Smiths News buys Dawson Holdings to increase presence in books market
NEWSPAPER and magazine distributor Smiths News yesterday announced it will buy leading academic book supplier Dawson Holdings for £20m in a cash deal to expand its book business.
The deal comes two years after Smiths News entered into the books business through the acquisition of Bertrams, and it now aims to expand the scope of its activities with access to Dawson’s academic libraries and e-book platform.
The academic market is now worth £70m per year with Dawson leading the market share with 33 per cent. Smiths News currently gets 7.5 per cent of its revenue from the books business.
The deal is expected to add £4.5m to Smiths’ earnings before tax, depreciation and amortisation in its first financial year.
Chief executive Mark Cashmore said the acquisition represents “an excellent opportunity” to strengthen one of their core businesses with the transaction creating immediate value for their shareholders whilst continuing to focus on long term strategy to diversify revenues and profits.
The deal is expected to be completed by early September and the company hope that the scale of its combined entity will help with cost savings of £3.8m by the end of financial year 2014.
Smiths News, which bought 20 Dawson News depots from Dawson Holdings in 2009, said it would pay 17.72p for each share.