Melbourne, Australia-based Spotless Group Ltd. has acquired London-based hanger company Braitrim Holdings Ltd. for A$350 million (US$171.1 million).
The addition will double worldwide sales for the Spotless Plastics division to more than A$500 million (US$244.4 million).
Spotless' North American operations had tried to sell hangers and related products in European markets for years, while Braitrim had attempted to crack the U.S. market. The acquisition will help the companies expand in each other's markets, said Brian Blythe, Spotless managing director.
"Our products are similar, but not the same. Primarily, our U.S. operations service the mass merchandisers' market — for example, Target, Kmart and Wal-Mart. In the United Kingdom and Europe, there aren't as many discount stores," Blythe said.
"Braitrim services High Street retail department stores where the requirements are different."
Braitrim's key department store retailer is London-based Marks & Spencer plc.
In the United States, Braitrim will target retail chains such as the Gap, Blythe said. However, Spotless executives still are deciding the best way for Braitrim to enter the U.S. market.
"We will look at it for six months to decide where we are going. We have some early ideas, but we have to decide which idea is most suitable," Blythe said.
Both firms have potential new products to take advantage of changing fashions. Each time a new garment is produced, new hangers needed to be made to suit the design of the product.
Blythe said both companies' management structures were similar. Both companies outsource manufacturing, including injection molding, to focus on customer service logistics and new products.
Spotless last year had expressed interest in acquiring a small molding factory in Mexico, but it was "of no great urgency," Blythe said.
Braitrim has offices and warehouses in several European countries, including Germany and France. It also has operations in North Africa, the Middle East, Hong Kong, Sri Lanka, Thailand and Singapore.