Bookseller Borders buys Paperchase

The American book firm Borders bought the British stationers Paperchase from the private equity group Graphite Capital yesterday in a deal that values Paperchase at £18.7m.

The American book firm Borders bought the British stationers Paperchase from the private equity group Graphite Capital yesterday in a deal that values Paperchase at £18.7m.

Bordersbought 15 per cent of the company in 1999. Yesterday's deal sees this increase to 97 per cent, with the four directors of Paperchase retaining the other 3 per cent. Steven Cavell, a partner at Graphite, said: "Paperchase has produced a successful formula and earned an attractive return. Borders will provide a good home for the Paperchase brand."

When questioned if Paperchase's directors would materially benefit from the takeover, the response from Tim Melgund, the chief executive, was a hearty laugh and the comment, "you bet we are".

Graphite Capital backed Paperchase directors when they conducted a management buyout from WH Smith in 1996 - since then annual sales have risen from £7.7m to £27.4m.