Broadway Industries, owner of photographic products distributor HE Perry, looks set to create a “substantial player” in the photographic products distribution business by buying and amalgamating similar firm Lacklands.
Lacklands’ major agencies include Ricoh, Leica and Sandisk, while HE Perry distributes Olympus cameras, as well as other photographic products. Broadway chief executive Howard Milliner says the two photographic distribution firms’ combined annual turnover would be about $25 million.
The objective of the planned buyout is to add agencies to HE Perry and spread financial risk, rather than to achieve cost savings, Milliner says.
“We have always felt [HE Perry] were too reliant on one agency [Olympus]. HE Perry hasn’t been particularly successful at adding agencies whereas Lacklands has. We see this as a very positive step, which will make [the companies] that much more substantial in terms of turnover.”
In its half-year result announcement in February Broadway said it had identified an acquisition opportunity, and would need a rights issue in September to finance the purchase. Milliner expects the rights issue to be completed in November.
He says Broadway fully intends to make the acquisition, but the deal currently remains conditional.
Lacklands director John Evitt says the move will be extremely successful in the long-term, and the two will make a strong company together. His firm’s annual turnover is about $12 million, he says.
Both HE Perry and Lacklands have lengthy histories, with the former established in 1932 and the latter in 1949.
Although HE Perry is headquartered in Christchurch, each has premises in the Auckland suburb of Mount Eden, and Milliner says there is an “obvious fit” to move HE Perry’s operations to the Lacklands building. He says there may be some changes in staff roles as the businesses combine, but it’s too early to say what they could be.