Smith News has announced the unconditional acquisition of Hedgelane, the parent company of schools supplier The Consortium, for a consideration of £38 million.
The news came days after The Consortium announced its own acquisition of West Mercia Supplies (WMS) from its local authority owners.
Smith News, a wholesaler of newspapers, magazines and books, acquired Hedgelane as part of its “diversification strategy”. This is intended to grow its profits from outside its core markets as print circulations fall.
The deal comprises £32 million of initial cash to be financed through existing debt facilities, as well as up to £2 million of deferred cash and up to £4 million shares deferred until January 2014.
The group said in October that it aimed to generate at least 30% of its profit from outside newspapers and magazines by 2014. Its latest acquisition will take this to 26% this year.
Smith News acquired the remainder of Dawson Holdings, a supplier of academic books, last year for £20 million. It’s also said it would like to branch out into other markets such as food and healthcare.
Last week, The Consortium acquired West Mercia Supplies for an undisclosed amount. The Consortium will operate WMS as an independent business, under the leadership of Elaine Keogh, its former deputy managing director.
The Consortium supplies consumable products predominantly to the education sector, as well as to the care and early years nursery markets.
WMS, previously owned by a consortium of Midlands local authorities, provides office and educational products.
Smiths News has an approximate 55% share of the newspaper and magazine wholesaling market in the UK.