Tag: acquisition

Amazon has sent shockwaves through the food retailing business with its near $14-billion acquisition of natural and organic food chain Whole Foods.

The move has dominated the financial news over the past three days and has been called a game-changer for the food retailing industry, but could there be wider ramifications for the business supplies industry? We suggest a few things to think about…

Whole Foods locations could be used as collection points for Amazon online sales, providing customers with more delivery options.

Whole Foods stores could act as local distribution hubs for fast delivery, two hours or even less, and give Amazon a stronger last-mile delivery presence.

Amazon’s move could have a disruptive effect on the wider food retailing industry. There is already speculation about the need for accelerated consolidation in the mass and grocery sector, and if that happened that would affect vendors that sell into these retailers.

Amazon has been testing more consumer-friendly retail concepts, such as its Amazon Go initiative where customers just pick items off shelves without the need to go through a checkout. Acquiring Whole Foods will give it a wider test platform and could lead to faster adoption of some of these shopping innovations as well as speeding up digital transformation in the retail sector in general.

We have previously downplayed the idea of Amazon acquiring retail locations in the business supplies channel because there was no indication that it would make a significant move into the retail space. That has now changed, and the Whole Foods deal validates Amazon’s belief in an omnichannel experience that combines the digital and physical worlds.

Could this mean that Amazon now looks to acquire retailers in other business segments, such as office supplies, and that Staples or Office Depot’s stores could be on the Amazon radar? Possibly, especially if Amazon is not happy with the way that Amazon Business is growing; it hasn’t updated its customer and sales figures on Amazon Business in the US since April 2016. Is that because the growth rate has slowed and it’s not getting the traction it thought it would after Amazon Business’ initial success?

The Whole Foods acquisition is reportedly being driven by difficulties Amazon was having in growing its Amazon Fresh grocery delivery business. If Amazon Business is stalling or not growing fast enough, then why wouldn’t Amazon look at buying growth? We now know that this strategy is part of Amazon’s playbook.

By Andy Braithwaite for OPI.net

Bidvest group, buoyed by a war chest of $1 billion (R12,9-billion), is on the hunt for local and international acquisitions as the company seeks organic and acquisitive growth.

Chief executive Lindsay Ralphs said the company was continuously pursuing select international and local opportunities to complement its existing offerings.

“We have ample headroom to accommodate expansion opportunities. We’d be able to raise $1 billion should we need it, or about R14 billion to R15 billion, and that has been confirmed by a lot of the bankers,” Ralphs said.

The company’s expansion plans come a year after it spun off its food service division, Bidcorp, in a $5 billion listing on the JSE.

In October, Bidvest acquired Brandcorp, a distributor of industrial and consumer products.

The group said the acquisition of Brandcorp contributed R535 million to its revenue and R71 million to its operating profit for the period.

The food service unit accounted for 60 percent of Bidvest’s sales in the six months to the end of December 2015.
The group yesterday reported a 4.4 percent rise in half-year profit.

Earnings up

Headline earnings per share increased to 510.3cents for the six months to December, from 489c in the comparative period.

Revenue rose 4.1 percent to R36 billion, and the company’s trading profit increased by 3.2 percent to R2.8 billion.
Cash generated from operations shot up 30 percent to R1.8 billion.
Bidvest declared an interim dividend of 227c per share.

The company’s seven businesses had mixed results for the period.

The services unit went up 5.2 percent to R6.4 billion, accounting for 27 percent of the company’s trading profit.
The freight business’s revenue decreased by 18.6 percent to R2.4 billion, while the automotive division reported a 1.8 percent increase in revenue to R12.3 billion.

The office and print business’s revenue declined by 1.4 percent to R5 billion.
The financial services unit’s revenue surged by 32.7 percent to R2 billion, while the commercial business’s revenue increased by 24.8 percent to R3.7bn.

The company’s electrical business recorded a marginal increase of 1.9 percent to R2.7 billion.
However, profits of its Namibian business nosedived by 80 percent to R23 million, accounting for just 1 percent of the group’s total trading profit for the period.
Bidvest said this was because of a reduction in fishing quotas. The group owns 52 percent of Bidvest Namibia.

