KNP BT pulls plug on packaging arm

Buyout Sell-off fuels speculation over loss-making reseller.

Dutch conglomerate KNP BT has offloaded its packaging division, but its troubled subsidiary Info'Products will not receive a cash injection from the sale, fuelling speculation over the reseller's future.

KNP BT's packaging arm was bought last week by Cinven/CVC Capital partners BV, a European venture capital consortium, for #1 billion.

Patrick Deleede, KNP BT corporate communications manager, said the company, which will be renamed Buehrmann NV, will expand its office products and paper merchandising sides.

He said: 'In due course, we may also look at information systems, including Info'Products. But we are not definitely going to invest money in this side because the reseller needs a stronger position in Europe before it can expand.'

But one industry source said: 'Info'Products' future depends on whether the reseller is a key constituent of the group and if KNP BT is prepared to support a company that continues making losses.'

He added: 'The parent company has invested money in Info'Products, but if it isn't going to form a long-term part of the business, it would make sense to sell it.'

The packaging arm accounted for over 15 per cent of KNP BT's sales for 1997 and around 35 per cent of its net operating profit. The split, announced on 12 February, follows exclusive revelations in PC Dealer that Info'Products UK made accumulated losses of over #10 million for 1996 and 1997 (PC Dealer, 29 April).

Dataquest analyst Sandy Cals-Summers said: 'It depends on what KNP BT sees as its core competency - IT reselling or office products.'

Cals-Summers added that dealers needed investment to get more out of partnership with their larger clients.

Last week, KNP BT also revealed it had signed an agreement with IBM Printing Systems Company to sell paper products under the IBM brand in Western and Eastern Europe.