Longhorn bought out Apex Publishers and paid Sh13.1 million (Tsh248 million) one-off to acquire the entire firm’s intellectual property rights.
Longhorn has fully acquired the works of Saleh Shamsudin, a well-known Tanzanian author who has churned out English titles in the field of geography, history and social studies for upper primary schools.
The deal marks Longhorn’s second acquisition in Tanzania which currently accounts for nine per cent of total book sales.
Longhorn Publishers has acquired 15 school book titles from a renowned Tanzanian author who writes in English, seeking to capitalise on the growing number of parents taking their children to private academies that teach in the language.
The NSE-listed publisher which earns one-third of its total sales from outside Kenya, Thursday announced that it had bought out Apex Publishers and paid Sh13.1 million (Tsh248 million) one-off to acquire the entire firm’s intellectual property rights.
Longhorn has fully acquired the works of Saleh Shamsudin, a well-known Tanzanian author who has churned out English titles in the field of geography, history and social studies for upper primary schools.
The book company said it is seeking to exploit increased demand for English books by schools that use the language as the medium of instruction.
“There is a short supply of titles for the English medium schools in Tanzania. Most parents want their children to acquire fluency in English and are investing heavily in education,” said Musyoki Muli, Longhorn’s managing director.
Mr Shamsudin, the sole proprietor of Apex, will earn royalties at the rate of 12 per cent based on the cover price of his titles that have been acquired by Longhorn Publishers.
The deal marks Longhorn’s second acquisition in Tanzania which currently accounts for nine per cent of total book sales.
In January 2012, Longhorn completed a Sh12.5 million takeover of Dar-es-Salaam-based Delah Publishers to grow its revenue in the Tanzanian market.
“This acquisition has since proved to be the company’s cash cow,” Mr Muli said. “Growth through acquisition is always faster. We want to grow our market share in Tanzania,” he added.
A study by Longhorn shows that there are about 1,170 registered English medium schools in Tanzania with a total population of 585,000 pupils. There are a further 300 unregistered schools estimated to have 100,000 learners.
“This market segment presents a huge opportunity for our Tanzania subsidiary to provide English-based learning materials,” he said.
Mr Muli disclosed that the Tanzanian subsidiary sank into the red in the year ended June 2014, attributed to high distribution costs which were shouldered by the firm as an incentive to woo schools.
The Tanzania unit had made a profit before tax of Sh14.3 million in the period ended June 2013.
The publisher is targeting Sh65 million sales this year and Sh130 million in the next fiscal year from Mr Shamsudin’s titles, which cover Standard 3 to 7 in geography, history and social studies.
This means Mr Shamsudin is set to earn Sh7.8 million in royalties this year and 15.6 million in the period to June 2016.
Book sales jumped by more than a third to Sh1.3 billion from Sh1.03 billion a year earlier helped by exports to Malawi, Rwanda, Tanzania and Uganda, and increased sales in the local market.
The textbook segment, mostly government book purchases, makes up 85 per cent of Longhorn’s annual sales in the region.
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