Blue Star IVE is buying heatset web operations Franklin Web and AIW in a $116m investment.
The surprise move comes just three weeks after rivals PMP and IPMG announced a merger, set to go through early January. IVE says the acquisition marks the company’s expansion into the large format web offset sector and will bolster its current offering to the retail sector.
IVE’s FY16 pro-forma revenue will jump from $382m to $610m. Its EBITDA pre and post forma synergies of the enlarged group is $62.2m and $73.7m respectively, compared to IVE standalone EBITDA of $42.8m
IVE will pay $100m for Franklin and $16m for AIW. Franklin CEO Phil Taylor will continue to run that part of the business. AIW and Franklin will have their assets and business operations consolidated in Victoria. IVE’s Blue Star Display business in Victoria will be integrated with Franklin’s retail display business
Geoff Selig, executive chairman of IVE says, ”The acquisitions of Franklin and AIW build further on IVE’s ongoing diversification strategy which has been effectively executed over the last decade. The combination makes strategic sense for our business, and delivers value for all our stakeholders. We are confident the combination will deliver improved customer outcomes, enhanced returns for our shareholders, and new opportunities for employees.”
Phil Taylor, CEO of Franklin Web says, CEO of Franklin Phil Taylor said: “We are excited to be partnering with IVE for the next phase of our company’s growth. We look forward to working with a company that shares our passion for adding real value to our clients.”
Charles Garrard, Chairman of AIW, says “Industry consolidation in the large format web offset sector is long overdue because of the excess capacity. Despite strong support from our customers and dedicated staff, for which we are grateful, AIW is not immune to the effects of this overcapacity. We believe that a combined IVE, Franklin and AIW operation will be a robust competitor offering a more diverse value proposition for its valued customers.”
Franklin was established in 1936 and in recent years has carved out a reputation as a highly focused profitable business in the catalogue sector.
AIW was established in 2001 at the time as the most advanced heatset printer in Australia. Founder Peter Clarke retired and the business is currently run by his son Richard, with Peter Scanlon of the Scanlon print family the majority owner.
The acquisition of AIW and Franklin by IVE means there are now two main players in the heatset web offset market, IVE and what will be the merged PMP IPMG business.
The diversified IVE Group now comprises Blue Star and three other divisions; IVEO, the managed solutions business; creative, analytics and marketing automation agency Kalido; and fundraising business Pareto.
Blue Star itself has developed rapidly from an offset print business to a broad print services provider including one of the country’s biggest display print operations, a promotional products business, a data driven personalised communications business, a logistics business, as well as heatset, sheetfed and digital printing.
Its Blue Star Web business has just ordered a new $12m manroland Rotoman heatset press, slated for delivery towards the end of next year.
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