Turnaround firm Aurelius inks £11.6m deal for loss-making retailer Connect Books

by

The divisions range from specialist book procurement to wholesale distribution (Source: Getty)

Aurelius, the private equity firm which focuses on turning around struggling businesses and complex carve-outs, has taken loss-making Connect Books off the hands of London-listed Connect Group for up to £11.6m.

Connect Group, which started life as the news division of WH Smith before demerging, is selling its book arm as it focuses on its specialist early morning and mixed freight logistics business. It will be left with Smiths News, Tuffnells Parcels Express and Pass My Parcel.

Aurelius will take on business-to-business wholesaler Bertram Books, online bookshop Wordery, print and digital content supplier Dawson Books, academic and specialist content sourcers Erasmus and Houtschild and library supplier Bertram Library Services. 

Read more:  Private equity firm Aurelius nearly quintuples earnings as it brushes off accusations from hedge fund Gotham

“Since the decision by Connect Group to focus on becoming a specialist logistics business, we have been exploring various ownership options," said Justin Adams, managing director of Connect Books.

"In Aurelius I believe we have found an owner that has the financial and operational capabilities to help us on our journey to build the best one-stop shop for content and support us in the ongoing shift towards becoming a more customer-centric, agile solutions provider for our customers and suppliers." 

Adams added that in the immediate future, it will be "business as usual" for the divisions.

Read more:  UK M&A deals tail off as post-Brexit vote reality causes sentiment to weaken

Aurelius, whose previous investments have included shoe business Scholl and Office Depot, plans to detach the business from Connect Group, "ensuring minimal distraction" before it begins to grow internationally. Connect Books, which will now be rebranded Bertram Group, also wants to boost its service offering, capabilities and e-commerce platform.

The business has projected revenues of €250m (£222m) for 2017, but in the 12 months to August it reported a loss on earnings before interest and tax of £2m.

Aurelius will pay £10.6m on completion of the deal, and up to £1.05m subject to the recovery of various debt receivables and tax refunds.

Read more:  DX delivers new deal to shareholders by snapping up John Menzies distribution unit