IVE Group has reported that the Ovato acquisition, completed on 13 September 2022, remains on track with the integration timetable and expected financial metrics unchanged from those previously announced.
The company said the integration of an estimated $160 million of Ovato revenue into IVE’s manufacturing footprint is due for completion by June 2024. It is expected to increase the group’s underlying annual EBITDA and NPAT by $28 million and $15 million, respectively.
“During the FY H1, all major Ovato customers successfully transitioned to IVE without significant client loss. We increased inventories throughout that period to ensure continuity of supply,” IVE Group CEO Matt Aitken said.
“Staff transitioned over seamlessly, with many stepping into broader leadership roles as we look to complete the integration over the coming 12 months. We are really pleased with the people that have joined our business from Ovato.”
According to Aitken, the expanded business is performing well, meeting all customer expectations. All core business functions within the broader business have been integrated under one leadership structure, including sales finance, estimating and inventory management.
Key assets from Ovato’s Warwick Farm, Geebung and Clayton sites will be integrated into IVE’s existing web offset footprint (Huntingwood and Silverwater in NSW and Sunshine in Vic) over a phased transition period of approximately 18 months.
Around $11 million of revenue was transitioned to existing IVE facilities during the FY23 H1. Operationally, the sites work closely to ensure optimal efficiency is maintained across all production assets.
“The business will progressively realign its operational cost base with revenue. And as it transfers to IVE sites, we continue to work through the integration. I want to assure you that we are right on track, and getting into March 2023, we will have exited Brisbane and Clayton sites accordingly within the timeframe that we stated with all key asset transfers done, and we continue to move at pace through the balance of the key integration milestones,” Aitken said.
“And I’m very confident that we will deliver per the plan we’ve outlined here and communicated to investors in the past, with full integration complete in 2024 and full acquisition metrics delivered from FY25 onwards.”
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