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July 12 – July 18, 2010 Edition Borders Sells Paperchase to Reduce Debt
ANN ARBOR, Mich./AUTHORLINKNEWS/ July 13, 2010 Borders Group has entered into an agreement to sell Paperchase Products Limited (Paperchase) to Primary Capital Limited, a leading U.K.-based private equity firm. Paperchase, a wholly-owned subsidiary of Borders Group, is a retailer of stationery, cards and gifts based in the U.K. Under the agreement, Borders Group will continue to purchase and carry products designed and sourced by Paperchase in its U.S. stores.
The company will receive proceeds of approximately $31 million (USD based on current exchange rates) upon closing, which is expected within the next week. The company is required to use $25 million of the proceeds to reduce the amount outstanding under its $90 million term loan credit facility. The completion of the sale is subject to customary closing conditions.
The sale of our Paperchase business is another major step in strengthening our balance sheet and enables us to place an even greater focus on our financial and strategic initiatives, which are vital to a Borders turnaround and revitalization of the brand, said Mike Edwards, President of Borders Group, Inc. We look forward to continuing our strong relationship with the Paperchase team to provide our customers with the wide array of fashionable gift and stationery products theyve come to expect from Borders.
Were excited by the opportunity to build on the success of Paperchase, which is a well known design-led stationery brand in the U.K., whose products have received great visibility through Borders stores in the U.S., said Graham Heddle, a Director of Primary Capital. We look forward to working with the Paperchase team to build the business over the next few years.
Borders Group acquired a majority interest in Paperchase in 2004. Virtually all Borders stores nationwide feature Paperchase gifts and stationery products.
Primary Capital is an independent investment firm which invests in middle-market management buy-outs and buy-ins in the U.K. and continental Europe. Primary works closely with management to develop their business by providing long-term financial resources and strategic support over a three to seven year period.
Paperchase is the brand leader in design-led and innovative stationery retailing in the U.K. In addition to having a presence in virtually all Borders stores in the U.S., Paperchase operates 106 outlets in the U.K. including concessions in selected department stores run by House of Fraser Selfridges and Harrods, as well as in the Netherlands, Ireland and the Middle East.
Headquartered in Ann Arbor, Mich., Borders Group, Inc. (NYSE: BGP) is a leading specialty retailer of books as well as other educational and entertainment items. The company employs approximately 19,500 throughout the U.S., primarily in its Borders® and Waldenbooks® stores. Online shopping is offered through borders.com