Management team CEO Simon Smogur, sales director Sam Purchase, and finance director Ben Forsey completed the deal to buy the Swindon-based printer from previous CEO Paul Bradley last month.
The deal achieved Bradley and the management team’s objectives of taking the business forward in an amicable controlled manner with a young ambitious management team, on a strong financial footing.
Smogur has been with ESP for eight years, having joined in January 2015 as chief financial officer. He set up digital factory ESP Smile at the group and became managing director around three years later.
He has been instrumental in working with Bradley to ensure the business was in good shape for the takeover, and for the long-term direction of the business. Purchase joined from ITG three years ago and has helped to position and establish ESP in the correct markets, while Forsey joined 12 months ago in readiness for the MBO and the management team’s plans going forward.
Handel Group is a group company that now owns the majority share of ESP Group. Smogur owns 68% of Handel Group, with Purchase owning 22%, and Forsey owning 10%. Together Handel Group owns 90% of ESP Group, with Bradley – who has now left the business – retaining a 10% share of ESP Group.
“This has been in the planning for a number of years, prior to Covid. It was the main reason I was recruited in the first place,” Smogur told Printweek.
“When you do an MBO you need to ensure a business is on a sound footing – it’s a bit like having a baby or buying a new house, there’s never a right time and you always think of reasons to put it off. And in the last couple of years there’s been quite substantial, world changing reasons, but the business is in a very good position, and the time was right, so it made sense to crack on.”
He added: “Sam’s background is in print management. One aspect of our business is to diversify our client portfolio and obviously recruiting from that side of the fence makes a lot of sense if you’re going to do that.”
The deal was partially funded by debt finance, while the remainder will be paid over a period of several years.
The group is now planning further capital equipment investment, particularly for digital factory ESP Smile, which Smogur said is “growing quite significantly and has been the driving force behind our growth over the last several years”. The group’s other divisions are litho arm ESP Colour and online businesses printmx.co.uk and picsme.co.uk.
“We’re fortunate that we’re locked into energy contracts until March 2024. One of our Q1 targets is to become more self-sustaining in energy generation, and the other is focused more around organisation culture and making sure that if the world does go to the pan that we’re absolutely fine,” said Smogur.
“Assuming all of that is achieved, we’ve then got three main options; one is set up in the USA, which is probably one of the top options at the moment, second is to buy another company in the UK, and the third one is to potentially properly push one of our online businesses.”
The 150-staff group’s turnover will be around £20m for the current financial year, depending on how ESP Smile’s peak period in the gifting sector goes. Turnover split is roughly £12.5m for ESP Colour and £7.5m for ESP Smile.
The group operates out of two leased premises, with 7,400sqm space across the two. They are based around a mile apart from each other, both in Swindon.
The company currently operates two B1 Heidelberg Speedmaster XL 106s and a two-colour perfecting SM 102 and on the digital side a Canon VarioPrint iX inkjet, an HP Indigo 7800, and two Kodak Nexfinity long sheet printers with a large array of finishing equipment.
It also has a large range of wide-format and dye-sublimation equipment dedicated to the gifting market.
