DST to sell UK operation

Darryl Danielli
Thursday, June 16, 2016

DST Systems is to sell its US customer communications business and is looking for a buyer for its £165m-turnover UK operation.

The company announced on Tuesday (14 June) that it had entered into a definitive agreement to sell its North American Customer Communications business to US-headquartered financial communications specialist Broadridge Financial Solutions. The deal is valued at $410m (£289m).

Shortly after the sale was announced, UK staff were informed that DST was also looking for a buyer for its UK business.

PrintWeek understands that KPMG has been appointed to advise on the sale of the UK business, the largest UK direct mail printer, but that the process is in its very early stages with no formal timeframe established as yet for expressions of interest.

In the email seen by PrintWeek, DST chairman and chief executive Steve Hooley said: “The sale of the [US] business is an important step in executing our well-defined strategy of focus and growth within our financial and healthcare services segments.

“As a result, we are also currently pursuing the divestiture of our UK Customer Communications business.”

The email went on to say that DST UK chief executive Jeremy Walters would be presenting to the company’s sites in Bristol, Dagenham, Edinburgh, Jarrow, London, Manchester, Nottingham and Peterborough.

In a statement Walters said: “The DST Customer Communications UK business is successful, stable and profitable and over the last 2 years has seen an increase of 17% in the number of communications produced and mailed along with exceptional growth in digital delivery.

“We are one of the UK’s leading and innovative integrated communications providers across a broad number of industries/sectors, and one of a limited number of successful businesses in a tough market. We are confident in our future and will provide more details as we can.”

Walters was unavailable for further comment.

In its most recent accounts to December 2014 the UK operation posted sales of £164.8m and a pre-tax profit £1.8m.

The UK business was created after DST acquired Lateral Group from its founders Nick Dixon, Mike Hunter and Rick Taylor in 2011, a year after it acquired another transactional and marcomms print group Dsicmm. This created, at the time, a circa £150m UK group.

Dixon returned to the business as chief executive three months after selling Lateral to oversee a period of group-wide restructuring and integration. He left a year later.

In the summer of 2014 Dixon set up a new ‘buy and build’ venture, Veriteva, with Taylor. Since then the duo are understood to have looked at a number of businesses, but are yet to make their first acquisition - leading some industry sources to speculate that DST could be a possible target.

Dixon was unavailable for comment at the time of writing.

However, other sources have indicated a number of potential trade buyers could be in the frame and an MBO bid hasn’t been ruled out.

© MA Business Limited 2019. Published by MA Business Limited, St Jude's Church, Dulwich Road, London, SE24 0PB, a company registered in England and Wales no. 06779864. MA Business is part of the Mark Allen Group .