A Course to the Top

“We still need to buy companies in the geography, music and math areas. There are a couple thousand more companies out there that might make good targets for acquisition,” he says.

A niche cataloger that features some of its own proprietary products is a good target for School Specialty — a smart move, says Trace Urdan, a financial analyst with Think Equity in San Francisco. “School Specialty’s traditional company sold the pencils, crayons and paper — largely commodity products. But its newer, acquired companies tend to offer proprietary products into the space — things that today’s teachers want. These companies are really intended to serve the teacher with items they can’t easily get elsewhere,” Urdan contends. “The real point of acquisition is to pick up those proprietary products — and that’s what their specialty catalog business is all about.”