Connect Books’ parent company has sold off one of its businesses for a value of £64.4m.
Connect Group PLC has announced an agreement to dispose of its Education and Care division to RM plc, for a cash consideration of £56.5m on a cash free, debt free basis. It has also agreed to sell off the division’s defined benefit pension schemes which has a value of around £7.9m. This creates an enterprise value of £64.4m overall.
Connect's Education and Care division supplies equipment, products for care homes, specialist vehicles for Fire and Rescue organisations, and stationary and sports kit for organisations across the UK.
The group has said that proceeds from the disposal will reduce the group’s borrowings, offering more flexibility to pursue growth in specialist distribution.
Connect’s book business includes wholesaler Bertrams, online retailer Wordery and academic library supplier Dawson Books. Connect Group also owns news and media businesses.
Mark Cashmore, the group’s c.e.o., said: "The disposal will provide the group with greater financial flexibility as we continue to drive our operational priorities and growth strategy. Looking ahead, the group remains focused on delivering long-term value for shareholders, deploying our capital to deliver a balance of strong dividend, deleverage and re-investment for further growth."
Last month Connect Books revealed a strong Christmas trading period, with like-for-like sales up 15.1% across its wholesale business and online platform Wordery.
In September 2015, Connect Books bought the remaining 49% stake in Wordery from Jones and other founding partners Steve Potter, Rob Johnson, Lee Valentine and Tim Williams for an initial consideration of £5.1m and a possible further £3.3m.
The Connect Group will announce its interim results for the six months ending 28 February 2017 on 25 April 2017.