PowerA acquisition a ‘great fit’ for Kensington brand.

 

Global business products and stationery supplier ACCO Brands has ramped up its strategy to become a “consumer-focussed” company with the acquisition of US gaming and video accessories company PowerA.

 

“This acquisition represents a major step in our continuing strategy to transition ACCO Brands into a faster growing, consumer-focused company.” Boris Elisman, president and CEO of ACCO Brands, said.

 

“Our Kensington computer accessories business has shown strong growth over the past few years. PowerA is a similar business to Kensington, but is in the console gaming accessories market. It will be a great fit," Elisman said.

 

“The acquisition of PowerA further accelerates our transformation into a consumer products company. After the acquisition, more than 50 per cent of our sales will come from consumer, school, and technology products, which will offer faster-growing market demand over the next several years. Our channels will become more consumer and online centric, and we will be less dependent on growth-challenged customers and categories. This acquisition meaningfully improves the organic sales growth and profit potential of our business,” he said.

 

Eric Bensussen, president and co-founder of PowerA, added: “The combination of ACCO Brands’ global footprint and our award-winning gaming accessories will fuel the PowerA brand and accelerate the already rapid growth and product adoption we have experienced in the console, mobile and PC gaming space.” 

 

Terms of the acquisition include total upfront consideration of US$340 million, plus an additional earnout of up to US$55 million in cash, contingent upon PowerA achieving one- and two-year sales and profit growth objectives, which are aligned with ACCO Brands’ expectations of the business. Net sales of PowerA in 2020 are expected to be approximately $200 million, up approximately 20 per cent versus 2019.

 

Console gaming market worth billions

 

According to ACCO Brands, console gaming is a large, fast-growing industry segment with historical annual sales growth of 13 per cent. PowerA currently has approximately 75 per cent of its sales in the United States, with the remainder mainly in Europe. The addressable market for PowerA is approximately US$2 billion in the US and is even larger internationally. It is expected to see incremental growth from the launch of the next generation of console platforms. 

 

There are future opportunities to leverage product development and supply chain providers between PowerA and Kensington, as well as expand PowerA’s presence and sales in EMEA and other international markets.