Precision, Prime and Proco merge and unveil £100m target
Monday, September 7, 2020
Precision Printing, Prime Group and ProCo have joined forces to create a £45m, 360 staff multisite commercial and online print group with ambitions to nudge £100m sales in three years.
The merger, which closed last Monday (31 August), involved the creation of a new holding company, Precision Proco Group.
The Precision and ProCo businesses will rebrand as Precision Proco, while Prime will retain its name but with new branding.
As well as the three core print businesses, the merger also includes Climb, a Gateshead-based digital marketing and e-commerce platform developer.
Precision Printing CEO Gary Peeling, who becomes CEO of the group, said no outside investment was required to merge the businesses.
According to the three principals, Peeling, ProCo CEO Jon Bailey, who becomes group COO, and Prime managing director Jon Tolley, group CIO, the merger has been in the offing for more than two years following a dinner at the Dscoop HP user group event in Dallas in March 2018.
“We’ve been working on it many different ways [since then], as it turned out we’ve ended up with four businesses merging and 20 shareholders, so it was a little bit of a moving target and then we had a few issues like Brexit, recession and Covid which all slowed things down and made the parameters move a little,” said Peeling.
However, all three stressed that the merger was a long-held ambition driven through strength and was “fundamentally about building a business that thrives and leads the market”.
“We’re all in a good place, don’t get me wrong, times have been tough recently, but we’re all well diversified… and we’ve all been lucky to have PPE, upload and print, and consumer gifts, but the reality is we’re stronger together and will be brilliant together,” said Bailey.
“And that is much easier to do together,” added Peeling. “Particularly in this modern environment, as we start to change business models – and that requires investment,” said Peeling.
One of the instant benefits of the merger is increasing peak capacity and product range at the group’s Where the Trade Buys (WTTB) online print business.
“Scale is important, a cornerstone of that strategy remains utilisation and the first order of business is to utilise what we’ve got within the group effectively, that creates revenue and then we can reinvest in new product areas,” said Peeling.
“We’ve got capacity to grow [the trade business] sustainably, we’ve got the skillset to do it, we’re clearly going to go for it and push it,” added Bailey.
“The other thing to consider is the skillset that side of the business brings to our commercial and corporate sides that are perhaps more traditional. Overlaying that [WTTB] technology over the other parts of the business could be exponential.”
To support the merger, the group has bolstered its leadership team: Dominic Neary joined Precision Printing as CFO just days before lockdown, prior to that he was EU finance director at Just Eat and commercial finance director at MoneySuperMarket. He becomes group CFO and will be joined on the group board by former British Airways executive Philip Osmond, who advised on the merger and becomes non-exec chairman.
“We know about printing things, but these guys bring a few other skills which will be really helpful,” said Peeling.
He added that future M&A could also be part of the growth strategy as “collaboration is in our DNA”.
“If it fits and it makes sense then yes, we’ve got a full program for the next 90 days, but in the future, yes that’s certainly possible.”
Even before the merger was complete the group has already made its first significant investment, spending £1m on relocating Prime to a new 3,700sqm unit in nearby South Normanton and installing a new Kolbus book binding line to target mass customisation of books. The line consists of a Kolbus DA 270 casemaker and Kolbus EMP 513 casing in machine.
The business is currently in the process of moving from its 1,400sqm Nottingham factory. Initially it secured planning consent to extend its existing factory, but with work unable to begin due to lockdown and peak looming it opted for a move instead.
The new unit was already being used by Prime on a short-term lease for the production of visors after it won a £6m order from the Department of Health and Social Care in April.
“It was the perfect location and perfect facility, so we’re taking it on permanently,” said Tolley.
While the three print businesses have a long-established connection, not least being either’s DR facility, Peeling said the fourth pillar of the group was equally important.
Climb specialises in developing front- and back-end e-commerce systems and built the WTTB platform for Precision, and Peeling said that even though it was the smallest part of the group in scale, its inclusion was critical.
“It was imperative that we bring them into the group and invest in the digital IP development because we believe that is what is going to really drive the group forward.
“Not only will they support our group activities, they will also be able to provide e-commerce solutions for group clients."
He added that as brands and businesses scrambled to develop e-commerce platforms to pivot their business models as a result of coronavirus, the new group could offer 360-degree support from web development and e-commerce integration to marketing and promotion.
The group plans to go on a recruitment drive to ramp up Climb’s capacity.
“This is a key part of the strategy really, investing in new technologies which is going to disrupt models is expensive, like capital equipment for printing is expensive, and by pooling our resources in a group we can drive our utilisation, increase our profit generation and invest faster,” said Peeling.
While the merger will create efficiencies, the trio said there would be no reduction in headcount or capacity as the merger was about “aggressive growth”.
Combined, the group’s battery will include 15 digital sheetfed presses, largely HP Indigos, four SRA1 RMGT Ryobi LED-UV presses, including two long perfectors, a high-speed inkjet web, a number of wide-format engines and a raft of finishing kit including mail inserters, laser cutting and a Scodix digital embellishment line.
As the firms all run the same workflow, HP Site Flow, integration, said Peeling, will be seamless which will prove especially useful during peaks.
However, the group will also work on the centres of excellence model by product with, for example, personalisation and mass customisation work being centred on Prime’s new Normanton site.
To support the model, while the three principals have their defined group roles and titles, at an operational level Bailey will focus on Precision Proco, the corporate and commercial business, Peeling will concentrate on WTTB and digital technology and Tolley will centre on Prime and mass customisation.
“As any business in print has, you have areas of focus… or sectors and if you try and focus on all of those areas at once it makes life nigh on impossible, what this has enabled us to do is have business units that are dedicated to areas of excellence [across the group’s sites],” said Tolley.
“We want to shake things up, get things moving and some new, really cool things together,” added Bailey.
“We really believe that by bringing three great companies together we can be brilliant. And we might have a little bit of fun along the way, because that’s no bad thing, having a little bit of fun as well.”
Precision Proco Group
Combined sales £45.5m
Combined staff 360
Manufacturing facilities Dagenham, Gateshead, Normanton, Sheffield and Stansted
Precision Printing (including WTTB)