The deal includes the assets, goodwill and customer base of Remedies, and took effect from yesterday (20 April). “Key sales representative” and former Colorpak employee Shannon Lun will also join Colorpak’s flexo division.
The assets of the Silverwater-based flexographic printer will be moved over to Colorpak’s Sydney facility in the suburb of Regents Park. These include a GIDUE Combat 370BK 8-colour narrow web press, as well as a series of slitters and rewinders.
Colorpak managing director Alex Commins told ProPrint that the company will decommission its Hikari three-colour press to make room for the GIDUE machine. The integration is expected to be completed by the end of the first week of May, as administrators for Remedies finish off the last of Remedies’ existing work for its clients.
“This press will provide Colorpak with the benefit of greater speed and flexibility, as well as allowing us to produce a broader range of flexible materials,” said Colorpak company secretary Stephen Nicholls.
Colorpak will take on Remedies’ client list, which includes Bayer Australia, GlaxoSmithKline, Sigma Pharmaceutical, SCA Hygiene, SSL, Allergan, Pharmacare and Reckitt Benckiser.
Nicholls said the deal would “generate revenues of $1m to $2m per annum and will be EPS accretive in the first 12 months”.
In its half-year results last month, Colorpak said it would contain capital expenditure over 2010 to “less than $1m”.
Commins said the Remedies acquisition doesn’t contravene this target, as it isn’t specifically an equipment purchase.
“It’s coming with a new machine, but that will bring in a new revenue stream,” he said. “So the shareholders should be happy.”
Commins also confirmed that Lun would be the only Remedies employee to be hired by Colorpak.
Remedies Print entered voluntary administration with Ron Dean-Willcocks Insolvency Solutions on 15 March.
Ron Dean Willcocks refused to comment to ProPrint on the sale.
Remedies specialises in sachet, label and foil printing, as well as flexible packaging. The printer’s half-year turnover to December 2009 was around $900,000.
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