GI Solutions has its eyes set on becoming a £100 million turnover company, and chief executive Patrick Headley says that the acquisition of Eclipse Group takes it a long way there. He reckons that group turnover will increase to £80 million as a result of the deal. With a further acquisition due to complete in the next few weeks, the company will take another stride towards this goal.
“With the consolidation underway in this marketplace, it’s a case of buy or be bought,” says Headley. “We don’t want to be part of someone else’s dream.”
The drive to the £100million goal was part of the strategy as an MBO led by Headley took over GI Solutions in March last year. Discussions began with Eclipse in May, with Headley hoping to complete the two deals in progress simultaneously. As it happened the acquisition of the Kettering business has been completed a few weeks before the second deal.
“Eclipse is a great company and the deal gives us a bigger product range,” he explains. “It also gives us a second site for the disaster recovery that some customers are looking for.”
Eclipse managing director Simon Moore becomes a main board director and will continue to run the Eclipse business. “When GI approached us and asked would we like to sell the business in May last year, it made complete sense from a strategic point of view.”
Eclipse brings significant litho printing capacity, thanks to two Goss M600 web presses and two Heidelberg long perfectors, one with eight Kodak Prosper inkjet heads for inline personalisation. This will fill a gap for the Leicester company which has focused on highly personalised print.
Headley says: “We are great if the need is for personalised product, indeed I would say we are market leaders in terms of anything personalised. But as soon as something needs to be included in the pack, we could not get anywhere near the price. Eclipse gives us that commercial activity.” This covers catalogues for retailers that are shrink wrapped and mailed out, with a personalised letter exhorting a customer to buy something through a website.
The acquisition also includes 4DM, a direct mail business that includes Xerox cut sheet printing, data processing and mailing lines. It had acquired the business in 2011, at which time, Headley says, he had looked at the business, but had been beaten to the nail by Moore.
Now, says Moore, 4DM has reached the point where a round of investment is necessary to enable it to compete and to offer a full white paper solution. It is the closest part of the Eclipse business to GI Solutions and with that investment will be able to stand alongside the Leicester business. Headley says that looking after 4DM will be “my day job”.
“I have always admired Eclipse, the quality they produce and everything about them. It has increased turnover over the current year and increased profitability. We have paid a decent price for a quality company,” he adds.
The deal was supported by HSBC with a due diligence report produced by CLI. It had previously looked at the proposal for YMG to buy The Lettershop Group, so understands the sector. “The bank loved what we had to say,” says Headley. “We can point to the resurgence of mail as a marketing channel to cut through the digital noice, not to where it used to be, but we are seeing intelligent communications. And with Eclipse we can do that.
The task of bringing the two businesses together will include taking best practice from both companies to forge a single culture across the enterprise. “We are going to look at common working practices,” says Headley. “They have a very good MIS and IT set up.”
This task will be helped by management at both businesses coming into frequent contact, even moving between the companies.
Moore reckons that the companies have only 10-15% of customers in common, creating opportunities for cross selling a wider range of services. “I believe that going forward we have the scale in the business which puts us in a strong position,” he says.
Headley remembers when Graphic Inline, the business that developed into GI Solutions, was first set up, the directors were approached by rival business Chorley & Pickersgill. “They wanted us out of the market place,” he explains. That kind of possibility is no longer on the table.
GI Solutions is heading towards a turnover of £100 million, a size which will ensure the security of the business according to chief executive Patrick Headley. The acquisition of Eclipse where Simon Moore will continue to lead the Kettering operation is a key part of the strategy.
No comments to display, be the first! Leave a comment in the box above.