There had been uncertainty over the future of business products wholesaler Exertis Supplies – and the wider Exertis distribution group – ever since parent company DCC announced last November it intended to focus on the energy sector.
In April this year, the DCC Healthcare division was offloaded to private equity firm Investindustrial for around £1 billion. At the same time, DCC said it was “making good progress” in its strategic review of Exertis – although it appeared a number of “value maximisation” initiatives would have to be completed before a divestment could be achieved.
As such, an immediate sale of Exertis was not necessarily expected. However, in mid-July, a definitive agreement was announced between DCC and European private equity firm Aurelius for the Exertis Info Tech (IT) operations in the UK and Ireland – including Exertis Supplies. The £100 million transaction is still subject to regulatory approvals and is expected to close in the final quarter of this year.
Until then, Exertis Supplies Managing Director Matt Balcombe is unable to provide specifics on the wholesaler’s plans and strategy, but noted: “This is an exciting next phase for Exertis Supplies, keeping us and our workplace supplies partners thriving with the backing of Aurelius. For our partners across the UK and Ireland and for our team in Elland, I’m looking forward to all that follows.”
Positive reaction
One of Exertis Supplies’ strategic partners is dealer group Advantia. Having spoken to various dealers and vendors, its Managing Director Steve Carter said the acquisition is seen in a “very positive light”.
He explained: “As we know, there has been significant investment in Exertis Supplies over recent years, the move to a new warehouse and the commencement of an operation in Ireland being excellent examples of this. With new investment from Aurelius, there is every reason to believe Exertis Supplies will continue to have an extremely bright future and continue on its upward trajectory.”
Carter also underscored the “paramount importance” of having competition in the wholesale channel: “Dealers need to feel confident the agreement in place with their chosen wholesale partner, both from a pricing and service offering, allows them to be competitive in the marketplace.
“The only way in which this can happen is for there to be healthy competition between the wholesalers.”
Some Workplace360 readers will no doubt recall that Aurelius is the former owner of Office Depot Europe (ODE). After acquiring ODE from its American owner at the start of 2017, the private equity firm oversaw transformation efforts before carving out various units over a two-year spell – culminating in RAJA’s acquisition of Viking in 2021.
Another example is electronics components distributor Distrilec. Aurelius acquired the European wholesaler in 2020 and sold it three years later for £320 million – approximately 11 times the purchase price – to RS Group.
Speaking in relation to Exertis IT, Aurelius Managing Director Andrzej Cebrat said it “ticks all of [our] boxes”, adding: “With £2 billion in annual revenues, it is an attractive size and offers significant operational improvement potential.”
