One Environmental Way
Broomfield, Colorado 80021-3416
Telephone: (303) 664-2000
Fax: (303) 664-3474
Wholly Owned Subsidiary of Buhrmann N.V.
Incorporated: 1986 as Business Express
Sales: $6.72 billion (2001)
NAIC: 323116 Manifold Business Form Printing; 453210 Office Supplies and Stationery Stores; 454110 Electronic Shopping and Mail-Order Houses; 561110 Office Administrative Services
Whatever a business needs to get business done, Corporate Express supplies it. Through our office supplies, furniture, computer and imaging supplies, PC software, document and print management and promotional products, we prepare companies and organizations around the world for work every day.
At Corporate Express, we provide our customers with what they need, when and where they need it--and always with the best service that they can possibly imagine.
1986: Jirka Rysavy acquires an office supply store in Boulder, Colorado, for $100; he renames it Business Express and reorients it toward corporate accounts.
1988: Rysavy acquires the office products division of Denver-based NBI Inc. for $12.8 million.
1990: Business Express is renamed Corporate Express, Inc.
1992: Revenues reach $420 million.
1994: Company goes public through an IPO, selling nine million shares at $7 per share; following the completion of six acquisitions, revenues skyrocket to $1.15 billion.
1996: Company enters the local same-day delivery service market with the purchase of U.S. Delivery Systems, Inc., which is later renamed Corporate Express Delivery Systems, Inc.; ASAP Software Express, Inc. is acquired.
1998: Overly rapid expansion leads to falling profits and a sagging stock price; company launches restructuring involving the closure of 100 offices and the elimination of 1,700 jobs.
1999: Corporate Express is acquired by Buhrmann N.V. for $2.3 billion and becomes a subsidiary of the Dutch firm.
2001: Corporate Express acquires the North American office products operations of U.S. Office Products Company.
Corporate Express, Inc., wholly owned by the Dutch firm Buhrmann N.V. since October 1999, is the world's largest supplier to businesses of office products, including office supplies, computer and imaging supplies, computer peripherals, and office furniture. Mainly serving large corporations, Corporate Express is the market leader in North America and Australia and holds the number two position in Europe. More than three-quarters of the firm's revenues are generated in North America, where the company's customers are served from 257 offices and through 42 distribution centers with more than six million square feet of space. In addition to its office products business, Corporate Express also operates several complementary manufacturing and services businesses: Corporate Express Document & Print Management, Inc., a manufacturer of forms; ASAP Software Express, Inc., which is a leading provider of services related to software licenses; and Corporate Express Promotional Marketing, Inc., a provider of customized corporate and brand products.
From Czechoslovakia, with Love
The company was founded in Boulder, Colorado, by Jirka Rysavy (pronounced YER-kah RIS-ah-vee). Born in Czechoslovakia in 1954, the son of a civil engineer and an educational researcher, Rysavy became a hurdler for the Czech national team, competing in international track and field events. While attempting to reach the Olympics, Rysavy was forced out of competition because of injuries. In 1984, after earning a master's degree in engineering the previous year at the Technical University of Prague, he extended his travel visa and never returned to Czechoslovakia.
Barely speaking English, Rysavy spent a year in solitude in a remote part of Eastern Europe. After that, he traveled the world, sleeping on park benches and living on $3 a day, eventually finding himself in Boulder, Colorado, where he worked in a print shop for $3.35 an hour. After saving up $600, he started his own company, Transformational Economy, or Transecon, which sold recycled paper. Rysavy made $100,000 before taxes in his first year of business. Investing $30,000 of that money into a new venture following his strict vegetarian diet, Rysavy created Crystal Market, a natural foods retailer store, which made $2.5 million in sales in its first year. For a man with no business experience from a non-capitalist country, Rysavy was working wonders.
