Endless agrees to acquire office2office

Middle market firm Endless has agreed to acquire office2office, which provides business supplies and outsourced business services. The firm is making the investment through EVO Business Supplies Limited, a new company formed by Endless. The deal is subject to regulatory approvals.

Press Release

Endless LLP, a leading transformational investor in mid-market businesses, has reached agreement with the Board of office2office plc (o2o) to acquire the Company’s entire share capital in a recommended cash offer. The offer is being made through EVO Business Supplies Limited (“EVO”), 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, through its Managed Procurement and Business Critical Services activities. The Group employs approximately 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 on 20 August 2014 and values the company’s equity at approximately £19m. In the year ended 31 December 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, meaning that, at this stage, there is no certainty on timings or indeed of the transaction necessarily being approved. We anticipate Court and Shareholders meetings before the end of September 2014.

Endlesss already knows the business supplies market well. 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 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.

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.

Commenting on the o2o acquisition, 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.”