Pelikan eyes RM5b revenue by 2012

The stationery maker aims to achieve the target through both regional and international mergers and acquisitions

Stationery maker Pelikan International Corp Bhd expects to hit RM5.05 billion in revenue by 2012, through mergers and acquisitions (M&As).

Its president and chief executive officer Loo Hooi Keat (picture) said the company is aiming at both regional and international M&As, but did not elaborate.

The main market-listed company, which posted revenue of RM1.3 billion last year, is anticipating its combined revenue to reach RM3 billion when it finalises the proposed acquisition of 66 per cent stake in Herlitz AG and its assets by year-end.

“We need to have economies of scale,” he told a media conference to announce the acquisition in Kuala Lumpur yesterday.
Pelikan, a 171-year-old German stationery brand, is acquiring 7.2 million shares in Frankfurt Stock Exchange-listed Herlitz, together with its Falkensee logistics centre and related assets, from Stationery Products Sarl, a wholly-owned subsidiary of global private equity firm, Advent International.

Loo said the purchase will cost Pelikan e45 million, while the voluntary general offer of the remaining 34 per cent stake in Herlitz will cost another e7 million.

The purchase price is at a 50 per cent discount to net asset, given the net assets of Herlitz and its property worth e104.5 million as at December 31 2008.

“If we take into account the property cost, which was built in 1994 for e175 million, it is a tremendous discount,” he said, adding that only a fifth of the 40ha land, which houses the Falkensee logistics centre, is currently utilised. e40 million will be financed from bank borrowings and the rest from internal funds.

Loo said the acquisition of Herlitz, Europe’s second leading stationery maker after Pelikan, will also result in over RM100 million cost savings from marketing and sales activities, co-branding as well as the integration of Pelikan’s logistics facilities into Falkensee.

He said by June next year, Pelikan will close its three logistics centres in Germany and move into the Falkensee logistics centre in Berlin that has two fully automated warehouses.

“We are not looking at retrenching our people (following the merger of logistic facilities), but we will retain them to support our expansion,” he said.

Loo said Pelikan has made a general offer for the remaining 34 per cent Herlitz shares with an offer price of e1.85 per share.

“After the announcement was made on Friday, it jumped to e3.25. When we negotiated the deal, the share price was at e1.50,” he said, adding that as of now, Pelikan will stick to e1.85 per share for the general offer.

Loo said synergies from the acquisition will result in a more comprehensive product range.

Founded in 1904, Herlitz is a leading manufacturer and distributor of office stationery and paper products in Europe and has strong market position in Germany and eastern Europe.