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