Wyndeham Acquires Pre-Press Specialist

Wyndeham Press Group plc, the UK specialist magazines, commercial literature and direct mail printer has acquired pre-press and print process specialist Graphic Facilities Group.

Wyndeham Press Group plc, the UK specialist magazines, commercial literature and direct mail printer has acquired pre-press and print process specialist Graphic Facilities Group.

The deal was been sealed with an initial consideration of ?4.62 million, comprising ?1.9 million in cash and the future issue to the vendors of 2,307,692 new ordinary shares.

In addition, there is a deferred consideration of up to ?1.3 million, subject to Graphic Facilities attaining certain profit targets for its financial year to June 30 2004.

The acquisition is expected to be earnings enhancing in the year to March 31 2005.

Graphic Facilities is a fast growing collective of highly specialised skills in digital pre-press, handling all stages of the process from design, photography and colour management through to final digital files.

It comprises of Graphics - London, Graphics - Kent, Kestrel and Masterpiece.

In the year to June 30 2003, had a turnover of ?15.7 million and pre-tax profits of approximately ?1.1 million, after adjusting for non-recurring items.

The net assets on acquisition are warranted to be not less than ?2.2 million.

The addition of Graphics Facilities, which complements Wyndeham Argent, the group's existing pre-press business, creates the UK's largest specialist pre-press operation and reinforces the group's capabilities as a true full service provider from initial design to delivery of the final printed product, believes Wyndeham.

In particular, the group will benefit from the specialised practices of Graphic Facilities, and will be able to increase the diversity, flexibility and security of its offering to customers.

With its capability in digital asset management, an increasingly important service for clients, this reinforces Wyndeham's position as the market leader in innovation, it said.

In addition to the group's existing magazines, commercial literature and direct mail print markets, Graphics Facilities also serves the packaging market.

As it will be rebranded and fully integrated into the recently realigned Wyndeham Group structure, this provides further opportunities for cross selling through the centralised sales organisation.

In connection with the acquisition, Wyndeham has placed with institutional investors 3,636,500 new ordinary shares at 110p per share to raise approximately ?4 million.

The net proceeds will be used to fund the initial cash consideration, the costs of the acquisition, together with any deferred consideration payable and will provide an additional ?600,000 of working capital for the business, which in the short term will reduce the group's net indebtedness.

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