Planning to continue growing his foods business with additional health food markets, Rysavy got sidetracked when one of his neighbors in Boulder decided to sell an office supply store. Rysavy obtained the heavily indebted store in November 1986 for $100 and the assumption of $15,000 in overdue accounts payable. After renaming it Business Express and installing a computer system to track customers and sales, Rysavy realized that he would not be able to make the store successful by remaining a retail outlet. He noticed the successful accounts that a few local companies had with the store that bought supplies in large quantities. Moving quickly away from retail and towards corporate accounts, the company within a year had made $2 million with a pretax margin of 14 percent.
In the fall of 1987, after seeing the success of his corporate strategy, Rysavy hired a researcher to collect material on the office supply industry. By December, Rysavy had a pile of research materials and spent two weeks on the beach in Hawaii wading through all of it. He discovered huge problems in the industry as a whole: thousands of office supply companies were sharing a $100 billion market, split up among local markets and not selling enough volume to get deep discounts from manufacturers. Moreover, with the number of office products being produced growing at an enormous rate, most stores were overburdened with huge, slow-turning inventories.
Watching Staples and Office Depot begin to boom about the same time in the small business and home business retail market, Rysavy decided to try the same thing on a bigger scale by serving large corporations, companies with 100 or more employees, which accounted for $30 billion of the industry annually. In 1988, after selling his health food store to Mike Gilliland for $300,000 (Gilliland went on to make Wild Oats Markets, Inc. into a natural grocery store chain worth $200 million), Rysavy invested it all and managed to leverage the $12.8 million price tag on the office products division of NBI Inc., a Denver-based company with a loss of $1 million on sales of $20 million. Desiring to repeat with NBI the strategy that had worked for his small Boulder store, Rysavy needed to install a computer system to analyze NBI's market and customers. Boyhood friend and computer software developer Pavel Bouska came from Munich to Colorado to help in 1988.
Clearing the Hurdles: 1992-97
In 1992, with Bouska's computer system up and running, the newly named Corporate Express, Inc. (changed from Business Express in 1990) had attained 10 percent operating margins and would reach $65 million in sales by 1995. Striking out for the territories, Rysavy acquired his first companies outside of Colorado. The $31.6 million company acquired Trick & Murray, a $15 million office supply company, merging it with two other acquisitions in the Seattle area. In order to convince Trick & Murray to sell, Rysavy promised in three years to reach sales of $300 million. But at the end of 1992, the company posted revenues of $420 million. A year later, revenues rose to $520 million and the company continued its skyward climb. In 1994, after going public through an initial offering of nine million shares at $7 per share, the company completed six acquisitions in exchange for 1.7 million shares of stock swapped and revenues skyrocketed to $1.15 billion. Among these was the acquisition of New Jersey-based Hanson Office Products, which was purchased from the U.K. firm Hanson PLC.
In 1995, the company moved forcefully into the international market with several foreign acquisitions. With over 14,000 employees in over 500 locations, the company's revenues reached an unprecedented $1.89 billion. Analysts estimated the company would reach $3 billion in the year 2000. They were wrong.
With two acquisitions in 1996, the company became a major player in the distribution of desktop software to corporations, both domestically and internationally. In February, the company acquired Young, a distributor of computer and imaging supplies and accessories, in a 4.4 million share stock swap. In October, Corporate Express acquired France's leading supplier of computer software, the Paris-based company Nimsa, in a 1.1 million share stock swap and $2.3 million in cash. That month, the company also acquired a 51 percent interest in The Chisholm Group in the United Kingdom.
In order to deliver all of its product lines more efficiently, the company created its own delivery system. In March 1996 the company acquired U.S. Delivery Systems, Inc. (USDS), the largest local same-day delivery service in the United States, in a 23.4 million share stock swap. USDS was later renamed Corporate Express Delivery Systems, Inc. (CEDS); subsequently acquired delivery companies were merged into CEDS. Strengthening its domestic delivery infrastructure, the company acquired, in November, United TransNet, Inc. (UTI), the second largest same-day delivery service provider in the United States, in a 6.3 million share stock swap.
