NEWS
There is certainly an opportunity for independent dealers in the new entity to increase their online presence. Another “crucial factor” is the scale the combination will bring in terms of purchasing terms. While each business will still be run separately, overall responsibility for OWG lies with MTH Retail CEO Matthias Baumann, himself a former CEO of Office World (see page 12).
Analysis: More reseller consolidation in Europe It has been a busy first couple of months of 2021 on the ‘old continent’ in terms of reseller M&A activity
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At the end of January, two leading players in the Swiss office products market – Office World Holding (OWH) and OFFIX Holding – announced the establishment of a joint venture to be known as Office World Group (OWG). OWH is the majority shareholder in the new entity, which has almost 600 employees and sales of around CHF400 million ($440 million). OWH, based in Bolligen, near Bern, operates 19 locations in Switzerland, generated revenues of around CHF170 million in 2019 and employs a total of 359 staff. It includes the Office World retail chain, B2B reseller iba and managed print business Tramondi.
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STRONGER TOGETHER OWH is part of the Austrian MTH Retail Group, which achieved consolidated group sales of around €730 million ($870 million) in 2019. MTH acquired Office World/iba from Swiss group Migros in 2017. OFFIX, meanwhile, has been an umbrella organisation of Aarburg-based cooperative PEG since 2015 following its phased acquisition of technology distributor Ecomedia. The company is one of the leading stationery and office products players in Switzerland, with sales of around CHF240 million and 235 employees. It includes the Papedis and Ecomedia wholesaling businesses, retail services firm Oridis, B2B reseller Office Leader and managed print company DocuServ. The rationale behind the transaction lies in the challenges facing the business supplies sector, including the effects of digitisation on filing and archiving product needs, the hybrid workplace trend and the rapid shift towards online sales channels.
DISRUPTION CONTINUES Elsewhere, the dismantling of the European Office Depot and Staples networks continues. In early February, Office Depot France (OD France) filed for voluntary administration after its owner – private equity firm Aurelius – chose not to provide funds (estimated at around €10 million) or provide guarantees that would have helped the reseller obtain a €30 million government loan. Faced with an impending cash crisis, OD France CEO Guillaume de Feydeau and his advisors chose to file for administration. This created the breathing room to be able to come up with a viable, long-term solution for the company. Aurelius confirmed this would happen via a sale of assets and interested parties had until 19 March (shortly after this issue of OPI went to press) to submit bids. OD France operates a multichannel model, with 60 stores plus contract and direct units, and employs some 1,750 people. Its sales in 2020 were around €280 million, down by about 20% versus 2019, with the contract arm, in particular, hit by COVID-related lockdowns.
The dismantling of the European Office Depot and Staples networks continues The question now is whether anyone will come in for the company as a whole, or if it will be acquired in parts. That should be known fairly rapidly, with the court-appointed administrators expected to announce their preferred option(s) in the weeks following the 19 March deadline. Over at Office Depot’s European rival Staples Solutions, its Global Accounts Team (GAT) was sold to multichannel operator PBS Holding, effective 19 February. GAT comprises around 24 staff members under the leadership of Ian Kirton and was based at the company’s shared services centre in Gdansk, Poland. The entire group has now transferred to PBS, along with several key local account managers. Staples Solutions said the transaction formed part of its localisation strategy, with GAT actually being the last centralised business at the company. As regards PBS, it now has 85 contracts with large enterprise customers and a foothold in a European contract channel where it sees plenty of market opportunities. M&A activity in Europe is unlikely to stop there, with expectations of further transactions in countries such as the UK and Italy, for example.
