The $500m turnover CPI will join Australian mid-size merchant Focus Paper and New Zealand’s biggest merchant BJ Ball in Maui’s PagePack portfolio. Together they will challenge the largest paper merchant in Australasia, the $700m PaperlinX business, for top spot. PagePack, under the leadership of BJ Ball CEO Andrew Bull is likely to adopt an aggressive approach to market. Maui became the majority owner of BJ Ball early last year, with Ball then buying Focus in November.
The Maui deal brings several of CPI’s former owners and managers back into the CPI sphere, with former CPI Group CEO and current Focus Paper managing director Ian Harry chief among them. Harry and several other former CPI managers formed Focus Paper when they left CPI earlier in the decade.
Long-suffering CPI shareholders are likely to snap up the Maui deal, with the all cash offer of $0.45 per share representing a 32.4 per cent premium to CPI’s closing share price last Friday of $0.34, and a whopping 61.1 per cent premium to CPI’s six month volume weighted average price of $0.28.
CPI has endured a difficult decade, profits have been hard to come by and market size diminished as the local print industry underwent rapid shrinkage over the past two years. It has also taken some major hits from bankrupt printers, including Paul Canty’s Quality Group, it owed CPI some $3m when it went down last July, which wiped out CPI’s profit for the year. CPI is still trying to establish whether it has some claim the funds realised from Canty’s Sydney mansion, which was repossessed and sold by the bank.
CPI offloaded most of its graphics division last year, including the marquee Komori press agency, with Ferrostaal taking most of its agencies for an undisclosed sum, although Australian Printer understands there wasn’t a great deal of cash involved in the deal. CPI kept its HP Scitex agency. CPI originally bought its graphics division from Swiss ink manufacturer Sicpa on April 1, 1998, for $85m.
Maui now becomes the fourth New Zealand private equity fund to invest in the Trans Tasman print industry, following Gresham, which owns sheetfed print group Geon, Champ, which owns web and sheetfed business Blue Star, and Opus, which owns various sheetfed, digital and wide format businesses.
Many in the industry remain puzzled about the returns that can be achieved by the funds, with Gresham’s Geon and Champ’s Blue Star in particular having to adapt their original business plans in the light of the GFC, although Opus with its niche market approach has fared much better than the other two.
PagePack says that the Maui Capital investment funds seek to make and manage long-term investments in Australasian businesses, including within the fine paper and packaging industry. A company statement says, “PagePack is now seeking to acquire CPI as part of the Group’s ongoing commitment and participation in the growth of their business in this industry.”
The CPI shareholder meeting to vote on the scheme is expected to be held in April.
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