SOS buys manufacturing assets in $80m deal
Published:Tuesday | April 17, 2018 | 12:00 AMSteven Jackson/ Senior Business Reporter
Stationery & Office Supplies Limited (SOS) announced that it acquired the manufacturing assets of Book Empire Limited, which makes notebooks, choir books, and writing pads, in a deal worth $80 million.
With the acquisition, SOS will enter into light manufacturing, starting in the first week of May.
"The beauty of this deal is that our core business already included selling paper items. So instead of [outsourcing], we will be in control of the items [used] to make the products. It is a starting point for us in manufacturing, and we will grow," said Alan McDaniel, deputy managing director and logistics manager at SOS.
Previously, SOS would outsource the making of its pads and paper stationery, but now, production of such items will move in-house at the company's Beechwood Avenue complex, said McDaniel.
The supply of office furniture, which are also assembled at Beechwood, remains the company's main business line.
The assets acquired from Empire include ruling machines, guillotines, gluing machines, stapling machines, and book presses. The total value of the purchase was $60 million, financed through a bond issue. McDaniel expects the total investment, factoring raw materials and renovations, to reach $80 million.
With the expansion, SOS will initially be employing an additional 25 persons. Bruce Baylis, who led the Book Empire operations, will continue to oversee the business under SOS ownership.
McDaniel also told the Financial Gleaner that the Baylis family will retain ownership of the Book Empire name, while SOS will get the assets and the brand SEEK. Through SEEK, the stationery company plans to penetrate new markets by increasing sales agents in Jamaica and then regionally, targeting the smaller islands, he said.
Book Empire operated from two locations in Kingston, with its main office at Norman Road. Efforts to reach the Baylis family for comment were unsuccessful.