Portfolio further optimised with US acquisition
TAKKT buys US market leader in office furniture mail order
TAKKT AG is expanding its presence in the US office furniture market. The leading B2B mail order company for office, business and warehouse equipment in Europe and North America will be taking over the business of the National Business Furniture (NBF) group at the beginning of January 2006. TAKKT is investing 82 Million US Dollars (approx. EUR 70 million) in the acquisition. The purchase agreement was signed on 11 November 2005.
The NBF group generated a turnover of USD 114 million in 2004, making it the US market leader in the office furniture mail order segment. “Until now our position in this segment in the US was comparatively weak“, notes Georg Gayer, TAKKT’s Chairman of the Management Board. “Thanks to the NBF group we will have access to customers in the service sector, which further reduces our dependence on the manufacturing sector.”
Five successful brands
The new acquisition will be part of TAKKT's K + K America division. NBF is based in Wisconsin and operates five brands. The brand National Business Furniture generates the greatest proportion of total turnover. This core brand sells traditional US office furniture to a broad range of companies. The Alfax and Dallas Midwest brands mainly focus on non-profit organizations such as schools, universities and public authorities. OfficeFurniture.com and FurnitureOnline.com are also part of the group and only sell their products online. The NBF product range consists of more than 11,000 articles.
First-rate customer base
NBF supplies about a half a million companies and organisations, including almost all Fortune 500 companies. The majority of customers are from the service sector which is growing above average.
Instead of operating its own warehouse NBF has perfected the so-called drop shipment business. Ordered goods are sent directly from supplier to customer.
Focus on growth
In 2004 the NBF group achieved sales of USD 114 million, which represents more than 8 percent growth over the prior year. In 2005 10 percent sales growth is expected. The EBIT margin of the NBF group in 2004 was a good 4 percent. In 2005 approx. 5 percent is expected.
“The profitability of the NBF group is currently below the TAKKT average. This has been affected by the growth initiatives started in 2004 and the concentration on drop shipments”, explains Gayer.
Investing in successful markets
The US market for office furniture is worth USD 10 billion and has averaged 3 percent growth annually in the past 15 years. During the same period the NBF group has recorded organic growth of more that 5 percent annually.
The takeover yields further strategic potential: “Our new company’s business model can also be applied to other markets“, comments Tom Loos, CEO of K + K America. “This offers us new possibilities to press ahead with the internationalisation of the K + K America group.”
TAKKT can finance the acquisition with existing credit lines. “Even after the NBF acquisition TAKKT will have a sound balance sheet structure, which will leave sufficient capacity for further growth“, explains Dr Florian Funck, Member of the Management Board for Controlling and Finance.
Short profile of TAKKT AG
Represented in 25 countries, TAKKT AG is the number one B2B mail order group for office, business and warehouse equipment in Europe and North America. The product range of the TAKKT subsidiaries comprises some 100,000 items from the areas business and warehouse equipment, traditional and design-oriented office furniture and accessories, occupational safety products, equipment for retailers, the food service industry and the hotel market.
TAKKT AG employs approximately 1,900 members of staff, has more than 2.6 million customers worldwide and distributes more than 50 million catalogues and mailings each year.
The company is listed on the SDAX and was admitted to Deutsche Boerse’s Prime Standard on 1 January 2003.
Stuttgart, 14 November 2005
Contacts:
Georg Gayer, CEO
Phone +49 711 34658-201
Dr Florian Funck, CFO
Phone +49 711 34658-207