Newspapers invest in private delivery firm p.

By: George Garneau

THREE NEWSPAPER COMPANIES liked the idea of private mail delivery so much that they invested in a growing private mailer.
Units of Tribune Co., E.W. Scripps Co. and Capital Cities/ABC Inc. have purchased debentures that are convertible to equity in Alternate Postal Delivery Inc. of Grand Rapids, Mich.
The company is now owned by Stan Henry and Phillip D. Miller, who each own 50%. If the investors exercise all options to buy common shares, Henry and Miller would retain controlling interest. The amount of the investment was not disclosed, but one of the investors' executives said, "It's not a seven-figure amount, and it's not convertible into a major share of the company."
All three companies have agreements in which their subsidiaries deliver second- and third-class addressed mail, mostly magazines and catalogs, in local markets under contract with APD, which in turn contracts with national marketers and publishers.
"Alternate delivery plays an important role in helping the newspaper industry evolve from solely mass marketers to target marketers," said Robert Holzkamp, Tribune Newspaper Co. sales and marketing vice president. "We see our support of the firm as a smart business decision, as the company's growth is a win for all of us."
Cap Cities/ABC publishing group president Phillip Meek called alternate delivery "an important adjunct to the newspaper business" that helps newspapers become "the primary provider of a full spectrum of print information."
Private mailers say their rates are lower than the U.S. Postal Service's. Affiliates, often subsidiaries of newspaper companies, also sell advertising to local retailers who want to reach consumers based on their likelihood to become customers.
APD said it will use the capital infusion to expand its network of local delivery operations to 100 of the largest U.S. cities, increase regional sales staff, build teams to help new affiliates get started and speed installation of its new database system.
APD currently counts 58 affiliates and hopes to reach 70 by year's end.
"This financing allows us to stay independent while still being mentored by our friends and colleagues in the newspaper industry," APD chairman Stan Henry said.