluwers Academic Publishers division joined a 12-firm consortium in November 1999 that was striving to revamp the way scientists use the Internet to conduct research. The aim of this partnership was to bridge gaps between otherwise independent and disconnected databases (the databases' proprietary owners remained free to set the terms of access, however). Moreover, Wolters Kluwer stepped up its efforts to provide high-level customer service and to develop innovative hardware and software in order to expand the range of options its customers had at their disposal to access the breadth of the company's information sources. With its newly streamlined organization and a clear view of both the challenges and opportunities before it, Wolters Kluwer appeared poised to flourish in the 21st century.
Principal Subsidiaries: CCH, Inc.; Aspen Publishers; Ovid Technologies, Inc.; Kluwer Academic Publishers; Lippincott-Raven Publishers; Stanley Thornes.
Principal Competitors: Reed Elsevier; Thomson Corporation; VNU N.V.
Further Reading:
de Vries, Johan, Four Windows of Opportunity: A Study in Publishing, Amsterdam: Wolters Kluwer, 1995.
duBois, Martin, 'Reed Elsevier and Wolters Kluwer End Merger Plans After Concerns at EU,' Wall Street Journal, March 10, 1998.
Feldman, Gayle, 'Going Dutch,' Publishers Weekly, June 21, 1991.
Hagerty, Bob, 'Esoteric Publisher Avoids the Obvious,' Wall Street Journal (Europe), April 25, 1990.
'John Wiley and Sons: Reference Linking Service Announces Name,' M2 Presswire, December 10, 1999.
Milliot, Jim, 'Wolters Kluwer to Buy Waverly,' Publishers Weekly, February 16, 1998.
Scott, Robert W., 'With $1.9 Billion Sale, CCH Gains Dutch Uncle,' Accounting Today, December 11, 1995.
'Wolters Kluwer Bolsters Healthcare Unit with $200 Million Ovid Buy,' Electronic Information Report, October 16, 1998.
Source: International Directory of Company Histories, Vol. 33. St. James Press, 2000.
