Paladin To Wrap Up £150m Paperchase Takeover

An American private equity firm is close to wrapping up a £150m purchase of Paperchase, the high street stationery chain.

Sky News understands that Paladin Capital has in recent days emerged as the front-runner to buy the business in a deal that would mark the latest prominent retailer to change ownership.

Paladin is not yet in exclusive talks but is the favourite to clinch a deal, according to people close to the auction.

The US-based firm is said to be keen to buy the business to expand its presence in America, where it recently launched online and trades through 1400 Target stores and 1200 Staples outlets across the country.

Other bidders for Paperchase have included Quilvest, which manages the wealth of Switzerland's Bemberg family and other high net worth clients.

The chain is currently owned by Primary Capital, which bought it in 2010 from Borders, the bookstore chain which had run into financial difficulties, in a £30m deal.

Paperchase has continued to be profitable, despite consumers' changing purchasing habits, with bespoke digital greeting cards and stationery services becoming increasingly popular.

Employing 1,500 staff across its estate, it has 115 standalone stores and 29 concessions in the UK, while internationally it operates from 37 sites in markets including Canada, Denmark, France and the UAE.

Paperchase recorded sales of £28.4m in the five weeks to December 27, up 6.5% on the previous year, a strong performance during a Christmas which reflected mixed fortunes for many high street businesses.

Last autumn, Primary Capital hired advisers at PricewaterhouseCoopers and Financo, a US-based firm, to handle an auction of Paperchase.

A spokeswoman for Primary and Paperchase declined to comment.