The proposed merger of two photographic distributors has come to a definite end after two years of discussions, a rights issue that fell short and a reversal of which firm would buy the other.
HE Perry owner Broadway Industries officially announced in late May that the merger with Lacklands would not proceed.
“If we had had the funding in place to have purchased Lacklands, I’m sure they would have signed the deal tomorrow,” says Broadway chief executive Howard Milliner.
He says the merger talks began about two years ago.
Lacklands’ director Geoff Evitt says there were a number of reasons the merger plans were halted.
“Naturally this is disappointing after the investment that was made by both companies during the process, but the decision was not reached lightly.
“[The] impacts of the economy, customers, suppliers and staff were all influencing factors in making the final decision.”
Evitt says Lacklands will continue to bring new brands to the photographic industry, and expand the lines offered by its existing vendors.
As recently as March, HE Perry, which distributes the Olympus brand, and Lacklands, whose agencies include Ricoh, Leica and Sandisk, were still aiming to seal the deal.
Milliner told Reseller News last year that the companies’ combined annual turnover would have been about $25 million.
In March, he said Broadway aimed to raise $8 million in a rights issue scheduled for completion last November, but fell short by about $3 million.
To keep the merger prospects alive, Lacklands was proposed as the buyer of HE Perry, rather than the reverse. The revised plan also gave Broadway Industries the option to buy the combined Lacklands/HE Perry business later.
Broadway is now looking at other options for growth, including “ways we can improve profitability”, says Milliner. However, he says HE Perry’s trading has significantly improved since Christmas.
Broadway is not looking at any other acquisition targets, he adds.
HE Perry was established in 1932 and Lacklands in 1949. Both firms have sites in central Auckland, although HE Perry is headquartered in Christchurch.