Tue, 21 Mar 2023 | ADMINISTRATION
Trade retailer Screwfix, a subsidiary of Kingfisher group, has acquired Connect Distribution Services out of administration. The deal, valued at £3 million, includes the purchase of stock, intellectual property, contracts, and fixed assets of the Birmingham-based company.
Connect Distribution Services specialises in selling appliance spares, accessories, and consumables to both tradespeople and consumers. Alvarez & Marsal had been appointed to manage the administration process.
Screwfix plans to continue operating Connect Distribution Services as a going concern, with the target’s more than 400 current employees being transferred to the Kingfisher group. Connect Distribution Services' online trading brands, including eSpares, BuySpares, 4OurHouse, and the Connect Trade Portal, will also remain operational.
Both companies offer digital and fulfilment platforms, serving B2B and B2C customers. Screwfix intends to ultimately integrate Click & Collect orders through its nationwide store network, with the possibility of generating synergies with other parts of the Kingfisher group.
Screwfix CEO John Mewett said: “I’m very pleased to be able to secure the future of the business of Connect Distribution Services and its brands for its customers, engineers and colleagues.”
“The business’ popular ecommerce platforms have significant growth potential and they play an important role in helping tradespeople and consumers keep products in use for longer, supporting our sustainability agenda.”
“As an entrepreneurial and customer-focused family business with a 50-year history, the culture is a great fit for Screwfix and we look forward to welcoming our new colleagues.”
Connect Distribution Services’ accounts are currently overdue at Companies House, with the firm’s most recent accounts covering the year to October 31 2020. During that period, the company reported gross profit of £30.9 million on turnover of £96.8 million, a slight improvement on 2019’s gross profit of £30.7 million on turnover of £94.07 million.
At that time, the firm’s fixed assets were valued at £17 million and current assets at £22 million. The company’s net assets amounted to £19.4 million.
Read more about conducting M&A during an economic downturn:
Finding M&A value in an economic downturn
Conducting due diligence in a downturn - Unlocking value and avoiding hidden risks
One of the best ways to find properties below market price is to look at recent administrations.
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