ASX-listed print behemoth IVE Group had doubled-down on its belief in Retail POP, Signage, Event graphics and textile print by signing a binding agreement to acquire 100% of Active Display Group and 100% of its subsidiary AFI Branding Solutions. The AUD$6.5 million spend will also add around $6.5 million of EBITDA to IVE's accounts, with integration of the businesses starting next month.
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Active Display Group was started by industry legend Jeff Gittus in 1985, who sadly and prematurely passed away in 2019. Members of the Gittus family continue to be involved but, since being acquired in 2014 by John Singleton's former ad group STW - which was in turn sold to the world's largest advertising conglomerate WPP - other executives have been in control. WPP's 2020 sales were around AUD$25 billion, with Active Display chief Chris Rollinson also being CFO at WPP AUNZ, which de-listed from the ASX in April this year, having been subsumed totally into the global WPP empire.
The ASX de-listing of WPP AUNZ appears to have catalysed a re-focus, disposing of non-core assets, to be a London-and New York listed global concern with global clientelle.
With the purchase price of AUD$6.5 million - $5.2 million payable upon completion and $1.3 million deferred over 24 months subject to the achievement of agreed revenue targets, IVE appears to be getting a real bargain, as it anticipates an extra $45 million in revenues and $6.5 in EBITDA - a very low x1 multiple. As the businesses are integrated into the IVE structure, further economies of scale are sure to be achieved. Active recently installed two ultra high-productivity Inca Digital (a subsidiary of SCREEN GA) X3 flatbed printers with robotic media handling, supplied by Fujifilm.
The deal includes Active 3PL (formerly Markitforce) - an all-important logistics and fulfillment operation for the storage and distribution of POP and fit-out assets nationally.
While the agreement is due to complete by the end of October, integration of the newly-acquired by IVE businesses is expected to to take until the end of the financial year, June 30th 2022.
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IVE Group, under Executive Chairman Geoff Selig and CEO Matt Aitken, has a track record of shrewd acquisitions including Salmat's former distribution business. The company posted sales of AUD$656 million and net profits of over $30 million for FY2021 and is funding the Active and AFI Branding purchases from cash reserves.
IVE (as BlueStar) invested in POP displays once before when it bought STI Lilyfield in 2014 from its German owners after its none-too-successful foray into the Australian market. Prior to that, under the Hammond family, Lilyfield Printing was a very successful oversize offset printer, with Australia's only Heidelberg CutStar installation, giving web-feed to otherwise sheet offset machines.
Where will IVE invest next? It's anyone's guess but the Group is racing towards the $1 billion in sales post - a position only previously occupied by PMP - now called Ovato.
Ovato shares have flatlined at around .02 of a cent on the ASX. IVE Group is at around $1.68 and listed as a 'strong buy' by analysts, who are 78% bullish.
|Active's Inca Digital X3 with ABB robotics pictured in 2018 at the company's open house.|