The deal was completed yesterday (16 June), with the purchase made on a going concern basis.
“When we looked at the business we thought it would be a tremendous shame if it did go into administration because it would lose all the positivity around its people and clients, so we took the decision that if we were going to do it, it had to be a solvent sale,” said Jeremy Walters, CEO of Paragon Customer Communications (CC).
Paragon has been “supporting” the business for the past eight weeks while the complicated deal was structured.
142 jobs will be secured as a result of the takeover.
“It’s a fantastic workforce, I can’t talk about them highly enough. One of the reasons we stuck with this acquisition was the people, both the people and the customers showed tremendous loyalty,” said Walters.
Lettershop had sales of £19.7m in the year to 31 May 2020, and made an operating profit of £214,645.
It will become part of the circa-£440m turnover Paragon CC division, with the business rebranded Lettershop Group a Paragon Company.
The Leeds business specialises in complex personalised direct marketing products. In recent years it has moved into a new business area with the development of the Ecomlr, a paper-based, recyclable packaging product targeted at e-commerce companies. Ecomlr uses Henkel’s Epix barrier protection technology, and is viewed as a key growth area for the business.
Walters said that Lettershop’s reputation for innovation in direct marketing combined with its new environmentally friendly, recyclable packaging business made it especially attractive in terms of the diversification opportunities across the wider Paragon CC business.
Lettershop will be run day-to-day by the existing local management, overseen by Paragon CC chief operating officer Vincent Gidley.
Printweek understands that Lettershop director Alistair Ezzy will remain with the greater Paragon business in a new role.
Lettershop’s sister marketing agency business Go Direct Marketing, which had sales of £4.7m, was also acquired by Paragon yesterday but was immediately sold on to its former owner Adrian Scott, and will revert to being an independent operation.
The buy is Paragon’s fourth acquisition of 2022. The overall Paragon Group has sales of €1.5bn (£1.27bn) and employs more than 9,000 staff.
“Paragon is committed to its acquisition-led growth strategy. Incorporating TLG will provide us with the opportunity to continue our growth trajectory,” said John Rogers, executive director, corporate development, Paragon Group.
The sale of the two firms means that all of YM Group’s subsidiary companies are now either in administration or under new ownership.
It remains to be seen what will happen to YM Group. YM’s backer Pricoa is now expected to take the necessary steps to tidy up a £51m loose end relating to its loan notes, which sit in YM Group.
