By BART JARMAN
Two local leadership companies, Franklin Quest Co. and Covey Leadership Center, announced Wednesday that they have signed a letter of intent to merge.
The $160 million deal would combine the marketing network of Franklin Quest, creator of the Franklin Day Planner, with a leading consulting firm whose products include books, seminars and corporate training programs.
'Together these two companies represent a unique combination of ideas and market reach that will create a training and educational powerhouse,' said Hyrum Smith, chairman of Franklin Quest.
'We look forward to exploring and taking advantage of the many areas of synergy that exist so naturally between our companies,' Smith said.
Franklin Quest sells directly and through its catalog and retail stores to more than 4 million users of the Franklin Day Planner.
'The new company will be stronger as a whole than the two separate companies were,' said Richard Putnam, director of investor relations for Franklin Quest Co.
Franklin Quest Co. stock closed down seven-eighths Wednesday on the news, after swinging several points up and down during the trading session. Franklin stock has fallen overall the past 12 months.
The privately owned Covey Leadership Center has operations in 21 countries, publishes leadership and training products in 28 languages, has more than 12 million books in print and continues to sell more than 1.5 million books per year.
They are looking forward to the financial advantages of public ownership, according to Stephen M.R. Covey, president and CEO of Provo-based Covey Leadership Center.
'We acknowledge that we will have some redundant areas after we merge,' Covey said. But he added that for the time being, no changes would be made in the organization or number of employees.
According to Covey, the company should continue to experience growth, especially with the increased capital that Franklin can provide.
'I'm sure that there will be problems with integration,' he said. 'Our greatest risk is losing our focus during this time of consolidation.'
Covey reiterated the company's goal of helping individuals be more effective in their personal and professional lives.
Franklin Quest and Covey Leadership combined train more than 425,000 participants per year in time management and productivity skills.
'This merger will allow both companies to better meet the challenges of a fast growing global market, which is demanding products and programs that increase productivity and develop leadership skills,' said Stephen R. Covey, chairman of the Covey Leadership Center.
'Our organizations share a common philosophy and approach based on our mutual belief in the power of principles to improve individual and organizational effectiveness,' Covey said.
'We believe the opportunity to distribute Covey Leadership Center products and services through the Franklin distribution channels will accelerate our ability to reach more customers,' Covey said.
According to Covey, the new company's headquarters will be in Salt Lake City. The planned move of Covey Leadership to its new Provo building under construction will still take place in a couple of weeks, and the younger Covey executive, Stephen M.R. Covey, will remain in place as president of the center.
The new company, Franklin Covey Co., will be led by co-chairmen Stephen R. Covey and Hyrum Smith.
Franklin Covey Co. will boast combined revenues of approximately $455 million, operating more than 100 stores, and having a client base that includes more than half of the Fortune 500 companies as well as thousands of mid-size and small companies, government entities, educational institutions, communities, families and millions of individual customers.
The transaction will involve the issuance of Franklin Quest stock in exchange for all of the stock of Covey Leadership Center.
The merger, which has been approved by the board of directors of each company, is subject to satisfactory completion of due diligence and approval by the shareholders of both companies.
Covey said the transaction should close by the end of May at the latest.