Patience is a virtue that has paid off for Takkt, the Stuttgart, Germany-based multititle merchant whose U.S. properties include industrial supplier K+K America. Seven years after it first approached National Business Furniture about acquiring the office furniture mailers, Takkt is finally closing the deal.
Milwaukee-based National Business Furniture last month agreed to be acquired by Takkt for $82 million. Assuming that the deal clears the Hart-Scott-Rodino requirements, Takkt will take control of the $118 million catalog business in January. Kent Anderson, currently chief operating officer, will become president.
In addition to the eponymous catalog, National Business Furniture owns the Dallas Midwest and Alfax titles, which sell furniture primarily to schools, churches, and the federal government; OfficeFurniture.com; and FurnitureOnline, a Website selling furniture to consumers.
K+K America, also based in Milwaukee, includes catalog titles C&H Distributors, which sells material handling and warehouse storage merchandise; occupational safety supplier Conney Safety Products; and food services source-book Hubert. Takkt’s Kaiser + Kraft Europa division includes office, business and warehouse equipment catalog Kaiser + Kraft; Gaerner, an office products title serving customers in Germany, Austria, and Switzerland; and office products title Gerdman’s. Takkt’s third division, Topdeq, sells contemporary office furniture and decor in Europe and the U.S.
“Until now our position in this segment in North America was comparatively weak,” Georg Gayer, chairman of the Takkt management board, said in a statement. “The majority of [National Business Furniture’s] customers stem from the service sector, which is showing above-average growth. In the future Takkt will be less dependent on the manufacturing sector.”
New York-based investment bank Gruppo, Levey & Co. represented the sellers, founders George and Julie Mosher, who put the 30-year-old company up for sale in June.
K+K America first approached the Moshers around the same time it purchased Conney Safety, in fall 1998. George Mosher, who was on Conney’s board of directors, declined to sell, so instead K+K America created a C&H spin-off title selling office furniture.
Mosher has no qualms about selling to Takkt now. “This is the right deal at the right time for our company,” says Mosher, who says he’ll now be able to work on projects and his other investments.
Industry observers approve of the deal. “National Business Furniture gives Takkt expanded product range for its existing customer base,” says David Solomon, managing director/partner for New York-based investment bank Goldsmith-Agio-Helms. “However, there will be a large number of new customers, some of whom will be cross-sell opportunities for Takkt’s safety and other products.”
And Takkt acquired it for what Solomon says is a fair price. National Business Furniture’s margin of earnings before interest and taxes was 4% in 2004, and the company expects it to be 5% this year. It also anticipates a 10% rise in annual sales this year.
“Though the valuation multiple was unusually high,” Solomon says, “Takkt will achieve substantial synergies, saving several million dollars in annual operating costs such as freight rates, warehousing, and other economies of scale.”
A deal of its own
While National Business Furniture was seeking a seller, it also did some buying of its own. According to Mosher, the company quietly purchased the assets of former catalog business Reliable Home Office for “five figures” in September. Mosher says a key to the deal was Reliable’s e-mail list, which will help market National Business Furniture’s two Websites.
Brisbane, CA-based cataloger/retailer Flax Art & Design put Reliable up for sale in January 2005. Flax had acquired Reliable out of bankruptcy in September 2002, as part of its purchase of leather goods mailer T. Shipley. Reliable sold office furnishings to the small office/home office (SOHO) market. It had a house file of more than 330,000 names; the average order value was more than $180.