Comag Marketing Group, the Princeton, New Jersey-based national magazine distributor jointly owned by Hearst and Condé Nast, has been sold to the Jim Pattison Group. The deal signals the exit of the two publishers from the magazine distribution business and is being positioned as an effort to heal a newsstand supply chain that’s long been fraught with competing interests and inefficiencies.

Jay Felts will continue as CMG‘s president and the company’s headquarters will remain in Princeton. Michael Korenberg, JPG’s vice chairman, will become chairman of CMG. The deal does not include CMG UK, which will continue to be owned by National Magazine Company Ltd. and Condé Nast UK.

According to Korenberg, Hearst and Condé Nast had not put Comag on the block, but after about a year of conversations, a deal became a more viable option.

The deal greatly expands JPG’s reach into the market. JPG is based in Vancouver, BC and owns wholesaler The News Group, which bought Anderson News’ assets when that wholesaler shut down in 2009. The News Group is estimated to have about a 50 percent market share in the U.S.

Nevertheless, Felts says the deal more effectively smooths out the supply chain.

"This more properly aligns the incentives between all the supply chain partners," he tells Folio:. "To me, the most optimistic takeaway is this is going to move us away form the unfortunate intra-channel tension that’s there today and move toward driving more to the top line."

From the perspective of Hearst and Condé Nast, the two publishers can turn their focus on publishing magazines, but Hearst Magazines executive vice president and general managerJohn Loughlin says the capital that’s not being directed at CMG will now be funneled back into the marketing and promotion of the channel. "We get two mutually reinforcing benefits. We eliminate redundancies and Hearst and Condé Nast are going to use those savings to reinvest back into the channel for marketing and promotion."

Felts, Korenberg and Loughlin declined to offer specifics on sale price.

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