IVE Group to buy Active Display Group & AFI Branding for $6.5m

IVE Group is further expanding into retail display and third-party logistics with the purchase of Active Display Group and AFI Branding Solutions – two companies owned by global communications marketing agency, WPP – for $6.5 million.

Active Display Group is a retail point of sale and visual merchandising company which was founded by Jeff Gittus in 1985. In 2014 it was sold by the Gittus family to marketing agency STW and in 2015 it came under the ownership of global giant WPP following a takeover and now the wheels are in motion for the business to transition to IVE Group.

AFI Branding was half owned by Active Display Group with the other half owned by managing director Glenn Watson. The business was established 30 years ago and has built a solid reputation in the event, exhibition, fabric printing and signage markets. Its acquisition will allow IVE Group to expand into this space.

Both businesses are listed on the WPP AUNZ online company listing. All staff, including senior executives, will be transitioning across to IVE Group as part of the arrangement.

An official statement to the Australian Securities Exchange says IVE Group has signed a binding agreement to purchase the two companies. The total purchase consideration for both Active Display Group and AFI is $6.5 million, the statement says.

This includes $5.2 million payable on completion with $1.3 million of the total payable as deferred consideration based on the achievement of agreed revenue targets over a 24 month period.

The acquisitions are expected to contribute annual revenues of around $45 million, additional EBITDA of $6.5 million and NPAT of $4 million post the full integration of both ADG and AFI into IVE’s existing operations.

In a statement to Sprinter, IVE Group CEO Matt Aitken says the acquisitions will strengthen IVE’s offer as an industry leader in the retail display space.

The timely announcement has also coincided with retail stores opening their doors again and businesses preparing to schedule events.

“These acquisitions strengthen our offer as an industry leader in the design and production of temporary, semi-permanent and permanent retail display solutions to leading Australian and global brands. ADG’s comprehensive 3PL division is also a seamless fit for IVE’s already extensive logistics and fulfilment operations,” Aitken said.

“These acquisitions build further on IVE’s strategic investment and growth in the retail sector over the last five years. We look forward to welcoming the ADG and AFI staff to our business, and showcasing IVE’s diverse value proposition to their customers.”

Active Display Group CEO Steve Voorma welcomed the move.

“This is fantastic news for our clients, and other companies requiring retail display, visual merchandising (store windows), or 3PL services,” Voorma said.

“The combination of ADG and IVE’s existing capabilities will create by far the most sophisticated and advanced retail display offering in the country. From the breadth and depth of our combined capability, right through to our impeccable environmental and sustainability credentials, this expanded retail offering will be unmatched in Australia”.

AFI Branding managing director Glenn Watson, who will remain with IVE in a senior leadership role post-acquisition, said:

“This is an exciting new chapter for AFI Branding and I look forward to joining the talented team at IVE. Over the last 29 years, our team has worked tirelessly to build AFI up into the largest fabric printer in Australia, something we’re very proud of. To enter our 4th decade as part of IVE Group brings with it a host of fresh opportunities and a new platform for industry innovation. AFI brings complementary services to IVE’s already extensive offering, presenting a compelling proposition to its existing 2,800 clients and the wider market,” he said.

This integration will commence in November 2021 and will be completed by June 30, 2022.

IVE Group will be funding the purchase through existing cash reserves.

“Building further on the strong growth over the last five years of our existing retail display operations in both NSW and Victoria, these acquisitions further strengthen our offering as the leader in the design and production of temporary, semi-permanent and permanent retail display solutions to leading Australian and global brands,” IVE Group CEO Matt Aitken said in a statement to the ASX.

“ADG’s 3PL division is also a seamless fit for IVE’s already extensive logistics and fulfilment operations across NSW and Victoria.

“Both acquisitions continue the ongoing growth in diversifying our revenue streams, and reaffirm the opportunities that present to identify earnings accretive acquisitions as recently foreshadowed at the time of our full years results in August this year.”

IVE Group posted a strong result for the FY20 financial year in August and announced it had set aside $30m to $40m to expand with a focus on fibre-based packaging and third party logistics service provision.

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