£20M deal strengthens entertainment wholesale biz.
British entertainment and retail giant Woolworths Group has acquired AMP Enterprises Ltd, the holding company of Total Home Entertainment Distribution Ltd (THE), for £20 million ($37 million). Woolworths agreed to buy the entertainment wholesaler from venture capitalists 3i Group in cash deal.
In a statement issued to the London Stock Exchange, Woolworths says its new asset will bolster the group's existing Entertainment U.K. (EUK) entertainment wholesale division.
"This acquisition brings a number of high quality customers to the Group and speeds the expansion into areas such as books and primary distribution for entertainment publishers," comments Woolworths Group CEO Trevor Bish-Jones. The combination of the two businesses, he explains, will "create a stronger operation better able to support its customers' businesses."
THE's biggest client relationship is with Sainsbury's. The new deal, announced Tuesday (Sept. 5), coincides with a signing of a new contract to supply entertainment product to the supermarket chain. THE's other customers include independent British music retailers Fopp and Music Zone.
In the year to June 3, 2006, AMP Enterprises reported consolidated profits of £3.8 million ($7 million) on revenue of £302.5 million ($569 million).
Woolworths has 819 British stores. It lags slightly behind market leader HMV in terms of singles sales, according to labels body the BPI. In 2005, the BPI says Woolworths accounted for 28.5% of consumers' singles expenditure and 26.9% of units, compared to 30.6% and 29.8% respectively for HMV. In terms of albums, Woolworths had 11.2% of expenditure and 10.6% of units (HMV: 23.5% and 22.2%).