Paragon snaps up last remaining St Ives print business

By Darryl Danielli, Monday 25 June 2018

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St Ives has completed its exit from print and sold its print management division to Paragon Group for £11m.

jeremy-walters

Walters hailed the SIMS deal as “tremendously positive”

The sale of St Ives Management Services (SIMS) means that the PLC has now divested its entire print portfolio, which had been up for sale since it announced a strategic review of its printing ops last March.

Last month the group sold its £76.5m book printing arm, Clays, to Italian firm Elcograf and in March its £106.3m wide-format wing was bought by SelmerBridge.

Paragon paid £11m for SIMS, leaving a total consideration of £9.5m after costs, which was paid in full in cash on completion.

One M&A expert said: “That really is the cheapest deal I think I’ve ever seen – just about a 2x multiple on last year’s profit – 5x would be standard in this industry. Well done Paragon.”

SIMS had sales of £49.5m in the full year to 28 July 2017, and a pre-tax profit of £5.1m. Its gross assets were £16.1m.

St Ives, which will now be a £163m turnover business focused exclusively on strategic marketing, will use the proceeds of the sale to reduce group debt.

In a statement, St Ives chief executive Matt Armitage thanked the SIMS team for their hard work and wished them success in the future. He added that the sale of its last print business marked “the beginning of an exciting new chapter for St Ives”.

“The group has now transformed from one entirely focused on print to one exclusively focused on higher growth, higher margin Strategic Marketing businesses, with a market leading digital proposition at its core. We look forward to the future with confidence.”

The deal for SIMS is Paragon’s third in 2018, having bought Kingswood iOptus and FT Solutions out of administration earlier this year.

The SIMS business will drop the St Ives moniker and be integrated with the Paragon Customer Communication business by Angus Campbell, change and business integration director at Paragon CC – who was managing director of the SIMS business before joining Paragon in 2015.

Once the integration is complete the business will fall under the remit of Dave Reynolds, Paragon CC managing director Dagenham and London.

While the entire 36-strong SIMS team has transferred to Paragon CC, PrintWeek understands that Nick Cole, who had been heading up the business for St Ives, did not.

The lion’s share of the SIMS staff will relocate to Paragon CCs Finsbury Circus office in London, while staff outside the capital will be able to work from any one of Paragon CC’s 14 UK sites.

The newly acquired business’s production requirements will fall under Paragon CC’s ‘lead supply model’ where it supports its own manufacturing first, unless the clients’ requirements can be better met by a third-party.

Speaking to PrintWeek, Paragon CC chief executive Jeremy Walters hailed the SIMS deal as good news for all concerned.

“It was the part [of St Ives] we really wanted, it complements what we do and our growth plan, and there are some great people there,” he said.

In its statement announcing the sale, St Ives described SIMS as its “legacy print management business”.

However, Walters said: “We don’t see it as legacy, it’s certainly core to what we do and hugely relevant to the print production and communication market. It’s a profitable business, with great people and great clients, what more could we ask?"

SIMS blue chip client roster includes: HSBC, Metro Bank, Royal Mail, Tesco, and Vodafone.
According to Walters, the client list was “one of the many attractions” of the deal, as there was minimal crossover of customers.

While some clients had novation clauses in their contracts triggered by the change of ownership, Walters said: “They were all delighted to come across to Paragon CC.”

He said the deal was “tremendously positive” for Paragon CC and the SIMS team and their clients.

“Because they [clients and staff] both now have a home that truly wants to be in this sector, we’re very passionate about that. This really supports the growth of the company and takes us well past the £240m mark now.”

He added that other acquisitions were on the cards, with several potential deals under the microscope.

Paragon CC is part of the €700m (£616m) turnover Paragon Group and was largely born out of the acquisition of DST’s UK Customer Communications business by the group just over a year ago.

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