London-based print marketing communications business Paperhat Group has acquired the Manchester-based digital agency CTI Digital for an undisclosed sum.
The acquisition, which completed before Christmas, follows the acquisitions of Grebot Donnelly Associates also in 2014, FTP Digital and Reputation by Design in 2012, Consorcio Group in 2011, and Pressing Matters in 2005.
Excluding Pressing Matters, Paperhat has spent £5.5m on acquisitions since appointing former O2O chief executive Ray Peck as chairman and embarking on a "buy-and-build strategy" in early 2011.
Paperhat chief executive Tim Peppiatt said that the group still had one more item on its list of "must-haves", which also included studio services and digital, but that beyond that the firm would continue to be interested in "anything in the creative services, consulting or spend management space".
"There are certain must haves – everyone wants to be in the digital space – but we've got desires to be in a slightly wider range than some others in our sector," said Peppiatt, adding that the group's acquisitions were largely client-driven.
"It comes from us asking, 'if we were to support you in anything else, what would that be?' and from customers coming to us and saying, 'you've done a report on this, could you deliver that for us?'."
Paperhat's latest acquisition, Manchester-based CTI Digital, specialises in Drupal-based site builds and Magento e-commerce platform applications, and offers services ranging from design and digital marketing, to CMS, mobile sites and web apps.
Peppiatt said that the main thing that attracted him to the business though was the people. "They're very smart, very innovative and very focused and we had a genuine business need – we'd already been working with them on a couple of projects for the past eight months and it was a natural progression because we have clients that they wanted access to and vice versa."
CTI employs around 60 staff full-time (excluding freelancers) and is expected to turnover around £4m this year. The company's London staff have moved into Paperhat Group's Covent Garden head office, but there are no plans to relocate CTI's Manchester production hub.
Peppiatt said: "One of the most exciting things about CTI is that all of the managers in the group are excited by this happening and their pipeline has increased by about 20% because of it.
"I've been told that Paperhat is becoming a destination for innovative businesses because they know that they will get access to a bigger client pool and they will be treated as an equal partner."
Nick Rhind, chief executive of CTI Digital, added: "Paperhat Group’s proposition was extremely strong as it enabled us to continue to scale and service our clients and keep improving on the digital services we’re providing.
"Their management team has the same mindset as ours when it comes to working collaboratively with clients and they also have similar ambitions to us. This deal is a great natural progression for us."
Peppiatt said that he was currently in negotiations with three other companies and would "probably look at a dozen businesses this year" but added that there was "no deal fever" at Paperhat and that the company was not interested in simply buying turnover.
"We're very selective – 95% of what we look at won't happen – but all of our acquisitions have grown this year in size and profitability," he said. "If you look at the M&A we've done over the past two years you could say it's been a little bit slow but the really good companies out there aren't waiting around for you to come and talk to them – they aren't for sale, so that can be a difficult conversation to have."