A&R Whitcoulls to acquire Borders assets in Australia, New Zealand and Singapore

• A&R Whitcoulls will acquire the Borders assets and the use of the Borders trade marks in Australia, New Zealand and Singapore
• Total transaction valued at up to A$110 million
• The proposed acquisition has already received approval from the ACCC and NZCC

A&R Whitcoulls Group Holdings (NZX: ARW; "A&R Whitcoulls Group") today entered into an agreement with Borders Group Inc ("Borders Group") for the acquisition of 30 Borders Stores in Australia, New Zealand and Singapore.

Under the agreement, A&R Whitcoulls Group will gain exclusive rights to use the Borders trademarks in Australia, New Zealand and Singapore.

The transaction has been approved by the Australian Competition and Consumer Commission ("ACCC") and the New Zealand Commerce Commission ("NZCC").

A&R Whitcoulls Group Managing Director, Ian Draper, said that the Borders business is complementary to the Company’s existing assets, offering a different format from Angus & Robertson in Australia and Whitcoulls in New Zealand. "Borders’ experience-based model invites customers to browse books, magazines, music and DVDs, with cafes in most stores. It’s a model which has proven popular in the local market, and targets a different demographic with its premium format and wide range of products."

The transaction is valued at up to A$110 million and is expected to be finalised next week.

"The acquisition creates a strategic footprint for the group which comprises different formats and provides a foundation for growth and innovation. We are pleased to bring these businesses together and excited about the opportunities presented by this transaction," said Mr Draper.

"The combined experience, skills and scale of the enlarged Group will create a platform for an expanded and more diverse customer offering across a number of strong brands. The Borders management team have a demonstrated track record of innovation and will be able to make a valuable contribution to the development of the broader group"

The existing Borders management will remain in place following the transaction. Borders’ Managing Director, John Campradt was upbeat about the deal. "It has been an exciting few years building the Borders brand in Australia, New Zealand and Singapore. This transaction will bring to the local business scale and technology support which will enable us to take things to a new level."

A&R Whitcoulls Group currently owns and operates: Australia’s oldest bookstore chain, Angus & Robertson; popular New Zealand book, magazine and DVD retailer Whitcoulls; a newsagency franchise chain called Supanews; and a seasonal ‘pop up’ retailer Calendar Club.

A&R Whitcoulls Group has been focused on growing its presence in the book retailing markets in both Australia and New Zealand over the past year through the expansion of its online offering to compete with international players such as Amazon. It has also developed a new loyalty program in the New Zealand market which has recently been launched in Australia.

"Increasing our presence and making a wide range of books and other popular forms of entertainment accessible to a wide range of people continues to be our focus," Mr Draper said. "We are looking forward to working with the Borders team on the continued expansion of A&R Whitcoulls/Borders group of businesses."

About A&R Whitcoulls A&R Whitcoulls is a leading book and stationery retailer in Australia and New Zealand. A&R Whitcoulls currently operates four divisions:

• Whitcoulls – A nationwide book and stationery chain with the largest share of the New Zealand market. Within the Whitcoulls division, Bennetts Tertiary sells textbooks and related course materials to students and other campus users.
• Calendar Club – A chain of specialty calendar stores which operate over the Christmas period (October to January) in major shopping centres and other key retail precincts in both Australia and New Zealand.
• Angus & Robertson – A nationwide bookstore chain with the largest market share in Australia.
• Supanews – A joint venture business that operates newsagencies in Australia.

The Whitcoulls and Angus & Robertson brands are well known and established in their respective markets and have histories dating back over 100 years. Pacific Equity Partners acquired the Group from the UK retailer, WH Smith, in May 2004.

About PEP

PEP is the most active private equity fund in Australia and New Zealand, providing strategic management experience and capital resources to grow companies in a range of business situations. PEP Fund IV is the largest private equity fund in Australia and the firm has over $6.0 billion of equity funds under management. Since its establishment in 1998, PEP has made 18 portfolio company acquisitions and more than 20 add-on acquisitions at the company level.

PEP currently has 13 companies in its portfolio with combined revenues in excess of $3 billion per annum, spanning industries including food, liquor, technology, financial record-keeping and retail trade. Recent PEP investments include:

• American Stock Transfer & Trust (AST) – The largest independent share registry in the US by issuer number.
• Hoyts Group – A leading cinema exhibitor and advertiser in Australia and New Zealand.
• Veda Advantage – The leading provider of business and financial intelligence services through the use of financial record-keeping, analytics and technology.
• Independent Liquor – A leading manufacturer and distributor of alcoholic beverages in Australia and New Zealand, with a particular focus in the ready-to-drink (RTD) category.
• Australian Administration Services (AAS) – A provider of administration services to the superannuation and retail master trust industries. AAS has been merged with Link Market Services, a share registrar and analytic business also owned by PEP.

Supanews is Australia’s leading newsagency retailer and Australia’s only business model for the newsagency industry. The Supanews business services franchise model provides a strong brand, a proven system of operation and a strong retail concept. Supanews’ systems and controls make the operation of a newsagency easier than ever before.