In 1996, the company acquired 104 firms, including 46 domestic office product distributors, 32 international office product distributors, and 11 delivery service companies for a total of $241.9 million in cash and approximately 3.6 million shares of stock swapped. Of the 32 international acquisitions, nine were in Canada, seven were in the United Kingdom, five were in Australia, and three were in New Zealand. With five acquisitions in Germany, two in Italy, and one (Nimsa) in France, Corporate Express entered the markets in those countries for the first time. In November, the company purchased the remaining 49 percent interest in The Chisholm Group in a stock swap and with options of up to $3.3 million, pushing the international operations of the company to account for approximately 18 percent of the company's total revenue. Another 1996 acquisition was Buffalo Grove, Illinois-based ASAP Software Express, Inc., a major distributor of software.
From the company's inception, it had been uniquely focused on the development and deployment of innovative technology. In its early years, Corporate Express introduced inventory management systems far more sophisticated than those of many large corporations, systems that could electronically track sales and inventory by item and accurately predict future sales and inventory requirements. The company's belief in the competitive power of technology caused it to routinely reinvest much of its profits into the development of these proprietary information management systems. In 1996, approximately 300 systems architects and engineers were on the payroll of Corporate Express, showing the strength of the company's commitment to ongoing systems development and implementation.
In September, the company unveiled and began to implement a major upgrade to its proprietary global electronic commerce system. The company released ISIS 3.0, a new generation of hardware, software, and networking capabilities. When completed, it would be a dynamic program integrating all facets of the company's processes, organizational structure, systems, and customer service. The three-tier client/server computer architecture was the backbone of the company's Corporate Supplier model, seamlessly integrating the customer's desktop with the company's distribution and service capabilities.
The back end of the system consisted of the actual Corporate Express company infrastructure, controlling product inventory, pricing, contracts, business practices, and delivery. Each customer account was customized by facility, price, supplier, and item. The centralized structure also allowed the consolidation of all customers' orders and invoicing, a capability especially valuable to corporations with multiple locations, as well as potentially providing a direct interface to their general ledger system. In addition, the back end system continually tracked and analyzed cost and demand patterns, allowing the company to forecast optimal reorder times and quantities, enabling the company to turn its inventory well in excess of the industry average and offering the customers a higher level of service.
At the front end, the customer's desktop, the system offered order entry featuring powerful search and display capabilities, rapid price lookup, customized order and payment approval, routing, and a secure connection for electronic commerce, allowing orders to be transmitted via a full range of traditional or electronic connections. The system was available to the customer without charge in a variety of formats, including a customized interface with customers' Intranet facilities. Certain key customers began testing an Internet version of the system in late 1996.
Within five years, the company's revenues had grown from $32 million to a staggering $3.2 billion, a 58 percent increase over 1995 revenues of $1.89 billion, blowing analysts' previous-year estimates away, and the company declared a 50 percent share dividend of its common stock, giving each shareholder an additional share of stock for every two shares held.
In 1997, the company continued its skyrocketing growth rate with more acquisitions. January saw the company acquiring Hermann Marketing, Inc. (HMI), the largest privately held supplier of promotional products to large corporations in the United States, Canada, the United Kingdom, and the Netherlands, in a 4.6 million share stock swap. HMI was soon renamed Corporate Express Promotional Marketing, Inc. Also in January, the company acquired Sofco-Mead, Inc. (SMI), one of the largest suppliers of janitorial and cleaning supplies in the United States, in a 2.6 million share stock swap. The company that same month moved into its new world headquarters in Broomfield, Colorado, which consisted of four interconnected octagons totaling 160,000 square feet of space; located at One Environmental Way, the building reflected Rysavy's commitment to the environment in that all materials for the building were chosen with the environment in mind.
