Esselte

We strive to make it easier for people to organize the modern workplace. We work close to our customers and help them conduct a profitable business. They get easy-to-sell products with strong brands. They also get a reliable partner with a superior service level and with local and global presence. Esselte is the world's leading office supply manufacturer with customers in 120 countries across the globe. The company has over 30,000 items in its product arsenal including file folders and ring binders, staplers and desk accessories, printers and labels, and computer accessories. These products--found under the DYMO, Esselte, Leitz, Pendaflex, and Oxford brand names--are sold to wholesalers, office supply stores, and mass retailers. J.W. Childs Associates L.P., a private equity investment firm, acquired the company in 2002. Esselte was born out of the 1913 union of 13 Swedish printing businesses, some of which had been in operation since the 1600s. The merger consolidated the operations of all 13 companies into an entity known as the SLT group, creating one of the largest graphics firms in the region. SLT grew substantially over the next 50 years, adding a variety of different operations to its holdings through strategic acquisitions. By the 1950s, the company printed stationary, playing cards, maps, forms, share certificates, and bonds, and was also involved in book binding and paper manufacturing. It soon became apparent however, that SLT's unwieldy group of companies was not operating efficiently. Thus, it launched a major restructuring effort in the early 1960s in an attempt to streamline operations. It sold off unprofitable businesses combined similar divisions. The reorganization proved successful, and in August 1970 the company, now organized as a top office supplies concern, adopted the name Esselte AB. As a result of the restructuring process, Esselte found itself in an enviable position. With annual sales of over $300 million, almost no debt, and cash to spend, the company embarked on an international expansion plan that would eventually catapult it into the top spot in the industry. Under the direction of managing director Sven Wallgren, Esselte made its first key move by acquiring Benson's International Systems Ltd., the world's largest producer of ring binder mechanisms, in 1975. By the early 1980s, over half of Esselte's revenues stemmed from operations outside of Sweden. A September 1981 Financial Times article summed up Wallgren's acquisition strategy as consisting of two principles: "acquisitions should possess a strongly defined market or technical characteristic and secondly that they should have greater growth and profit potential than the parent company." In keeping with this logic, the company added Letraset Ltd., a large graphic design and technical drawings products supplier, to its holdings in 1981. Overall, the company bought more than 150 companies over the next ten years. During the late 1980s, Esselte entered the retail outlet market through a series of acquisitions including Einersen of Norway. This move into the retail sector proved ill-considered as the company began competing with many of its customers. Esselte's fortunes began to change as a recession slowed its customers' spending. Profits fell and sales in its key markets faltered. In 1990 its major shareholder, Mobilia, declared bankruptcy. By now, Esselte was plagued by many of the same problems it had faced in the 1960s when it was forced to undergo a major overhaul. Hans Larsson, Esselte's CEO at the time, insisted the company restructure in order to shore up profits. In May 1990 Larsson's management team agreed and set plans in motion to sell off its commercial real estate, printing, and publishing businesses. The firm also bought back the shares of EBS it didn't already own, making it a wholly-owned subsidiary. Despite these efforts, pre-tax profits fell by 75 percent that year. Cost cutting measures and job cuts continued in 1991.