Endless agrees office2office deal
YORKSHIRE-based turnaround investor Endless has agreed to acquire office2office (o2o), the listed business supplies provider, which it intends to merge with its Sheffield-based portfolio company Vasanta.
The Leeds-based private equity house will acquire the company’s entire share capital in a recommended cash offer through EVO Business Supplies, a new company owned by funds managed by Endless.
o2o, listed on the Main Market of the London Stock Exchange, is a major provider of business supplies and outsourced business solutions, primarily to large private and public sector customers.
The group employs around 900 staff and is headquartered in Norwich.
The offer of 51p a share represents a premium of 84.6% to o2o’s closing price of 27.625p yesterday and values the company’s equity at around £19m.
In the year to December 31, 2013, o2o’s revenues were £231.9m, with underlying profit before tax of £4.2m.
The o2o acquisition is subject to shareholder and court approval.
Endless is not unfamiliar with the business supplies market. Its majority-owned portfolio company Vasanta offers wholesaling and contract stationery through a distribution network based around three highly automated warehouses with its headquarters based in Sheffield.
Vasanta’s revenues in the year to December 2013 were £415m.
Endless says it has identified a strategic opportunity to combine Vasanta and o2o, with EVO as the new holding company of both businesses.
“The enlarged group will be better positioned to provide dealer customers with an alternative ‘stockless’ supply model, through combining o2o’s Truline service with Vasanta’s warehouse capability,” it says.
“In addition, the new company will be better able to support customers and provide the continued investment in operations needed to maintain a strong wholesaler and contract stationer supply channel.”
Mathew Deering, investment director of Endless and EVO director, said: “We believe that o2o is a business with a number of attractive characteristics which will benefit from the operational expertise and financial support of Endlesss.
“Furthermore, the merger with Vasanta makes strong strategic and operational sense. It provides an exciting opportunity for the combined group to deliver a strong offering to the market going forward.”
Deloitte provided M&A lead advisory, tax, pension and competition advice.
