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- IVE (IGL) completes its acquisition of all printing and finishing assets of printing company Ovato for a net purchase consideration of $16 million
- Key assets include printing and finishing equipment and employee entitlements of all transferring employees assumed by the company
- The acquisition is expected to further strengthen and deepen IVE’s tier one customer base and underpin scale and strength of its national letterbox distribution network
- Once integration is complete, the expected $15 million increase in annual underlying NPAT would represent a 41 per cent national increase in underlying NPAT relative to the company’s FY23 guidance of $36 million
- Shares in IVE are up 10.5 per cent to trade at $2.52 at 1:56 pm AEST
IVE (IGL) has completed its acquisition of all printing and finishing assets of printing company Ovato for a net purchase consideration of $16 million.
The purchase consideration was funded from existing facilities and includes transaction costs.
Key assets include printing and finishing equipment, inventory, work in-progress and finished goods, and employee entitlements of all transferring employees assumed by the company.
In addition to the purchase consideration, the company anticipates integration costs of around $15 million and as such, the company intends to treat these integration costs as a significant item for reporting purposes with no impact on underlying earnings.
Further, the company expects a net incremental capital expenditure of $5 million over the expected 18-month integration period which includes services upgrades and preparing the company’s existing sites ahead of the equipment relocation and revenue transfer.
Commenting on the company’s acquisition, IVE CEO Matt Aitken said it will ensure critical heatset web offset (HSWO) manufacturing capacity remains available to Australia’s largest retailers and publishers.
“IVE has a strong track record of successfully integrating businesses and optimising operating leverage to deliver synergies,” he said.
“When fully integrated, the Ovato acquisition is expected to generate meaningful shareholder value, and today results in IVE becoming the only large HSWO print producer in Australia.”
The total cost to acquire and integrate the Ovato assets with the company is expected to be approximately $38 million.
Once integration is complete, the expected $15 million increase in annual underlying net profit after tax (NPAT) would represent a 41 per cent national increase in underlying NPAT relative to the company’s FY23 guidance of $36 million.
Additionally, the acquisition is expected to further strengthen and deepen the company’s tier one customer base, ensure continuity of product and service delivery to existing customers, and underpin the scale and strength of IVE’s national letterbox distribution network.
Shares in IVE were up 10.5 per cent to trade at $2.52 at 1:56 pm AEST.
