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Adveo Looks at Adding Latin America When Integration Ends

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Adveo Weighs Entering Latin America With Purchase After Revamp
Adveo signed a four-year, 9 million-euro contract last month with International Business Machines Corp., the largest computer-services provider, to integrate systems and add automation at the Unipapel, Adimpo and Spicers brands to help speed response times to customers. Photographer: Scott Eells/Bloomberg

July 8 (Bloomberg) -- Adveo Group International SA, Europe’s biggest office-equipment wholesaler, is studying acquisitions to enter faster-growing markets in Latin America and eastern Europe after integrating earlier purchases.

The company, which operates in eight western European countries, is already exploring suitable targets for purchase after it completes a reorganization outlined in a business plan until 2015, Chief Executive Officer Millan Alvarez-Miranda said in an interview. Adveo would “bet on mobility” by expanding in electronic products such as tablets, he said.

“We’ve just started tracking business opportunities out there that may help us boost our top line or enter new markets,” Alvarez-Miranda said at Bloomberg’s Madrid office on July 4. “We are now creating a very solid base in order to carry out our next transaction.”

Founded in 1976, Madrid-based Adveo has grown from a line-up of paper products into services and equipment such as printers. Acquisitions have included toner maker Adimpo for 45.5 million euros ($58.4 million) in 2009 and DS Smith Plc’s Spicers office-products unit for 196 million euros in 2011.

Those acquisitions and the purchase of office-supply brand Buro+ in May have helped Adveo, which changed its corporate name from Unipapel a year ago, reduce dependence on its debt-battered home country by adding sales in markets such as Germany and France.

Cutting Dealers

“Our industry works very well in mature economies, because distributors appear in mature sectors and markets,” the CEO said. “A new product in a growing market goes straight from the maker, not through a dealer.”

Adveo signed a four-year, 9 million-euro contract last month with International Business Machines Corp., the largest computer-services provider, to integrate systems and add automation at the Unipapel, Adimpo and Spicers brands to help speed response times to customers.

First-quarter net income dropped 29 percent from a year earlier to 4.5 million euros as sales fell 6.1 percent to 294 million euros, Adveo said in May. Profit declined because of one-time effects from the Spicers takeover that boosted year-earlier earnings, Alvarez-Miranda said.

Adveo, a distributor for equipment makers such as Hewlett-Packard Co., Canon Inc. and Lexmark International Inc., is forecasting full-year earnings growth, and has already seen an improvement in the second quarter versus the first three months, Alvarez-Miranda said.

The shares rose as much as 0.6 percent to 12.80 euros and were trading 0.1 percent higher at 12.73 euros as of 3:38 p.m. in Madrid.

To contact the reporter on this story: Manuel Baigorri in Madrid at mbaigorri@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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