OT Group has made what it describes as a “strategic investment” in dealer services group Nectere.
In a letter to stakeholders, Nectere – which recently underwent a change of ownership as well as signing a five-year agreement with OT Group’s Spicers – said the “significant cash injection and the successful securing of funds” would fuel its future development and growth.
In the letter, Nectere hinted at financial difficulties, saying the past few months “have without doubt been impacted by market conditions and credit squeeze and confidence in our company”.
“The injection of funds will be utilised to drive strategic initiatives across various areas of our organisation, including sustainability, technology infrastructure, talent acquisition and market expansion,” wrote Nectere.
It added: “With these resources, we aim to stabilise our supplier commitments and accelerate the pace of our planned development, continue to focus on cutting-edge solutions, and solidify our position as leading service bureau providers.”
In its press release announcing the transaction (see below), OT Group talked up the benefits of the “partnership” with Nectere, but provided no background as to why it had made the investment at this particular time nor what the level of this investment is.
Below is OT Group’s press release in full:
OT Group, a leading workplace solutions and business services provider, has announced a strategic investment in Nectere Ltd, a unique service bureau to independent dealers. The deal marks a significant milestone for both companies, opening new avenues for growth, product diversification, and digital advancement.
The partnership between OT Group and Nectere will unlock a host of benefits for Nectere and its partners. The deal enables Nectere to leverage OT Group’s enhanced buying power and ensures continuity and development of the well-established 5 Star brand of products for its partners. Nectere will also gain access to a broader range of solutions offered by OT Group, enabling its partners to accelerate their business growth.
The inclusion of Nectere into the OT Group will deliver numerous advantages. Nectere will have the opportunity to tap into OT Group’s extensive pool of digital knowledge and expertise, bolstering its digital roadmap and unlocking innovative opportunities to enhance customer experiences, streamline operations, and drive sustained growth in the digital age.
“OT Group’s investment in Nectere represents a great opportunity for both organisations,” stated Andrew Jones, CEO of OT Group. “By combining our strengths, we will offer an unparalleled product selection, cutting-edge digital solutions, and unwavering support for our partners’ success.”
Mike O’Reilly, Managing Director of Nectere, expressed his enthusiasm about the deal, stating: “We are excited to tap into OT Group’s expertise and resources, which will enable us to provide even more comprehensive solutions to our valued partners. Together, we will create a stronger foundation for mutual success.”
This investment reaffirms OT Group’s commitment to its strategic growth initiatives, which include expanding market presence, driving digital transformation, and ensuring long-term financial stability. By integrating the strengths of both organisations, OT Group and Nectere are poised to deliver unparalleled value, innovation, and customer-centric solutions.
From the outside, it certainly looks as if OT Group’s hand was forced into injecting capital into Nectere – possibly not dissimilar to the situation that resulted in its main direct competitor EVO acquiring dealer Complete at the start of 2023.
OT Group and parent company Paragon must have crunched the numbers and decided there was value in taking on Nectere, although we don’t know yet the amount of the investment involved nor what its stake in Nectere is. Given the reference in the PR to the “inclusion of Nectere into the OT Group”, we can probably assume it has significant control.