IG Design Group PLC Acquisition of Australian greetings card business (3652R)
September 21 2017 - 2:01AM
UK Regulatory
TIDMIGR
RNS Number : 3652R
IG Design Group PLC
21 September 2017
21 September 2017
IG Design Group PLC
(the "Company" or "Design Group")
Acquisition of a leading Australian greetings card business
IG Design Group plc, one of the world's leading designers,
innovators and manufacturers of celebration, gifting, stationery
and creative play products, is pleased to announce that it has
signed a contract to acquire the trade and certain assets of Biscay
Greetings Pty Limited, a leading greetings card and paper products
business based in Australia. Completion will take place on 8
January 2018.
The acquisition, to be made through Design Group's Australian
Joint Venture Artwrap, will be satisfied by a cash consideration of
AUD9m (GBP5.5m) using local debt facilities. Stock and fixed assets
acquired are estimated at a market value of AUD5.0m (GBP3.1m) with
the balance of the consideration to be treated as intangible assets
and goodwill. The consideration represents 2.7x EBITDA for the year
ended 30 June 2017 although an injection of working capital of up
to AUD3m (GBP1.8m) will also be required.
Biscay provides greetings cards and related products to an
extensive base of almost 2,000 customers through regional,
wholesale, and independent retail channels across Australia and New
Zealand. With an established and strong reputation for design and
excellence in product and customer service that complements the
existing attributes of Design Group Australia, this acquisition
provides opportunities for even greater engagement and
cross-selling with all key National and Independent retailers
throughout Australia and New Zealand.
In the year to 30 June 2017 the business generated sales of
AUD13.4m with an operating profit before tax of AUD2.9m. The total
transaction and restructuring costs are estimated to be AUD0.6m
(GBP0.4m) which will be treated as exceptional costs. While of
negligible impact to underlying earnings in 2017/18 due to the
timing of completion, the acquisition will be earnings accretive
from the next financial year underpinned by synergies in sourcing,
design and logistics net of amortization of intangible assets.
Commenting on the acquisition, Paul Fineman, Chief Executive,
said:
"This acquisition complements Design Group's existing operations
in Australia and will approximately double the Group's already
strong share in the value channel of the greetings card market
there, providing cross selling opportunities and thus an even more
compelling proposition to existing and new customers. It will add
to our capabilities in this growing and higher margin category for
Design Group as well as further diversifying the Group
geographically.
"Our decision to pursue this acquisition follows a recently
announced record year for Design Group, which included a
significant contract win in Australia. This is a further
illustration of how we are delivering on our stated strategy, with
carefully considered acquisitions across geography, channel or
category, complementing the Group's strong organic growth."
This announcement contains inside information
- Ends -
For further information, please contact:
IG Design Group plc Tel: 0152 588 7310
Paul Fineman, Chief Executive
Anthony Lawrinson, Chief Financial Officer
Cenkos Securities plc Tel: 0207 397 8900
Bobbie Hilliam
Alex Aylen
Alma PR Tel: 020 8004 4217
Josh Royston
Rebecca Sanders-Hewett
Susie Hudson
This information is provided by RNS
The company news service from the London Stock Exchange
END
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