More than four months after Multichannel Merchant reported that AmeriMark Direct had agreed to buy fellow multititle cataloger Dr. Leonard’s Healthcare Corp., the deal finally went through Dec. 17. No terms were disclosed.
Indeed, says Gary Giesler, president/CEO of the new parent company AmeriMark Holdings, “We started working on it in June.” But the deal was put on hold when “the credit market fell apart,” he says.
The $220 million-plus Dr. Leonard’s Healthcare Corp. mails 90 million Dr. Leonard’s catalogs of home healthcare products for seniors. The company distributes about 101 million copies of its Carol Wright Gifts book annually.
AmeriMark’s titles include Anthony Richards, Beauty Boutique, Complements by Anthony Richards, Essentials by Anthony Richards, Healthy Living, Time for Me, The Feel Good Store, and Windsor Collection. The catalogs sell women’s apparel, shoes, cosmetics, fragrances, jewelry, accessories, and health-related merchandise.
The two catalog businesses currently generate combined sales in excess of $425 million. The combined company will have more than 6 million active customers age 55 or older, one of the largest databases in this market segment.
San Francisco-based private equity firm JH Partners, which owns AmeriMark Direct, led the acquisition and provided the equity financing. JH Partners also owns kitchenware mailer Chef’s Catalog, cosmetics merchant Bare Escentuals, and furniture cataloger Design Within Reach. Investment bank Goldsmith Agio Helms/Lazard Middle Market represented Dr. Leonard’s in the transaction.
AmeriMark’s operations in Cleveland and Dr. Leonard’s facilities in Edison, NJ, and Lincoln, NE, will not be relocated. Louis Giesler will become president of AmeriMark Direct; Tom McIntyre will remain president of Dr. Leonard’s.
Gary Giesler is confident the merger will reap benefits for both sides. “Of any two catalog companies joining forces together in the country, these two companies make more sense than any I can think of,” he says. “We are both seeing the same demographics in the marketplace.”
Dr. Leonard’s has state-of-the-art back-end, operations and fulfillment, and AmeriMark has state-of-the-art front end, “which includes circulation planning and the merchandising process,” he says, “Dr. Leonard’s has an overseas merchandising program, which will assist both of us in the merchandising area from a cost of goods point of view.”
Pat Collins, a principal with JH Partners, agrees with Gary Giesler. “We’re huge believers in what this team can accomplish,” he says. “We think the synergies are very real. Gary is not only the CEO, but also our partner in the deal. AmeriMark has the same customer base and Dr. Leonard’s brings scale and back-end efficiency. “
When rumors of the deal surfaced during the summer, some published reports said it included $315 million in debt. Although he would not provide specifics, Collins said that figure was incorrect and that current number is “significantly different.”
Stuart Rose, managing director for Wellesley, MA-based investment bank Tully & Holland, notes that “Gary Giesler is a smart and effective businessman and direct marketer. Dr. Leonard’s customer profile aligns very well with the AmeriMark customer profile.”
The synergies will most likely come from sharing lists and circulation models, Rose adds. “This is a terrific fit. JH Partners, AmeriMark’s 75% owner, and Gary Giesler will knock this one out of the park.”