Intoprint UK is the latest North East printer to attract funding from a turnaround fund that invests in SMEs to boost their profit and capacity.
In January, Seneca signed a deal with Sheffield-based Whitesprint, which saw the investment specialist acquire around a 50% shareholding in the business. This was followed in February by a similar agreement with Doncaster-based print company Askews.
Intoprint UK has now become the latest investment for Seneca, which is targeting print companies in the same locality with an annual turnover of £1m-£5m that are struggling in the economic climate. The Ecclesfield-based litho and digital printer signed over a 50% stake in return for the investment.
Seneca Investments, which is headed by corporate restructuring specialists Melanie Hird and Patrick Bywater, invests funds in struggling businesses in various industries on behalf of private clients with the aim of turning them around and selling for a profit within five years.
The equity investor provides loans in return for stakes of between 40% and 60%, and works with management teams to create business strategies for each business in its portfolio with the aim of boosting profitability.
Yorkshire-born Bywater said Whitesprint had already boosted capacity enough to warrant recruiting seven new staff. He explained that a key to the success of the companies in which he invests is working together to develop supply agreements.
"The printing industry is struggling and volumes are falling but there is good opportunity to see whether some of these firms have the potential to consolidate or share capabilities with similar businesses in the area.
"We want to make a group of strong and profitable printers here, providing a good range of services. In each company we will focus on increasing sales by offering out capabilities to common customers and make production efficient by ensuring that we aren't duplicating," he added.
Bywater said it was vital for each company to retain autonomy but that they must work together to strike mutually beneficial deals.
Seneca Investments’ strategy typically aims to create profit within the first year, invest in the second, build on profit in the third and market to sell, either back to the firm or to new buyers, in years four and five.
Bywater said he planned to continue a buy and build policy in the print industry, building on Seneca's current portfolio of printers with the possibility of expanding into packaging. And although his focus is mainly on Yorkshire, he said he would consider looking elsewhere for companies that were interested.
"We want print companies that may be struggling just because of the market and are looking for a new way forward to help them become profitable," Bywater explained.
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