Bidvest shares dropped 1.02 percent on the JSE to close at R163.31.

By Kabelo Khumalo for www.businesslive.co.za

ACCO receives go-ahead on Esselte acquisition

ACCO Brands Corporation, one of the world’s largest designers, marketers and manufacturers of branded business, academic and consumer products, has announced that it has received clearance from the relevant competition authorities related to the pending acquisition of Esselte Group Holdings AB.

The completion of the transaction remains subject to the satisfaction or waiver of certain conditions. The company expects to complete the transaction by early February.

The company also announced that it will release fourth quarter 2016 financial results on Wednesday, February 22, 2017 before the market opens. At 8:30 a.m. Eastern Time the Company will host a conference call to discuss the results.

The call will be broadcast live via webcast. The webcast can be accessed through the Investor Relations section of www.accobrands.com. The webcast will be in listen-only mode and will be available for replay for one month following the event.

The UK high street is losing another retail name as office stationery chain Staples shops will close following a deal with a turnaround firm for “a nominal sum”.

The move comes after US parent, Staples Inc, hired KPMG to explore options for its European operations after its attempted $6bn (£4.8bn) merger with US rival Office Depot was blocked by regulators.

Hilco, known for its turnaround of HMV, is buying Staples’ UK business and is planning to phase out Staples 106 shops across the country, which employ more than 1 100 staff in total.

Paul McGowan of Hilco Capital said: “We are pleased to have concluded a transaction with Staples, Inc. and look forward to working with the UK team.”

“While retail in the UK has been challenged recently, a team led by retail veteran Alan Gaynor will work alongside the existing management team to build a plan for success for the business.”

Staples has online and business-to-business operations which could continue to trade.

“Agreeing to sell our UK retail business to Hilco aligns with our strategy of focusing on our North American and mid-market business, and is a meaningful step in that process,” said Staples chief executive Shira Goodman. She added that the company is still “evaluating strategic alternatives for the remainder of Staples Europe”.

Last month, the Telegraph reported that investment firm Cerberus, which bought billions of UK and Irish bank assets in the wake of the financial crisis, was in negotiations over a rescue deal for the Staples’ European business, which includes 200 stores, for a nominal sum.

Staples has struggled for years as revenue declines and demand wanes for traditional office basics such as folders, ink cartridges and filing cabinets, and as shoppers hunt for bargains online. However, a restructuring plan last year meant that UK sales grew by 7pc to £116m and the business returned to the black with £3.4m of profits.

Staples’ difficulty follows the collapse of high street chains BHS, Austin Reed, American Apparel, My Local and Store 21 this year.

By Ashley Armstrong for www.telegraph.co.uk

ACCO aquires Esselte in $330m deal

ACCO Brands Corporation yesterday announced that they have reached an agreement to acquire Esselte Group Holdings AB, a leading European office products company. The agreement was from private equity firm JW Childs for $333-million in cash. ACCO said it will combine Esselte with its existing European operations creating a $600 million pan-European business – almost triple the company’s current business in the region.

Like ACCO Brands, Esselte is a company whose branded products are recognised around the world for their quality, innovation and reliability, and whose people are respected as among the best in the industry.

In a letter sent out to customers, Neil McLachlan, President, ACCO Brands Europe, and Mark Wilkinson, Vice President, Sales, ACCO Brands Europe,

“Once the transaction is completed, in the coming months, we look forward to demonstrating to you our renewed dedication to customer relevance, product innovation and category management expertise across Europe.
During this period through completion, you and your success will remain our primary goal. We will remain committed to providing you with the exceptional products and service you’ve come to expect from ACCO Brands, and you should see no changes in your day-to-day interactions with us.
“We will keep you informed throughout the process and communicate any new information as it becomes available. Please feel free to reach out to either one of us, your Account Manager or our customer service team with any questions.”

The London Stationery Show and Stationery magazine have been acquired by Ocean Media Group, a UK-based provider of exhibitions, events, awards and specialist publications.

