Bunzl agrees $160m deal to buy not-for-resale US competitor

 
Oliver Gill
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DDS, like Bunzl, is a distributor of not-for-resale items to retailers (Source: Bunzl)

Support services giant Bunzl has snapped up a US competitor labelled a "mini-Bunzl" in a deal understood to be worth around $160m (£129m).

Diversified Distribution Systems (DDS), a distributor of not-for-resale items to retailers and other general distribution customers, primarily in North America, is a large purchase for the acquisitive Bunzl, which splashed out £184m during 2016.

Analysts at JP Morgan valued the deal at around $160m and said DDS was similar to the Schwarz, a Chicago based firm bought by Bunzl in 2012.

Shares in Bunzl rose over three per cent in trading following the news.

Read more: Bunzl bats on with buying bonanza

"The proposed purchase of DDS will expand and extend our outsourcing business globally, particularly in relation to the retail sector," said Bunzl chief executive Frank van Zanten.

DDS sources items that retailers would generally not sell – such as stands for displaying items or paper rolls for printing receipts – and although this is only one element of where Bunzl has crossover it is seen as a similar business, prompting labels of it being a "mini-Bunzl".

Read more: Bunzl can't wait until Black Friday to spend, spend, spend

"The transaction will improve our operating platform and, by combining our resources with those of DDS, we will be able to provide benefits to customers through an enhanced service offering," said van Zanten.

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