CCP Client 'CO202'
A Category Manager and Distributor of
Specialty Books and Magazines

Clayton Capital Partners is pleased to exclusively represent "CO202" in the sale of its business. CO202 is a category manager and distributor of specialty books, magazines, and other media to big-box, specialty retailers. The Company is estimated to do$7.5 million in EBITDA in 2012 growing to $10.0 million by 2014.

  • Three Business Segments - Distribution (97% of 2012 net sales), Publishing of proprietary and joint venture content (1%) and Merchandising (2%). While Publishing and Merchandising are relatively small businesses, they are both highly profitable.

  • Proprietary Software Tools - The Company has developed proprietary software tools to assist in the analysis, ordering and fulfillment of thousands of titles and millions of units shipped to the 16,000 retail locations it services nationwide. Implemented in 2012, these tools have increased Magazine sell-through from 28% in 2011 to 33% in 2012 and forecasted to be 35% in 2013.

  • Proprietary In-Store Merchandising Team - A dedicated team of 1,700 service professionals with nationwide reach provides competitive service advantage.

  • Outperforms Industry - Using its proprietary tools and merchandising team to provide customized category management by customer by store by title enables CO202 to outperform industry sales and efficiency trends, including 92.8% on books.

  • Specialty Retailer Segment - The Company targets specialty retailers with customized titles that provide higher margins than the more commodity oriented, mainstream publications. Specialty retail has also outperformed in the economic downturn.

  • Significant Expansion Capacity - The Company currently operates at approximately 50% of capacity for book and magazine distribution, providing significant room for growth.

  • Improving Financial Performance - The economy, the loss of a large customer and one-time year-end adjustments and write offs negatively impacted sales and margins through 2011. Sales and profits have rebounded significantly with Net Sales expected to be up 13.6% in 2012 and EBITDA increasing by 15 times. Growth is projected to continue with EBITDA up by 33% through 2014.

CO202 Financial Summary
($ in Millions)
Actual 2009
Actual 2010
Actual 2011
10 Months
10/27/2012
Projected
2012
Projected
2013
Projected
2014
Net Sales 150.9 137.2 107.6 96.5 122.2 135.1 145.1
EBITDA
5.6
6.3
0.5
6.1
7.5
9.0
9.9
EBITDA %
3.7%
4.6%
0.5%
6.4%
6.2%
6.6%
6.9%

CCP Client 'CO202' - NON-DISCLOSURE AGREEMENT
The undersigned hereby agrees:

That all information, data and materials disclosed or furnished (herein called the Information) by Clayton Capital Partners Acquisition Candidate CO202 (herein called the Company) will be maintained strictly confidential and that, in consideration for such disclosure, no use of the Information will be made by any signing party, or employees of such party, other than for internal evaluation purposes, on a strictly confidential basis. 

It is understood that disclosure of any of the Information, including the possibility that the Shareholders may consider sale, disclosure of the current status of the Company, or disclosure of any information to customers, vendors, competitors, or employees of the Company would cause serious financial damage to the Company and/or its affiliates. 

The undersigned also agrees that, for the term of this agreement, they will not solicit for employment any person who is currently employed by the Company.

The undersigned agrees not to copy, duplicate, disclose or deliver all or any portion of the Information to a third party or permit any other third party to inspect, copy or duplicate the same except those parties deemed necessary by the undersigned to evaluate the possible transaction (including agents, advisors, affiliates, accountants, attorneys, consultants, and lenders). It is understood that the undersigned may disclose Information to only parties who (i) require such material for the purpose of evaluating a possible transaction and (ii) are informed by the undersigned of the confidential nature of the Information and agree to be bound by the terms hereof. The undersigned further agrees to be responsible for any breach of this agreement by the above mentioned parties, and that these parties will not use any of the Information for any reason or purpose other than to evaluate a possible transaction or use the Information in any way detrimental to the Company. The undersigned also agrees that upon any such breach or any threat thereof, the Company shall be entitled to appropriate equitable relief in addition to whatever remedies it might have at law.

This shall not, however, prevent the undersigned from disclosing to others or using in any manner:

  1. Information which has been published and has become part of the public domain other than by acts or omissions by the receiving party.
  2. Information which has been furnished or made known to the undersigned by third parties as a matter of right without restriction of disclosure, or
  3. Information which the undersigned can show was already in its possession at the time it entered into this Agreement and which was not acquired directly or indirectly from the Company, their representatives, its employees or their representatives.

This agreement shall remain in effect for a term of two years from the execution date hereof and upon request, the receiving party will promptly return all data and materials furnished by the Company and destroy any internal analyses and/or workpapers related to the evaluation of the Company.


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CCP Client 'CO202'
For Additional Information Contact
Christy Viviano, Sr. Associate
8112 Maryland Ave., Suite 250 | St. Louis, MO 63105
Ph 314-725-9939 x 533 | Fax 314-725-9938
cviviano@claytoncapitalpartners.com