The manufacturer of giftwrap, stationery and creative play products has agreed to acquire CSS Industries in an £89.7m deal, which represents a multiple of five times EBITDA.
CSS is headquartered in Philadelphia and is expected to have sales of $346m-$352m (£264m-£268m) in the year ending 31 March 2020, with EBITDA of between $22.1m-$24.1m.
It has a UK operation in Stockport that markets the firm’s sewing pattern brands.
IG Design Group (known as Design Group), has placed two tranches of new shares, at 694p per share, to help fund the deal. The placing was “significantly oversubscribed”.
Chief executive Paul Fineman commented: “As well as doubling the scale of our US business, the combination of CSS and Design Group further strengthens our position as the global leader in consumer gift packaging and establishes us as a major supplier to the creative craft market.”
The deal is also expected to deliver operational and financial synergies of £10m a year, by 2023.
Design Group had sales of £448.4m last year. It sold over 1bn metres of giftwrap, 220m greetings cards, 115m bags and more than 13m creative play products. Its UK facilities are in South Wales, Newport Pagnell and Stapleford.
The group’s share price rose to a 52-week high of 763.6p following the news.
