GI buys Eclipse and creates £80m group
Wednesday, February 8, 2017
GI Solutions Group has bought Eclipse Web, which includes Eclipse Colour, Eclipse 4DM and Direct Link, in a deal that creates a circa £80m print powerhouse.
The deal completed today (8 February).
The two groups have been in talks since last May, after GI Solutions chief executive Patrick Headley approached Eclipse managing director Simon Moore to explore the possibility of acquiring the Eclipse businesses: £28m turnover commercial printer Eclipse Colour, £10m DM specialist Eclipse 4DM and £5.5m marketing and campaign agency Direct Link.
“The reason behind that conversation was very simple: just look at the landscape in our sector, the consolidation going on with YM Group buying TLG, Adare and all its M&A activity,” said GI Solutions Group chief executive Patrick Headley.
“It’s very apparent that we were getting into a position where we were either going to buy or be bought. And I was equally conscious that we offered a fairly narrow footprint and I wanted to make that broader, and also implement some very robust disaster recovery. I knew Simon and Eclipse by reputation and I just thought: why not have a conversation.”
The two companies are 38 miles apart, with GI based in Leicester and the Eclipse businesses in Kettering.
Following the deal Moore will join the main board of GI and have a “significant” shareholding in the enlarged group. He will continue to head up the Eclipse Colour and Direct Link businesses.
According to Moore the sale to GI was attractive on a number of levels, not least because GI has invested heavily in recent years on high-speed inkjet web technology, as part of its litho replacement strategy.
“We were aware of what was going on within GI and to get to where they are as a business, in terms of digital evolution, that was going to take us [Eclipse 4DM] a long time. So I could see that the combined entity ticked lots of boxes.
“It just seemed a very natural fit strategically, and from my point of view culturally it worked too: the reputation of GI, the people in the business and its locality – all worked well.”
According to Headley and Moore, the deal, which both described as one of the worst kept secrets in print, has been universally welcomed by clients and suppliers.
“Everyone is very positive and excited by it; in terms of the enlarged capabilities we’ll be able to offer,” said Moore.
The former Eclipse companies will continue at their existing Kettering sites and under their current branding. Although the branding may evolve over time.
However, Headley stressed that the Eclipse operations were all successful businesses in their own rights, and the key driver of the deal was to use the obvious synergies to fuel growth, not strip out costs.
“There’s a lot we can learn from Simon and what he’s done at Eclipse and vice versa, so this is incredibly exciting for both businesses,” said Headley.
The deal was backed by HSBC, with additional finance provided by Toscafund.
“They basically supported an enlarged acquisition, which included Eclipse and, we hope, another acquisition in a few months time,” said Headley.
He hinted that the next acquisition could propel the group past the £100m turnover mark.
The Eclipse purchase follows Headley leading an MBO at the £34.5m turnover business in March 2016, since when the company has invested heavily in high-speed inkjet technology as part of a litho replacement strategy.
Following the Eclipse deal, Headley remains the largest single shareholder in the business – outside of the combined shareholding of the three directors of former majority shareholder private equity firm Grove Industries, who personally invested in the Headley-led MBO.
Pre-empting the deal, GI appointed Sotos Constantinides as its new chief finance officer in December. He was previously CFO at £80m turnover IT services group Stone.