Collins rescues Angus & Robertson

It is unclear how many outlets Collins will buy or how much it will pay, but the company says the acquisition will take its network to more than 70 stores, up from 52 at present. Collins claims annual revenues of almost $50 million having come through its own round of restructuring in 2005, so perhaps A&R’s problems are not insurmountable.

“We are cognizant of the difficulties Angus & Robertson franchisees have experienced in recent months through no fault of their own and the need for these franchisees to focus on what they do best which is operating successful retail bookshops,” Duncan Johnston, chairman of Collins Booksellers, publicly said of the deal. “They will be able to do this with all the support and benefits provided by Collins Booksellers.”

Less than two years ago, Private Equity Partners-backed REDGroup was on a high. It was looking to expand in Australia and New Zealand and executives were floating the idea of an IPO, which was fitting given the company’s leading stance in its niche. Revenues reached A$685 million ($731 million) in 2009, up 52% year-on-year. This was partly attributable to the June 2008 acquisition of Borders business in Australia.

However, shifting consumption patterns in the aftermath of the global economic downturn, as well as competition from online sources such as Amazon.com, saw the company rapidly fall from grace. Earlier this year it was handed over to administrator Ferrier Hodgson due to its inability to repay $158 million in debt.

With a portion of A&R now saved, the future of REDGroup’s remaining assets – Borders, Calendar Club, Supanews and Whitecoulls – doesn’t look good. Only the online businesses of A&R and Borders are believed to have attracted any interest, with publishing house Pearson Australia the likely buyer.

Global booksellers are experiencing similar hardships. Just this week, Borders Group, which claims to be the second-largest bookstore chain in the US, canceled its impending bankruptcy auction to instead permanently close its 400 stores. Borders also sought help from trade and private equity buyers, but negotiations with private equity firm Najafi Companies came to nothing.

America’s leading bookseller, Barnes & Nobel, thought to be worth $900 million, was put up for sale a year ago, attracting interest from the likes of Apollo, Bain Capital and TPG. But the private equity firms have since slowly backed out of negotiations, reportedly nonplussed by continuingly sluggish book sales. 

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• Topics
• Australasia
• Exits
• Buyouts
• Credit/Special Situations
• Bain Capital Asia
• TPG Capital
• Apollo Global Management