By February, Corporate Express had acquired 15 additional companies, including St. Paul Book and Stationery, Inc. The St. Paul, Minnesota-based company was founded in 1851 and was one of the largest and oldest independent contract stationers in the United States. By June, the company had already acquired 13 additional companies for a total of $24.7 million. Two of the companies were contract stationers in Italy. Katro S.p.A. and Asite S.p.A. were purchased and consolidated into a new 120,000-square-foot distribution center located in Milan. Two other contract stationers were acquired in Cologne and Leipzig, Germany. The remaining nine acquisitions were in North America, including Everything for the Office, a $20 million-a-year contract stationer in Minneapolis, Minnesota.
September brought a definitive merger agreement with Data Documents Incorporated, a leading provider of forms management services and systems and custom business forms to large corporate customers, in a $195 million stock swap. The Omaha, Nebraska-based Data Documents added 85 new locations to the company and it would later be combined with several other acquired companies to form Corporate Express Document & Print Management, Inc.
By mid-1997, the company employed some 27,000 people and operated from approximately 700 locations throughout the world, including 80 distribution centers located in the United States, Canada, Australia, New Zealand, Germany, France, Italy, and the United Kingdom. Customers were able to select desired products and place orders by various means of electronic commerce, telephone, or fax, and receive next-business-day delivery via the company's fleet of over 10,000 delivery vehicles.
Consolidation Difficulties, Loss of Independence: 1998-99
Trouble consolidating the numerous acquisitions began in 1997 and accelerated in 1998, and Corporate Express's earnings started to fall below analysts expectations and its stock price started to sag. The most troubling areas were operations in the United Kingdom and Corporate Express Delivery Systems. The consolidation of the latter was particularly nettlesome as it proved extremely difficult to create a national delivery service from the combination of many small, regionally based firms. Revenues at the delivery unit grew to more than $700 million by 1998, but the operation was losing money. Corporate Express was further troubled by a high debt load that had been incurred as a result of the acquisitions spree.
Under increasing pressure from shareholders, Rysavy began relinquishing power at the company. Robert King, who had been hired as president and COO in 1993, took over the CEO position in September 1998, with Rysavy remaining chairman. Before joining Corporate Express, King had been chief executive of Dallas-based FoxMeyer Health Corporation, a distributor of pharmaceuticals and healthcare products. In December of that year the company launched a major worldwide restructuring involving the closure of 100 offices and the laying off of 1,700 employees, or 6 percent of the global workforce. The company also announced that it was seeking to reduce its ownership interest in the delivery unit or to sell it outright. The restructuring involved a charge of $55 million, and an additional $60 million loss was recorded from the operations of the delivery business, which had been declared a discontinued operation. As a result, Corporate Express reported a net loss for the fiscal year ending in January 1999 of $73.3 million. Revenues for the year totaled $3.75 billion.
By early 1999 the company's stock price had plunged to under $5.50, having traded for as high as $30 in June 1996. Takeover rumors had been swirling for months, and in January 1999 two investment management companies that together held 7.1 percent of Corporate Express's shares, Marlin Management LLC and Brahman Management LLC, urged that Rysavy be ousted from the company board and that a merger with another company be explored. In February Rysavy stepped aside as chairman of the firm but remained on the board as chairman emeritus. A new chairman was not named, but the company said that King would "assume additional executive responsibilities." The company also reiterated its plans to sell the delivery unit and also said that it was seeking to sell its Sofco janitorial supplies subsidiary, which had annual sales of $160 million in fiscal 1998. In June 1999 Corporate Express sold Sofco to U.S. Foodservice for $56 million.
In July 1999 Corporate Express agreed to be bought by Buhrmann N.V., a Dutch firm that owned one of Corporate Express's main U.S. rivals, Chicago-based BT Office Products, and was also involved in paper merchanting and the distribution of graphic systems in Europe. Rysavy and one other director on the seven-person board voted against the merger. Shareholders also filed class-action lawsuits objecting to the deal, but these suits failed to derail the merger or to change the main terms of the transaction, which was completed in October. Buhrmann paid $9.70 in cash per Corporate Express share, or $1.1 billion, and also assumed $1.2 billion in Corporate Express debt. One month prior, Corporate Express sold Corporate Express Delivery Systems to United Shipping & Technology Inc. for about $60 million.
