UPS Pick-Up For Delivery

U.S. Office Products (Washington, D.C.), the parent company of Mail Boxes Etc. (San Diego), has agreed to sell its subsidiary – with its 4300 retail franchises in 29 countries – to United Postal Services (Atlanta).

MBE offers packaging, parcel shipping, 24-hour mailbox access, copying, printing, faxing, paging, office supplies and other related postal and business products and services to a market consisting primarily of small and home-based businesses and general consumers. It has also granted licenses for marketing business center kiosks to hotels, convention centers, banks and supermarkets. It has been a major customer of UPS.

UPS is, of course, a $29 billion package-delivery company, the largest in the world. This is, however, its first foray into the retail world. MBE retail franchises generate more than $1.5 billion in sales annually. It ships more than 40 million packages a year, about 17 million of those shipped via UPS. The stores will continue to offer shipping through other carriers, such as Federal Express, after the deal closes. And UPS will continue providing services through other pack-and-send chains as well, from its global network of 11,500 authorized shipping outlets.

U.S. Office Products has been debt-ridden, and in January negotiated an amendment to its credit facility to give it more time to negotiate asset sales and reduce debt. For the fiscal six months ended Oct. 28, 2000, the company reported a net loss of $306 million. Its stock was delisted last year from the Nasdaq National Market System; it now trades on the over-the-counter bulletin board.