Two major photographic distributors are still aiming to merge, but now Broadway Industries is proposing Lacklands becomes the buyer of HE Perry instead of the other way round.
Broadway, owner of Olympus distributor HE Perry, failed in a bid to buy Lacklands after it was unable to generate sufficient funds from a rights issue.
According to Broadway chief executive Howard Milliner, the new proposal includes an option for Broadway to buy the merged firms in the future, should the Lacklands’ buyout proceed.
Lacklands’ director Geoff Evitt says it aims to complete the HE Perry acquisition.
Broadway Industries wanted to raise $8 million in the rights issue, scheduled for completion last November, but fell short by about $3 million, says Milliner. He adds its major shareholders supported the issue, but smaller companies did not.
He’s disappointed the buyout deal wasn’t sealed, citing the tough economic climate as part of the reason insufficient funds were raised.
“I would have loved to have had the business [Lacklands] in our ownership and merged with them [with HE Perry] by now. But we’re going the next best course.
“Our ideal scenario is we sell Perrys to Lacklands with the right to buy both businesses later. We’re hoping to be in a position to complete that transaction [buying the merged businesses].”
Both HE Perry and Lacklands have lengthy histories, with the former established in 1932 and the latter in 1949.
Although HE Perry has its headquarters in Christchurch, it and Lacklands have premises in the Auckland suburb of Mount Eden.
Milliner says each firm turns over between $12 million and $13 million a year, and says there are “a whole lot of synergies and savings” that could be achieved with a merger.
These include operating from one or two sites instead of three, and saving on distribution costs.
Evitt agrees savings could be achieved if the merger proceeds.