M and A watch: three deals in one week

The week of 23rd March was a busy one for mergers and
acquisitions in the direct selling sector, with three deals
announced in as many days. The first acquisition, announced 24th
March, saw telecoms distributor Nimans buy rival firm Rocom for
£12.45 million. Both companies sell online; Rocom also
produces a print catalogue. The combined business is estimated to
have a turnover approaching £100 million and 350 staff.

The following day, Paris-based Manutan Group, a distributor of
industrial and office equipment, acquired another French company,
cataloguer Camif Collectivites. Camif sells office and
educational supplies, sporting goods, and furniture to the public
sector, educational establishments, and not-for-profit
organisations. Camif had turnover of €142 million
(£126.3 million) for the year ended 31st December. Manutan’s
UK brands include Rapid Racking and Key.

In the consumer sector, Natural Collection and Ethical
Superstore, both of which sell eco-friendly goods, merged on 26th
March. Both companies will retain their individual brands; they
project a combined annual turnover of £8 million.

This recent flurry of M&A activity is likely a harbinger of more
deals to come, as businesses continue to grapple with rising
costs and shrinking margins. “If the price is right and you
can make effective use of the merchandise and the customer list,
then it makes sense” to acquire a compatible business, says
Andrew Wilson of The Catalogue Consultancy. Shared fulfilment
facilities, an expanded skill base, and product synergies can
produce economies of scale to improve the bottom line.

But, Wilson adds, M&A is a cynical trend. He predicts that 2009
will see fewer businesses purchased as a going concern and more
being bought from administration as companies wait for
acquisition targets to go bust rather than paying top dollar.

Published: 5th May 2009


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