VC Moulton refuses to stay stationary, gets into stationery

Jon Moulton's private equity vehicle Better Capital is getting into the wholesaling of pencils, paper and print consumables by acquiring the UK and Irish operations of stationery and office products distributor Spicers.

The colourful entrepreneur re-entered the UK IT channel in September by pulling troubled networking integrator Calyx out of administration and has since made two bolt on acquisitions to the firm's software biz.

The VC fund Better Capital – which also counts Reader's Digest in its investment portfolio – has now spread its tendrils, buying its way into the cutthroat high volume, commodity stationery and office products space.

In a statement, Better Capital confirmed it was buying the business – a subsidiary of DS Smith Plc – from Unipapel SA for an undisclosed price

"The fund has committed £40m to a wholly owned special purpose vehicle set up to effect the transaction," it stated.

The distributor also operates in continental Europe – Germany, Spain and Italy – but its UK business was hit hardest by the recession and the ultra competitive environment as sales declined 1.7 per cent in fiscal 2010 to £343m.

At group level, sales were up marginally to £492m and operating profits grew 77 per cent to £5.2m.

In the filing, Spicers commented: "This modest decline masks a more significant decline in traditional office products... [the demand] is principally influenced by the level of economic activity".

The distributor improved UK operating profits in the year by putting in place a cost-cutting drive and expected this to continue but the parent has obviously decided to get of the game, in the UK at least.

Moulton was unavailable to comment further at the time of going to press. ®