Westminster – A pair of office-supply company veterans are on their way to creating a nationwide wholesaler of office furniture.
OfficeSource, started by Todd Elmers and Richard Millett Jr., has snapped up two regional furniture wholesalers with a combined $70 million in sales.
The men are former executives of Broomfield office-supply giant Corporate Express.
By acquiring smaller, regional wholesalers, Elmers and Millett aim to make their Westminster company a nationwide wholesaler of office furniture. The acquisition of Kansas City, Kan.-based Mid-Continent Office Distributors and Sacramento, Calif.-based Equipment Distributors gives OfficeSource two regional offices and 10 distribution centers employing more than 160 people.
Elmers, 46, was Corporate Express’ senior vice president of merchandising and furniture. Millett, 44, was its vice president of acquisitions and corporate development before leaving to become chief financial officer for Alpine Access, a call-center company.
Their former boss said the duo’s new venture could fill a void he had noticed during his tenure with the office-supply company.
“We were building a national office-products distribution company,” said former Corporate Express chief executive Bob King, who left the company in 2001. “It would have been very convenient to have a national wholesaler that we could interface with and get product from. There wasn’t one we could go to because they tend to be very regional in nature.”
Elmers and Millett are diving into an industry that is just beginning to recover from a three-year downturn.
After seeing business decline each year since 2001, the $10 billion office furniture industry grew 5 percent in 2004 and is expected to grow 11 percent this year, according to the Business & Institutional Furniture Manufacturers Association, a Grand Rapids, Mich.-based trade group.
Most of that growth will be concentrated in the middle-market, Elmers said.
“There’s been a lot of movement away from the more expensive furniture,” he said. “In general, the quality and design level has come up, but … the price is still significantly less than the higher end.”
Elmers said the company needs five to seven acquisitions to meet its nationwide distribution plan. He expects to reach that goal within two years.
The two are financing the privately held company with $12 million in credit from PNC Business Credit and $4.2 million in private equity funding from Forrest, Binkley and Brown, an Irvine, Calif., private equity firm focused on investing in middle market buyouts.
Staff writer Kristi Arellano can be reached at 303-820-1902 or karellano@denverpost.com.
