Diamond Comic Distributors acquires Capital City Distribution; Comic distribution industry stabilized by purchase

Business Wire, July 26, 1996

TIMONIUM, Md.--(BUSINESS WIRE)--July 26, 1996--Diamond Comic Distributors, Inc. President and CEO Steve Geppi announced today that he has acquired selected assets of the Madison, Wis.-based Capital City Distribution.

With his Timonium, Md. headquartered company already a recognized leader in the comic and entertainment related distribution industry, Geppi stated that this acquisition was "a reinvestment in the long term health of the comic industry."

When the comic distribution business was dramatically altered in early 1995 by the announcement that Marvel Comics would begin direct distribution of its comics, Geppi quickly formed a strategic alliance with Marvel's chief competitor, DC Comics and other top comic publishers. Consequently, Diamond was able to maintain a healthy market position in a rapidly evolving business. Capital City likewise formed strategic alliances with a number of suppliers, but was nonetheless seriously stressed by the paradigm shift in distribution.

The purchase price of Capital City's selected assets was not disclosed by mutual agreement of both parties, but it is expected that this acquisition will bring an estimated $50 million in sales revenue to Diamond.

Geppi disclosed that Diamond is finalizing plans to enhance services to all of its customers. He also indicated that comic book specialty shops will benefit from cost savings as a result of consolidated orders and shipments.

"Capital City co-founders Milton Griepp and John Davis have taken actions which should satisfy their obligations and provide uninterrupted service to their suppliers and customers, while also garnering a fair rate of return on a company they worked so hard to build over the years. They are to be commended. What's more, I want to thank all of the Diamond employees who have worked so hard over the years to put us in a position or make this acquisition, and to give special recognition to Executive Vice President and COO Chuck Parker and Vice President of Finance Larry Swanson for all the effort they put into helping to negotiate this deal," Geppi concluded.

CONTACT: Diamond Comic Distributors, Inc.

Charles Degliomini, 516/248-6300