Connect Books 'held for sale' after deadline passes without deal

The Connect Group is “considering with its advisors” what action to take after private equity from Aurelius failed to buy its Books Division by the agreed deadline last night (31st January).

Connect Books, which includes wholesaler Bertrams, e-commerce firm Wordery and the academic library supply arm Dawson Books, is now classified as “held for sale” for accounting purposes, m.d Justin Adams said.

A statement issues to the London Stock Exchange this morning said: “Connect Group announces that Aurelius failed to complete the transaction before the agreed deadline of midnight on 31st January 2018, as it was obligated to do under the terms of the SPA. As a result, Connect Group is considering with its advisers what action it will now take in light of this development.”

Adams told The Bookseller staff were keen not to be “distracted” by the sale process.

“For Connect Books, it remains ‘business as usual’ under the Connect Group umbrella,” he said. “Our primary focus will be on providing great service to our customer and publisher partners supported by ongoing improvements in the breadth and depth of our offer, and targeted investment to support this and the most cost efficient supply chain possible.  We will continue to be able to call on the support of Connect Group until any future change of ownership."

Connect Books was put up for sale in October with a price tag of £15m after Connect Group decided to concentrate on becoming a specialist logistics business.

Aurelius, a "pan-European" investor, with offices in Munich, London, Stockholm and Madrid, and listed on the Munich stock exchange, agreed to buy the company in December for "up to" £11.6m, which included an expected deferred consideration of £1.05m.

However, last month it unexpectedly backed out of the agreement, saying it could see “no way of financing” it.  At the time, Adams said talks between the two firms had broken down last week but that Aurelius’ move to back out of the deal had been “unexpected”.

The Booksellers Association has said it hopes the books supplier and distributor will find a new buyer soon and that the period of uncertainty for its customers will be “brief”.