The b-to-b cataloger has capital to spend but is having a tough time finding companies to buy
The $110 million Executive Greetings, which produces 20 titles, mailed 72 million books in 1999.
Acquired in September 1999 by buyout firms San Francisco-based Behrman Capital and New York-based Tandem Investments, $110 million New Hartford, CT-based Executive Greetings is on the hunt for acquisitions itself.
In fact, the business-to-business marketer of greeting cards, calendars, and diaries aims to double its sales during the next four years by acquiring two or three catalog companies a year, says Executive Greetings president Lee Bracken.
Behrman Capital, which owns 60% of Executive Greetings, and Tandem, which owns the remaining 40%, earmarked $60 million for Executive Greetings to buy other companies – and the cataloger wasted no time. In November 1999, Executive Greetings acquired Grand Prairie, TX-based SA-SO, a catalog marketer of customized safety signage.
Including SA-SO, Executive Greetings mails 20 titles, among them greeting card catalogs Brookhollow and Greenwoods Collection; Dental Ideabook, which sells dental appointment cards; U.S. Diary, which sells planners; and human resources title HRdirect, which Executive Greetings bought in October 1997. In 1999, Executive Greetings mailed about 72 million catalogs.
No easy task Despite its intention to grow by acquisition, Executive Greetings has not bought any companies since SA-SO. Bracken says the company came close to purchasing several small, family-owned businesses, but the deals fell through.
Steve Oakes, vice president for acquisitions and corporate development at Executive Greetings, says the cataloger is focusing its search for companies in the promotional products industry. Many of those businesses are a desirable size – $5 million-$20 million in annual sales – and, like many of Executive Greetings’ divisions, produce personalized merchandise.
“Targeting acquisitions in the promotional products market is an excellent strategy because that entire industry is hot right now for acquisitions,” says Mal Appelbaum, a principal at New York-based holding company Wand Partners, which includes Westerly, RI-based Paragon Holdings. The industry is highly fragmented, Appelbaum says, “And if Executive Greetings is able to make complementary acquisitions at good prices, it could add significant value to the product using its existing infrastructure, which would be accretive to earnings.”
Seeking out smaller private companies has its drawbacks, however. Unlike larger, public corporations, these companies don’t always have volumes of information available regarding customer lists, mailing plans, vendors, and the like. That can make performing due diligence and determining how much Executive Greetings should pay for a company a challenge, Bracken says.
But the cataloger is optimistic that the right acquisitions are out there. In fact, the slowing economy could help its cause: An owner trying to sell his business may be prompted to act fast – before the company loses its value. Executive Greetings will also be considering international expansion opportunities, but probably not until 2002.
Hoping to generate additional holiday sales, Seattle-based online giant Amazon.com mailed a catalog: the 24-page Holiday 2000 Gift Book. The catalog that features an array of merchandise from toys to lawn and patio products, does not make Amazon a true multichannel marketer, however, since it does not provide an 800-number or an order form.
“We’re not trying to reach new buyers with this catalog,” says spokesperson Carrie Peters. “We just want to give all of the customers we mailed a chance to see the variety of product our Website has to offer.” The catalog mailed to more than 10 million names from Amazon’s 25 million-name customer database.
Amazon mailed its first holiday gift book in 1999 to an undisclosed number of customers. Still, Peters insists the company is not aiming to join the ranks of other general merchandise direct mailers such as J.C. Penney: “We consider the gift book a catalog, but we have no intention of getting into the traditional catalog business.”
…with Gina Valentino Gina Valentino is the customer development director for Downers Grove, IL-based general merchandise cataloger Spiegel.
Where did you grow up?
Lincoln Park, MI, a suburb of Detroit.
What college did you attend?
Adrian College in Adrian, MI, for my BBA; University of Phoenix for my MBA.
What’s your favorite sport?
Hockey-but specifically the Detroit Red Wings and its star player, Steve Yzerman. In fact, my brother, Mario, is currently a minor-league hockey referee.
Other than your current job, what would your dream job be?
If I left the catalog industry I’d teach at the university level or take a position in state politics.
What catalogs do you shop from?
Spiegel, Eddie Bauer, American Stationery, Charles Keath, The Company Store, and Disney.
What’s your favorite song?
“Winter Wonderland”-the Johnny Mathis version.
Who is your favorite actor? Robert Mitchum.
What is your favorite movie? The Sound of Music.
If you could trade places with one person for a day, who would it be? Oprah.
What’s in your CD player now?
The Best of Mozart, 1756-1791.
Are you a cat person or a dog person? Dog.
What’s your secret obsession? Reading.
How do you take your coffee? Black, straight up.
How do you like your pizza?
With pepperoni, easy on the cheese, and a thin crust.
What’s your most surprising claim to fame?
In the early ’90s, my family appeared on Family Feud for three days and won the $10,000 grand prize.