Join our daily newsletter At The Bell to receive exclusive market insights
- IVE Group (IGL) acquires Active Display Group and AFI Branding Solutions
- The total consideration for both companies comes to $6.5 million, with the purchases expected to contribute annual revenues of $45 million once integrated
- CEO Matt Aitken says the acquisitions build on IVE’s growth across its existing retail display operations in NSW and Victoria over the past five years
- Shares closed up 6.33 per cent at $1.68 each
IVE Group (IGL) has signed a binding agreement to acquire retail display and third-party logistics (3PL) business Active Display Group, and AFI Branding Solutions.
ADG creates point-of-sale display, print, visual merchandising, retail fit-out and signage, whereas Melbourne-based AFI is known as Australia’s largest fabric signage printer.
The total purchase consideration for both companies clocks in at $6.5 million, with $5.2 million payable on completion and $1.3 million payable as deferred consideration, based on the achievement of agreed revenue targets over a 24-month period.
IGL said that once integrated the acquisitions would likely contribute annual revenues of around $45 million; additional earnings before interest, tax, amortisation and depreciation (EBITDA) of $6.5 million; and net profit after tax of $4 million.
Accordingly, the integration of both businesses is set to begin next month and wrap by June 2022.
IVE’s CEO Matt Aitken said the purchases built on the growth of the company’s existing retail display operations in New South Wales and Victoria over the past five years.
“These acquisitions further strengthen our offering as the leader in the design and production of temporary, semi-permanent and permanent retail display solutions to leading Australian and global brands,” he said.
“ADG’s 3PL division is also a seamless fit for IVE’s already extensive logistics and fulfilment operations across NSW and Victoria.
“Both acquisitions continue the ongoing growth diversifying our revenue streams, and reaffirm the opportunities that present to identify earnings accretive acquisitions as recently foreshadowed at the time of our full-year results in August last year.”
IVE Group will fund the acquisitions through its existing cash reserves, with the deals subject to customary conditions and scheduled for completion by the end of October.
Shares closed up 6.33 per cent at $1.68 each.