New Life As Subsidiary: Early 21st Century
With the merger, Rysavy's involvement in Corporate Express ended, although the founder managed to insist that the firm remain headquartered in Broomfield. Operating as a wholly owned subsidiary of Buhrmann, Corporate Express absorbed the operations of BT Office Products during 2000, further strengthening its position as the leading business-to-business supplier of office products in the United States. In addition to maintaining its number one position in the Australian market through its ownership of a 52 percent interest in Corporate Express Australia Ltd., Corporate Express, Inc. also bolstered its position in Europe through the amalgamation of Buhrmann office supplies operations there and became the number two player in that market. Already in 2000, under the stewardship of Buhrmann, Corporate Express began growing again through several smaller acquisitions in Europe and Australia, most notably the purchase of ANFA S.A., which marked the company's entrance into the French market. Revenues for 2000 surpassed the $6 billion mark, with $4.7 billion generated in North America and $1.33 billion in Europe and Australia.
Corporate Express continued its resurgent growth in 2001, completing two significant acquisitions. In May the firm purchased the North American office products operations of U.S. Office Products Company in a $172 million transaction. U.S. Office Products had filed for Chapter 11 bankruptcy protection, then began selling off its assets. Based in Washington, D.C., U.S. Office Products was the fifth largest supplier of office products to businesses, generating about $1 billion in sales from 16 distribution centers and more than 90 sales offices. Its focus on serving small and mid-size businesses made for a good fit with Corporate Express's concentration on larger companies. Also in May 2001, Buhrmann announced that it would cut between 1,000 and 1,200 jobs worldwide in response to weakening economic conditions that were resulting in softening sales of office products. In the other acquisition completed in 2001, Buhrmann purchased the office supplies operations of Netherlands-based Samas-Groep N.V. for EUR 321 million. This deal strengthened Corporate Express's position in the Benelux countries, Germany, the United Kingdom, and Ireland. In late 2001 Mark Hoffman was promoted from president to president and CEO of Corporate Express's North American operations following the departure of King, while Rudi de Becker, who had joined the company through the Samas-Groep acquisition, was selected to head up Corporate Express Europe. Revenues increased 11 percent in North America in 2001, reaching $5.22 billion, and in Europe sales increased 13 percent, to $1.5 billion.
Principal Subsidiaries: ASAP Software Express, Inc.; Corporate Express Document & Print Management, Inc.; Corporate Express Promotional Marketing, Inc.; Corporate Express Australia Ltd. (52%); Corporate Express Ges.m.b.H. (Austria); Corporate Express Belgium N.V.; Corporate Express Denmark; ASAP Software S.A.S. (France); Corporate Express France/ANFA S.A.; Corporate Express Deutschland GmbH (Germany); Corporate Express Hungary; Corporate Express Holding (Ireland) Limited; Corporate Express SpA (Italy); Corporate Express Luxembourg/Eugène Hoffmann Sarl; Corporate Express Europe B.V. (Netherlands); Buhrmann Office Products Nederland B.V. (Netherlands); Corporate Express Document Automatisering B.V. (Netherlands); DocVision B.V. (Netherlands); Corporate Express New Zealand Ltd. (52%); Corporate Express Polska Sp.z.o.o. (Poland); Corporate Express Svenska AB (Sweden); Corporate Express Ltd. (U.K.).
Principal Divisions: Corporate Express Imaging & Computer Graphic Supplies.
Principal Competitors: Office Depot, Inc.; Boise Office Solutions; OfficeMax, Inc.; Staples, Inc.; Moore Corporation Limited; Guilbert S.A.
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