The sale of the company founded by Bob McMillan's father Jim comes as no surprise, as Bob flagged his intentions late last year, but it still marks the end of an era. It catapults Blue Star into number two or possibly even number spot in the domestic sheetfed print industry. IPMG has a bigger turnover, but an unknown amount of that is in heatset and newspaper printing. Blue Star's revenue is now around the $500m mark, which includes its own heatset operation Webstar, and is some $100m more than rival p/e backed group Geon, although both these figures include their New Zealand operations. The biggest commercial printer in the country is of course PMP with a $1.25bn revenue, but these days PMP has no sheetfed printing operations.
The deal means that more than 50 per cent of Australian B1 sheetfed printing capacity now lies in the hands of these three companies, with the largest, Michael Hannan's IPMG, surely a target for both Blue Star and Geon. Hannan has already divested himself of his publishing business, selling out to Rupert Murdoch earlier this year for between $150m-$200m, and with the private equity companies by no means averse to paying top dollar for well run print operations with decent customer lists he may well be tempted to take the money.
With its main production centres in Sydney and Canberra McMillan Print is a pioneering operation in many ways, in fact Bob McMillan himself has been buying up print companies for the last 30 years and integrating them into his business. He virtually invented the vertically integrated print management offer in the Australian market, with his business specialising in managing sophisticated end to end print supply chain solutions for its clients, underpinned by advanced e-commerce capability that delivers a range of online tools direct to clients' desktops. Bob McMillan is also well known for his undisguised distaste for the recent phenomenon of print management companies, and as a leading light in the national print industry his views were carefully noted.
McMillan Printing Group consists of Sydney based McMillan Print and Canberra based Pirion Printing. This acquisition follows the recent purchases by Blue Star of Sydney-based Merritt Madden in November 2004, Melbourne-based Print In Vision in July 2006 and Canberra-based National Capital Printing just three weeks ago. The McMillan purchase is unlikely to be the last for Blue Star, speaking to Australian Printer last month Blue Star chief executive Geoff Selig indicated that a Brisbane print business was on his target list.
Bob McMillan has agreed to remain as a consultant to the expanded Blue Star business and will be an equity holder in the combined group. The remaining members of the McMillan senior management team have entered into long term employment agreements with Blue Star. Similarly Pirion managing director, Richard Gibson, and all members of his senior management team have entered into long term employment agreements with Blue Star.
Geoff Selig says, "Blue Star was keen to continue our active participation in the current rationalisation and ongoing consolidation of the Australasian print communications market. Blue Star has grown strongly over the last five years both organically and through acquisition. The acquisition of the McMillan Printing Group further supports and enhances our value proposition in the market thereby enabling us to better service the evolving needs of our customers with market leading solutions. We continue to seek further complementary acquisition opportunities with the support of our majority shareholder Champ Private Equity."
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