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Bid nets Copymore founders pounds 10m payout

The two founders of an Enfield-based photocopying business - who started out 16 years ago with pounds 500 in an old Chingford bakery - stand to make pounds 10m each from their stakes following an agreed bid that values the company at pounds 23.5m.

Jeff Godbold, 42, and Claudio Sarno, 39, each own 42 per cent of Copymore, a USM-listed dealership that specialises in the supply and servicing of Canon and Toshiba machines. The company was the subject of a 214p-a-share bid yesterday from Alco Standard, a Pennsylvanian-based group that is expanding rapidly in the UK. The shares closed up 38p to 208p.

The two founders are the latest beneficiaries in a radical shake-up of the highly fragmented photocopier market, which has been criticised for its heavy-handed sales techniques and expensive contracts.

David Pope, Copymore's chairman said: "The office equipment sector has seen considerable activity over the past year with the consolidation of the industry into larger groupings. Copymore's board has been mindful of the changes and for some time has believed the future of the company would be best secured by becoming part of a large group with more substantial resources."

Ian Crabb, Alco's UK managing director, said the Copymore deal would significantly expand its UK presence.

There are about 1,000 photocopier dealerships in the UK and most are small, privately owned concerns. Alco Standard is one of a number of US giants that have been mopping up smaller quoted photocopying groups. The company has worldwide sales of more than $8bn and targeted the UK two years ago.

It acquired Erskine House for pounds 50m in June 1993. In May this year, it won a three-way battle for Southern Business group in a deal worth pounds 81m. The Copymore deal gives it a UK market share of around 10 per cent.

Their main competitor is Danka Business Systems, another US group that has moved into Britain.

Danka also completed a deal yesterday, paying pounds 2m for Regent Business Systems, a quoted supplier of Ricoh and Konica equipment in the South- east. Danka now has UK sales of pounds 60m.

Copymore was formed in 1979 and floated on the USM in 1988. A year later it began an acquisition spree, buying up distressed rivals laid low by the recession.

After 1989 it bought 12 companies and last year reported profits of pounds 1.7m on sales of pounds 40m.

Alco Standard was founded 30 years ago by an American named Tink Veale.

It has a policy of buying entrepreneurial companies but keeping the founders on to run their businesses. The Copymore founders will stay on at the company and help build the group, backed by the financial muscle of Alco.