Paragon makes major DM move with DST buy

Jo Francis
Thursday, May 4, 2017

Paragon Group has acquired DST’s UK Customer Communications business – the country’s biggest producer of direct marketing print – for an undisclosed sum.

DST UK was put up for sale by its US-headquartered parent DST Systems last summer as part of a strategic shift in its operations. Two months ago the group said that the sale was being handled by the DST UK management team, and that it hoped to complete a deal by the summer.

The deal with Paragon was confirmed by DST Systems in a stock exchange filing this morning. In a statement, Paragon said that the DST Customer Communications operations would be combined with its existing Document & Marketing Services businesses in Sunderland and Rotherham to create a new division, Paragon Customer Communications.

The terms of the deal were not disclosed.

The new division will have UK sales of more than £200m, and will employ circa 1,800 staff across 10 sites. Jeremy Walters, the former chief executive of DST UK, becomes CEO of the enlarged operation.

He described it as “a fantastic opportunity for everyone in the business, from all sides”.

“We look forward to working together in the exciting and dynamic Paragon environment. Paragon Group is a strong, ambitious and growing company which is committed to the customer communications sector.”

Walters said the news had been greeted with a positive reaction from customers and employees.

The move marks a departure for Paragon Group, which has made something of a specialty in picking up distressed businesses and turning them around, whereas the DST UK operation was not a distress purchase.

Paragon Group chief operating officer Seán Shine said the DST business was “perfectly complementary” to its existing facilities. “We are purchasing a profitable and well-run business and will provide the ongoing investment and support for its continued success,” he stated.

DST’s UK customer communications business filed sales of £166.2m in 2015, the most recent year for which figures are available. It has offices in London and Manchester, and production sites in Dagenham, Bristol, Nottingham, Jarrow, Peterborough and Edinburgh. The firm is the biggest direct marketing house in the UK and produces circa 19bn envelope inserts, stationery items and litho printed sheets per annum. It also claims a market-leading position in regulatory communications for asset managers.

Paragon Group posted record turnover of €400m (£335m) last year, and chief executive Patrick Crean is understood to have a €1bn sales target in his sights. It now has sales of more than €600m.

The group has also just completed a reverse takeover that will involve merging its Identification & Traceability division into French secure contactless products business Ask, which will be renamed Paragon ID. Ask is listed on the Euronext pan-European stock exchange.

Paragon had previously been mooted as a potential purchaser of the now-defunct Anton Group.


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