Emerging from the recent whirl of web offset news (amazing how many people suddenly want to talk to me about web printers, just fancy that!), it's time to rewind a few weeks to St Ives' acquisition of Tactical Solutions.
This latest buy marks another milestone on the transformational journey at the plc being navigated by the new management team. The first 'new look' acquisition being data management specialist Occam, then Tactical Solutions, closely followed by offloading the loss-making magazine business.
The new reporting structure revealed along with the mag printing disposal will see Occam and Tactical sitting together under a new 'marketing services' division, with everything else coming under 'print'.
St Ives paid £12m for Occam last summer and its results at the half-year didn't exactly inspire, but this was apparently due to group costs wiping out profits. The business is expected to show a meaningful return come the year end.
Meanwhile, have been trying to get my head around what its new sister company Tactical Solutions actually does. I'm informed it carries out a variety of field marketing activities for brands, all aimed at ensuring sales are maximised in-store. Services include checking that products are in stock and displayed on the shelf properly, ensuring current promotions are in place, and point-of-sale compliance (interesting crossover with SP there). It has 350 salespeople on the road and the fact that this team is made up of full-time, highly-trained employees is cited as one of the key differentiators for the business.
It seems to work if Tactical's margins - 24.3% at the EBITDA level on sales of £11.5m according to the firm's expected results for 2010 - are anything to go by. St Ives bosses are of the opinion that this sort of margin can be maintained as the business grows, too "it's not commoditised unlike many of our print operations".
Hence the pretty peppy price, St Ives' initial payment of £15m is more than 5x Tactical's earnings, and it will pay an additional £9m on top of that for its 90% stake if the business meets its profit targets for this year and next.
Come the year-end it will be fascinating to see what percentage of group profit comes from non-print services.
