Cimpress inks deal for National Pen

By Max Goldbart, Tuesday 13 December 2016

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Web-to-print giant Cimpress has acquired pen manufacturer and customiser National Pen Company, in a deal worth more than $200m (£158m).

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Keane highlighted the uniqueness of National Pen's capabilities

The deal for the $275m-turnover company is expected to be completed at the end of December, subject to the satisfaction of closing conditions including anti-trust clearance in the US, with more details available on integration plans to be announced with Cimpress’ Q2 results in January 2017.

San Diego-headquartered National Pen was established more than 50 years ago, and is one of the world’s largest customisers of pens and other materials, providing more than a million businesses worldwide with its products. The majority of its revenue comes from writing instruments and it has additional locations in the US, Mexico, France and Ireland. 

Cimpress chief executive Robert Keane said he felt National Pen’s capabilities were so unique that it made sense for Cimpress to invest in them rather than trying to develop the customisation capabilities themselves. 

Keane said: “The company has very strong, market-leading mass customisation and supply-chain capabilities for pens and other writing instruments, and a proven ability to profitably sell these products to small businesses via direct marketing.

“Also, we believe National Pen is an excellent brand with a honed set of go-to-market operations across merchandising, direct marketing, telesales and customer service operations”.

National Pen president and chief executive Peter Kelly said he was “thrilled about the opportunities that joining Cimpress will create for our customers and team members.”

Under the terms of the agreement, Cimpress will acquire 100% of the outstanding equity interests of National Pen for a purchase price of around $218m, subject to customary adjustments for net debt and working capital.

National Pen will retain its name and branding and operate “with a high degree of autonomy”.

Keane added that he would over time like to see National Pen introducing its products to customers of Cimpress’ Vistaprint brand, and would also like to see National Pen’s products exposed to its Mass Customisation Platform (MCP), the tool that grew out of the original Vistaprint business. 

A statement from Cimpress said that it expects that its planned investment will drive value creation that is consistent with its previously articulated merger and acquisition hurdle of 15% internal rate of return (IRR).

The acquisition is Cimpress’ first in 2016 after it made three last year, buying Dundee-based Tradeprint, Austria-based Druck und Handelsgesellschaft and taking a majority stake in France’s Exaprint.

There has also been recent speculation that Cimpress could have another UK acquisition in its sights, although Keane couldn’t comment on any future acquisition activity. 

Last month, Cimpress announced it would not be increasing the prices of its products after it posted a Q1 loss. Q1 revenue for the $1.5bn-turnover group was $443.7m.

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