Trowbridge-based education material distributor The Consortium was today taken over by newspapers, magazines and books wholesaler Smiths News in a £38m deal.
The Consortium employs 240 people, mainly in Trowbridge where it operates a large warehouse. The firm was originally launched by a group of local authorities, including the then-Wiltshire County Council, who decided to buy as a consortium to reduce purchasing costs for school supplies.
Swindon-based Smiths acquired it from its four management shareholders Melanie Teal, Mark Barnett, Mike Gahan and Joe Caddell, who will remain with the business.
Chief executive Melanie Teal has worked at The Consortium for more than 20 years in a wide variety of roles
Chief operating officer Mark Barnett has been there 16 years, finance director Mike Gahan for six and business support director Joe Caddell for seven.
Head of marketing and merchandising John Kershaw and sales director Matthew Palmer will also stay with the business.
The Consortium has won several awards including education supplier of the year for three years running and has been listed in the Sunday Times Profit Track 100.
It recently acquired, West Mercia Supplies (WMS) based in Shrewsbury, with 95 employees.
The combined gross assets last year of The Consortium and WMS were £26.8m and its pre tax profits were £6.3m.
The acquisition is expected to boost Smiths’ earnings immediately with an additional £64m in sales and £7m in earnings added to the group’s 2012 results
Smiths said acquiring The Consortium was an important strategic initiative and consistent with its stated ambition of growing profits outside its core magazine and newspaper markets while becoming a leading specialist distributor.
“The Consortium is a strong strategic fit for Smiths News, capitalising on the group’s core skill set and delivering earnings growth for shareholders,” it said in a statement.
The Consortium supplies everything from pens and pencils to major classroom and sports equipment predominantly to the £1bn education market and also to the care and early years nursery markets, which are estimated to be worth £160m and £55m respectively.
“All are large, fragmented and in structural growth, offering significant opportunities for The Consortium to expand,” said Smiths.
Its chief executive Mark Cashmore said:
“The acquisition of The Consortium is an important step in our diversification strategy, consolidating our position as a leading distributor in specialist markets. With the support of the group, The Consortium operates in markets in structural growth and can capitalise on the significant growth opportunities in the education, care and adjacent markets.”