Founded by Chris Leonard-Morgan, the London Stationery Show has trebled in size since its launch in 2010 and has been the main driver of the UK’s national Stationery Week programme.

The 2017 show is on course to continue its upward trajectory with more than 85 per cent of the 2016 stand space already booked.

David Watt, CEO at Ocean Media, says: “This is an exciting opportunity to add two more market leading brands, and a new sector, to the Ocean portfolio. The London Stationery Show has captured the imagination of both mainstream and niche retailers whilst stimulating consumer demand for quality stationery products. Ocean believes it can help foster the sector and help the London Stationery Show continue to grow to meet the demands of this vibrant industry.”

Leonard-Morgan will remain in place as an advisor on the show alongside the existing team.

The 2017 London Stationery Show will take place at the Business Design Centre from 25 to 26 April and National Stationery Week from 24 to 30 April.

Source: www.stationerynews.com.au

Staples could be on the brink of winning its case against the Federal Trade Commission — possibly clearing the way for it to acquire Office Depot, sources have told The Post.

The judge overseeing the FTC suit against the office supply chain said he will entertain a motion from Staples’ legal team to dismiss the case once the regulator concludes its arguments this week.

When a judge agrees to hear such a move — a judgment as a matter of law — he or she believes the plaintiff or prosecutor has failed to make its case, a lawyer not involved in the case told The Post on Monday.

“I’ve seen such motions, but never when the plaintiff is the government,” the lawyer said.

Judge Emmet Sullivan is not fan of the tactics of Edith Ramirez’s FTC. He ordered a transcript unsealed last week in which Amazon claimed the FTC coached it to lie.

“The judge is either playing games,” in the way he is taking the FTC to task, the lawyer said, “or the FTC is really in big trouble.”

The FTC and Department of Justice have won 9 of their last 10 merger challenges making this even more surprising, the source said.

The FTC in December voted 4-to-0 to block Staples from completing its $6.3 billion acquisition of Office Depot, arguing that the combo would leave no competition and result in higher prices.

The FTC has still not called its star witness Carl Shapiro, the former Deputy Assistant Attorney General for the Antitrust Division of the US Department of Justice.

Staples at present trading levels would be paying about $10 a share for Office Depot if the merger clears, and shares will fall to near $4.50 if the block holds.

Office Depot shares rose 7,7% Monday to $7.44.

By Josh Kosman for www.nypost.com

Italy-based stationery group FILA has said growing its sales in the UK is one of the key reasons for acquiring fine art materials vendor Daler-Rowney.

FILA has paid almost €81-million ($90-million) for Daler-Rowney, the Berkshire-based firm which can trace its roots back to 1763.

Daler-Rowney – one of the largest fine art products manufacturers in the world – has annual sales of around £60-million ($85-million), while EBITDA for the 2014 financial year was about £4,5-million. Private equity firm Electra had a 41% stake in Daler-Rowney.

FILA opened a subsidiary in the UK five years ago, but has struggled to make a major impact in the market, achieving annual sales of around €4-million but lacking a strong presence in the retail sector.

During a conference call to explain the transaction, FILA said that Daler-Rowney’s distribution into the UK retail channel – with customers such as Hobbycarft – presented a good opportunity for FILA’s products. Taking Hobbycraft as an example, FILA said there was potential to grow sales tenfold.

FILA added there was also sales synergy opportunities in the US, where FILA acquired the iconic Dixon Ticonderoga brand in 2005. These include improving margins with large customers such as Walmart.

The deal is not good news for Daler-Rowney’s distribution partners. The firm distributes its products in about 70 countries, and FILA said it would integrate sales into its own network, something which is expected to take around six months.

FILA has been increasing its presence in the art and craft sector since it set up a joint venture with fellow Italian firm Maimeri in 2014. It’s a segment that it sees as digitisation-proof and said that the Daler-Rowney acquisition was another step into its diversification into this area.

FILA operates through 11 production facilities and 19 subsidiaries around the world, has annual sales of around €230-million and employs 5 000 people.

By Andy Braithwaite for OPI.net

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