Lyreco tightens European grip with Ahrend deal

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Lyreco CEO Eric Bigeard talks exclusively to OPI+ about his move to purchase Ahrend Office Products, how the deal will affect his long-term plans, and the ripples that will be felt in the European OP industry…

With its acquisition of Ahrend Office Products (AOP) for an undisclosed sum, Lyreco will be able to significantly boost its performance in Germany and the Netherlands and increase its hold on Europe. The deal, which is expected to close in this year’s Q4, will also allow Ahrend to fully focus on the expansion of its office furniture division in the Netherlands as well as abroad.

 

"For us, Ahrend was the right company to acquire at the right time," Eric Bigeard told OPI+. "From being a small player in the Netherlands and a medium player in Germany, Ahrend – with its respected name and strong presence – gives us leading positions in both markets…and a leading position in all of Europe’s key economic markets. This is the best company we could acquire in Europe at this stage.

 

"As for Ahrend, we have given it an international side which it had been missing," added Bigeard. "It has tried through the European Office Supplies Alliance [EOSA] to grow its presence in Europe. But it has been caught in the middle of the integration process, too small to grow today, but too big to stay in a niche market."

 

Lyreco, headquartered in Marly, France, reported revenue of €1.6 billion ($1.9 billion) in 2004. AOP, based in Amsterdam with activities in the Netherlands, Belgium, Luxembourg, Germany, France and Austria, has an annual turnover of more than €200 million. AOP’s chief Oswald van Even, who will stay on as head of the division, declined to comment on the deal.  

 

As a result of the terms of the purchase, Lyreco has an agreement to use the Ahrend brand for three years, but Bigeard says it will eventually be phased out to avoid conflict with Ahrend’s furniture business, which will also continue to use the name. Being part of AOP, Lyreco also gains Ahrend’s €13 million reprography and document management business. This arm incorporates 13 stores in the Netherlands that offer digital printing, digital storage and printing on demand to a number of mostly large companies.

 

Bigeard wants to keep on "as many people as possible" from AOP to retain crucial knowledge. "It is not by chance that it’s a good company," he says. He adds that there are no plans to move locations at this point, and emphasises that, initially, Ahrend customers will see no change but that, over time, there will be changes in both companies.

 

One organisation that faces big changes as a result of Lyreco’s acquisition is EOSA, which AOP founded along with Tybring-Gjedde and office2office, and which now has a commercial partnership with OfficeMax. "Although things won’t change in the short-term, with the deal not yet complete, Ahrend will not be able to stay in EOSA as we are going to compete directly with the alliance," said Bigeard. "EOSA will have to find a new representative in Germany and the Netherlands, and OfficeMax [which partners with Ahrend] will have to find a new partner in Europe through EOSA."

 

From here on, Bigeard says the untapped parts of Europe are his company’s priority, although he claims that acquisition is not central to his strategy. "We haven’t made that many acquisitions in the past like our ‘dear friends’ Corporate Express and Office Depot," he said, "but we have made selective acquisitions such as our purchase of Switzerland-based Buro-Furrer in April. Although we keep an eye on targets, acquisition is not our primary focus.

 

"Our key strategy is to grow organically from our current bases," he added. "In Germany, for example, we have successfully started from scratch in many parts of the country such as Berlin. We also grew from scratch in Spain, Italy, Poland and Asia and are very happy with how far we’ve come. We are now present in 23 countries and we will keep expanding." He outlines Finland, central Europe, Portugal, Greece and Austria as Lyreco’s main focuses going forward.
 
But of course, the initial priority is to successfully integrate Ahrend, claims Bigeard. "There is lots of pain before signing a contract, but the really hard work comes in the days and months after. It is difficult to make a success of an acquisition. Depot, for example, may admit that Guilbert has not been a successful acquisition."