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NEW YORK (

TheStreet

) --

Barnes & Noble

(BKS) - Get Barnes & Noble, Inc. Report

is hitting the textbooks just in time for back-to-school.

The company is purchasing Barnes & Noble College Booksellers from its chairman in a deal that's valued at $596 million, but will actually cost Barnes & Noble $460 million for the cash on hand of College Booksellers.

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The move is expected to boost Barnes & Noble's full-year earnings per share between 30% and 35% and eliminate annual royalty payments for online textbook sales.

Since Chairman Leonard Riggio owns the college bookstores, Barnes & Noble set up a special committee of independent directors to evaluate the transaction and negotiate terms.

Barnes & Noble also said it received commitment for a new $1 billion revolving credit line that will help fund the purchase and replace its existing lines, as well as those of College Booksellers.

College Booksellers operates 624 college bookstores nationwide and recorded revenue of $1.8 billion and same-store sales growth of 1% in its fiscal year ended May 2.

This compares with a 5.4% decline in same-store sales at Barnes & Noble. The company said in May that it expects full-year earnings in the range of $1.10 to $1.40 a share.

The deal is expected to close around Oct. 1.

-- Reported by Jeanine Poggi in New York.

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