St Ives Buys Large Format Graphics Firm For GBP18m

St Ives has acquired the whole of the issued share capital of Service Graphics for an initial consideration of GBP18 million.

St Ives has acquired the whole of the issued share capital of Service Graphics for an initial consideration of GBP18 million.

Established in 1961 Service Graphics is a large format graphics producer.

It provides a range of large format digital printing services and offers a consultancy, manufacturing and installation service to the exhibition, retail, creative, live event and leisure sectors.

Particular areas of expertise include the provision of all kinds of display products, modular and custom designed exhibition stands, full service retail systems and giant media production, said St Ives.

Service Graphic's current clients include RBS, Berkeley Homes, BAA and Boots.

Service Graphics has 400 employees in offices and production facilities in London, Bristol, Edenbridge, Edinburgh, Glasgow, Hayes (Middlesex), Nottingham, Salisbury, Skelmersdale and Wales, giving it UK geographic coverage.

Following the acquisition it will continue to be managed by the existing management team as part of the Commercial Products Segment of St Ives under the leadership of Simon Ward.

The acquisition gives both Service Graphics and St Ives the opportunity to cross-sell a wider product range to a broader customer base, added St Ives.

There is minimal product or customer overlap and the technical capabilities and product offerings of the two businesses are complementary.

In the financial year ended December 31 2005, Service Graphics produced profit before interest, amortisation of goodwill and exceptional items of GBP1.768m on turnover of GBP36.075m.

At the date of acquisition, assets are expected to be approximately GBP9 million and the company is being acquired on a debt-free basis.

The consideration for the acquisition consists of an initial GBP18 million, payable in cash on completion, provided that the profit before interest after excluding certain non-recurring expenses for the year ending December 31 this year exceeds GBP2.67 million.

Additional consideration will be paid to certain director shareholders if profit (as defined) exceeds GBP2.97 million for each of the years ending 2007 and 2008.

The cash consideration will be financed out of St Ives' available bank facilities.

Commenting on the announcement, Simon Ward the chief executive of direct and point of sale activities at St Ives, said: "Service Graphics is focused on the delivery of exceptional service and represents a real catch in today's digital market place.

The acquisition significantly extends our digital capabilities and reinforces our strategy of developing further specialist print related services, increasingly through digital technology." Brian Edwards, managing director of St Ives, added: "This acquisition represents a further investment in our digital capabilities.

Digital technology is at the forefront of our future strategy and we now offer the widest range of digital format printing and related services in the UK.".

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