Hexcite continues buy and build strategy
Thursday, September 3, 2020
Hexcite Group has acquired a retail specialist as it looks to create a fully rounded print and services group to serve major bricks-and-mortar retail brands.
The deal for Blaze Signs Holdings completed around 4pm yesterday. As a result, the 250-staff signage specialist will join a stable of retail display and wide-format companies owned by UK private equity group Elaghmore, under its Hexcite umbrella brand.
The business was acquired from PE house Mobeus. Terms were not disclosed.
According to investment director at Elaghmore and Hexcite director Michael Rice, Elaghmore has been monitoring the Blaze group since last year and heads of agreement were signed in the first week of March.
However, while the deal was briefly paused as a result of lockdown, Rice said that it decided to push ahead despite current challenges, partly because its existing business and Blaze all responded well to the crisis but also because “we could see that over the next two, three, four, five years they would be a great addition, a great fit and also a good management fit”.
In its accounts to 31 March 2020, the Blaze group filed an operating profit of £1.7m, up 60% year-on-year, on comparatively static sales of £23m.
The business comprises two companies, sign manufacturer Blaze Signs, which generated around two thirds of its income, and sign maintenance arm Cygnia Maintenance, which made up the remainder.
The manufacturing business operates from two factories in Birmingham and Broadstairs, Kent, which offer a combined 11,000sqm of manufacturing space. The headquarters of Cygnia is at the Broadstairs site.
The firms’ clients included Lloyds Bank, Sainsbury's, Tesco and Vision Express.
While much of its core retail business was impacted by lockdown, the group switched its focus to social distancing signage and Covid secure solutions including screens.
According to Rice, while Blaze slowed down in the early stages of lockdown as a result of pivoting it had “recovered well, Cygnia incredibly well”.
The group’s management team led by CEO Clive Knight, group sales director Chris Abbott, and Cygnia managing director Fraser Burns will remain with the business.
Knight said: “We are delighted to be joining forces with the Hexcite Group businesses and are excited about accelerating the growth and development of Blaze by working closely with numerous like-minded colleagues, who understand the vital importance of innovation, quality and first-class service for our many retail and brand owning customers.”
Rice added: “This is crucial for us, we have good, strong management teams in each of our businesses in Hexcite, we trust them, they’re the guys that deliver for customers on a day-to-day basis, and we back all of our teams to get on with it.”
The Hexcite Group was formed last year by Elaghmore, to bring three of its acquisitions under unified brand and realise more cross-selling opportunities: wide-format printer Gardners, retail display specialist Kesslers and Shopfittings Direct.
With the addition of Blaze, Hexcite will have annual sales in the region of £60m, despite the loss of its Shopfittings Direct business last November.
Rice said the current business trading environment around Covid would not stifle the group’s growth ambitions and it would continue its hunt for bolt-on acquisitions to strengthen the Hexcite offering.
“Truthfully we’re still looking, this is not us done. There are a number of other areas we’re looking at strategically for acquisitions that will extend and round off our [core retail] proposition.”
He added that the current market conditions might also mean that there will be “opportunistic” opportunities.
“We’re keen to see good businesses survive and thrive and if we can be part of that then we will be.
“We fundamentally believe in the strength of our customers and the strength of the proposition we can provide for them, so why stop, why pause?”