Tangent announces £10m Goodprint acquisition
Wednesday, October 24, 2012
Tangent Communications, owner of Printed.com, is set to acquire rival web-to-print business Goodprint UK, for an aggregate consideration of £10.2m in a deal that represents a "step change" for the business.
Tangent will use a £10m share issue, comprising 100m shares priced at 10p, to part-fund the acquisition, pay £780,000 in related costs and to expand its enlarged online business.
The total consideration, net of £3.4m cash on Goodprint's balance sheet, will be approximately £6.8m for the £4m-turnover business, which recorded an underlying operating profit of £1.2m for the year ended 30 September 2012.
The Concert Party, comprising Tangent chairman Michael Green, chief executive Timothy Green and executive director Nicholas Green, will acquire 32.6m of the placing shares, taking their combined shareholding to more than 91m shares (33% of the enlarged share capital).
Following completion of the deal, London-headquartered Tangent will immediately gain access to Goodprint's 120,000 customers, its mobile technology, and presence in 17 countries, including Germany, France and the Netherlands.
Part of the proceeds from the placing will be used to "accelerate investment in online growth" for Tangent's Printed.com brand and Goodprint's goodprint.co.uk and pan-European smileprint brands.
Timothy Green said in a statement: "Goodprint will sit alongside the existing printed.com business to create a multi brand web division. Printed.com has seen revenues grow by more than 100% in the six months to the end of August 2012. We believe that the combined company will be a major force in the rapidly growing market of small businesses and consumers who value the convenience online customisation and personalisation offers.
"Through the acquisition, Tangent will gain instant access to an international market since Goodprint already operates in 17 countries, including Germany, France, and the Netherlands. The deal will also boost Tangent's portfolio with access to a greater range of creative templates for marketing materials, over 120,000 new customers across Europe and an immediate presence on mobile.
"This acquisition represents a step change for our business. This industry is expanding and we intend to be amongst the leaders."
Meanwhile, Tangent has also published its interim results for the six months to 31 August 2012, in which turnover rose 9.4% to £12.1m and pre-tax profit rose 2.8% to £964,000. Operating profit was also up marginally, rising 3.4% to £978,000.
The company highlighted rapid growth in Printed.com, backed by a £600,000 advertising spend in the period, as well as margin improvement in its Ravensworth and Tangent On Demand digital print businesses where it was able to raise pricing "without significant impact on customer numbers or revenues".