ACCO Australia could substantially add to its product portfolio following the likely acquisition-cum-merger between ACCO and MeadWestvaco's consumer and office products division in the US.
ACCO Australia is saying little about the Mead deal, which is expected to be finalised within weeks following the green light from the US tax office.
Stationery News understands that much of the Mead range is complementary to ACCO's current product mix.
Mead markets an extensive range of educational and home office stationery products (including calendars) under its own name and brands such as Five Star, Trapper and Cambridge.
It is expected that the deal will be finalised on 30 April and that the new, combined ACCO/Mead entity will officially trade from 1 May.
ACCO last week reported first quarter sales of US$288.9 million, a three per cent drop on the same period last year. ACCO said that sales were up in "all major geographies except Europe and Canada", with sales in Europe declining by around US$13 million as previously expected.
Adjusted operating income declined approximately US$1 million due to lower sales in Europe and Canada, adverse product mix within the computer products business, and lower gross profit margins due to foreign exchange impacts on selling prices in Canada and Australia.
ACCO reiterated its full-year sales guidance for the existing ACCO business, saying that sales are expected to be slightly positive in local currencies, but that adjusted earnings per share were expected to increase by 30 per cent due to productivity savings.
The company announced that it was looking to raise US$500 million in the form of a private notes offering.
The proceeds will be used to finance part of the Mead deal and, in part, to pay off certain existing debt.
Mead losing money
Meantime, MeadWestvaco Corp announced sales for its consumer and office products business for the first quarter ended March 31 were US$107.8 million, down from US$115.9 million last year. Operating loss narrowed to US$1.8 million from US$4.3 million in the prior year quarter.
