Ten years ago the suits at Champ and Gresham decided to buy up multiple independent print businesses, roll them up into single organisations, float them on the ASX and ride off into the sunset with their pockets bulging with the proceeds. The strategy left everyone in the industry scratching their heads wondering how exactly the sums would work, given that two dozen print shop owners received way over top dollar for their businesses.
Even without the GFC, the plan was unlikely to succeed, and as it was the financial crisis knocked the stuffing out of the strategy. A few more years teetering on the edge and the dreams finally turned to dust.
One man's ceiling is another's floor though, and some of the original owners enjoyed their own Kerry Packer-Alan Bond moments, after selling for top dollar and buying back for a not much more than a song, notably the Selig family with Blue Star, and Ian Smith and his team with Advance Press in WA. The latter has just won the National Print Awards Judges Award for the best piece of print in the country, congratulations to you all.
Blue Star has set its sights higher, and is now set to go to that IPO, with July 1 the big day. The company has been reinvented since the Wolseley p/e backed-Selig's regained control. It has been acquiring point-of-sale businesses, creative business, mailing businesses, a promotional products business, and its latest restructure saw Blue Star become just one part of Ive, as the group is now known. Blue Star is now split into six distinct divisions. There is no doubt that the management team has been doing a great job to reposition the company and diversify away from straightforward ink on paper
The reaction of the market will be fascinating. Print has long been out of favour with the stockbrokers, however since Peter George took over at PMP its share price has shown that if you get the model right then investors will be prepared to back your business.
Blue Star has a target price of $200m, compared with PMP's current valuation of three quarters of that at just under $150m, which makes PMP seem good value.
The current Ive owners are to retain some 41 per cent of the shares, which will get a tick from the market.
Everyone in print will wish team Selig all the best for July 2.
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.
Sign up to the Sprinter newsletter