Consolidation Shrinks the Aftermarket

Consolidation in the aftermarket has been happening at a regular pace. Over the last few months alone, there were several notable mergers and acquisitions, including Clover's acquisition of ERS, Reclaim IT, and Pinpoint; Katun's purchase of Media Science's toner business; KMP's purchase of Intercopy; MBP's purchase of GTA SISTEMAS; and Redeem's purchase by an incoming management team.

  • Clover continues to assert its market dominance by making key acquisitions to expand its recycling, remanufacturing, and postage businesses.
  • Katun's acquisition of Media Science's toner business strengthens its existing color and black & white product lines, offering a greater range of products for customers across channels.
  • KMP's strategic merger with Intercopy gives KMP a unique product line in Europe that includes its existing printer solutions for laser, inkjet, thermal transfer, and matrix printers as well as access to supplies and channels for the traditional copiers and professional multifunctional printers.
  • MBP's purchase of GTA SISTEMAS puts them in an ideal position for expansion into the Spanish and African market, regions that represent significant potential for the remanufacturing market.
  • Redeem is well positioned for future growth backed by a strong management team with industry experience and knowledge, as well as ambitious expansion plans.
  • Globally, aftermarket companies are chasing the strategy of acquiring companies that help them expand vertically. This is a way to gain more control over the supply chain, mitigate risk, and reduce exposure on empties.

    With market consolidation shrinking the number of available supplies manufacturers, we expect companies to look outside their core business capabilities and acquire other businesses that are complimentary, allowing some expansion into other markets.

    In addition, it is important to note that some of the already large remanufacturers are getting even larger and more powerful with these acquisitions. Therefore, it is in the interest of the medium-sized remanufacturers to look at joining forces so they can continue to compete. Smaller, localized remanufacturers may have the benefit of dominance of a small geographic region and should look to keep customer loyalty by expanding services to their customers. Small remanufacturers could find advantage partnering with small or medium-size MPS providers as they already have the advantages of providing customer facing services.

    The coming year is sure to be marked with more mergers and acquisitions. InfoTrends will continue to monitor the activity and report on the impact on the supplies market.