St Ives has sold its £106.3m turnover wide-format printing businesses for £6m to the former owner of Aylesford Newsprint.
It is now almost a year since St Ives announced a strategic review of its 'legacy' printing businesses. This morning the group confirmed that it had sold wide-format printing operations SP Group in Redditch and Service Graphics in Chessington, together with sister field marketing firms Tactical Solutions and Flare.
The purchaser is SelmerBridge, a holding company incorporated eleven months ago by French national Landry Kouakou. He is also the managing director of investment company The Martland Holdings, which owned Aylesford Newsprint before it was shut down in 2015.
St Ives said the sale price of £6m was "paid in full in cash at the time of completion", although it is subject to a cash and working capital adjustment. It will use the proceeds to reduce its debt. At the end of last year St Ives chairman Richard Stillwell said the price must be acceptable for a sale to go ahead.
The acquired businesses posted a pre-tax loss of £4.4m on sales of £106.3m in St Ives' last financial year, to 28 July 2017, and had gross assets of £40.8m. SP specialises in point-of-sale while Service Graphics produces a range of large-format graphics and exhibitions stands.
The operations produce work for a number of blue-chip clients, including Marks & Spencer, Unilever, BP, and Chanel. Service Graphics also holds a Royal Warrant.
In a statement, St Ives chief executive Matt Armitage said: "Having taken considerable action over the past year to stabilise the performance of the division, we are pleased to complete the sale as part of a planned disposal process. The sale is in line with the board's stated strategy of focusing on the group's core businesses, in particular those within its higher growth, higher margin Strategic Marketing segment."
No-one from St Ives was available for further comment at the time of writing, and PrintWeek was unable to reach Kouakou.
In January, Marketing Activation managing director Nick Cole said the businesses had "traded well" for the first five months of the year.
An industry source commented: "This is clearly a bargain basement price for a £100m-plus turnover business, and St Ives has managed to 'sell at the bottom'. The write down of goodwill will be eye-watering but it gets it out of the way before their interim results due now."
On its website The Martland Holdings describes itself as "an investment holding company engaged in the acquisition of non-core subsidiaries of large corporations or private companies with sales between £5m and £500m. We are interested in companies domiciled the United Kingdom and France."
The disposed of companies made up the majority of St Ives' Marketing Activation division, but St Ives will retain print management wing St Ives Management Services (SIMS), which has sales of around £47m.
Shares in St Ives rose by 4.9p, or 7.34%, to 71.70 on the news (52-week high: 82.4p, low: 37.5p).
There was no update regarding book wing Clays, which was also part of the strategic review.