Tactical Solutions employs a network of highly-skilled sales teams, who work with brands and retailers to drive sales and ensure that product is always available in store and ready for purchase.
The firm more than doubled its underlying Ebitda in the 12 months to 31 December 2010, to £2.8m (2009: £1.3m), giving it margins in excess of 24% on its £11.5m turnover.
St Ives, which said the acquisition was in line with its strategy to grow its non-print services, will pay an initial £15m, rising to £24m by 2012 if Tactical hits profit targets.
Patrick Martell, chief executive of St Ives, said: "It's a high-growth business and we're trying to reflect that fact in the way we pay for it."
Following the acquisition, the 320-staff Tactical Solutions will operate as a subsidiary of St Ives and will continue to be managed by the existing management team from its premises in Flintshire.
Martell said: "It's important for us that we buy profitable and successful businesses that have strong management teams. We have no intention of doing anything other than support it."
Lorna Davidson, chief executive of Tactical Solutions, added: "This is great news for the business. St Ives has made the acquisition to help with their overall strategy.
"We will remain independent as our own business unit, nothing will change. We are a strong company."
Tactical Solutions is likely to initially fall in St Ives' commercial products division, although Martell suggested that continued diversification of the group could lead to a change in St Ives' reporting structure.
"We are building up businesses and revenue streams that are not print and at some point we will look at how to report that," he said. "Tactical Solutions supports brands to drive sales at the point of purchase and in that respect SP is the most obvious existing business within the group that it dovetails with."
St Ives' initial £15m payment included £13m in cash, with the balance achieved through a share issue. St Ives will pay an additional £4m if Tactical boosts its underlying Ebitda from £2.8m to £4.5m in 2011.
A second deferred payment of £5m will be made if the firm achieves an underlying Ebitda of £6m in 2012. Both payments will be covered by loan notes, the redemption value of which will be reduced pro rata should the target for the year not be met.
If underlying Ebitda falls below £3m, no deferred consideration will be paid for the year. St Ives has been granted a call option to acquire the remaining 10% of Tactical’s issued share capital, exercisable from August 2013.
Martell said that the acquisition, which follows St Ives' £12.6m purchase of database marketing services company Occam in June 2010, had been turned up by an internal team.
"We found them via a small internal team that is looking at opportunities in line with the strategy we’ve set. We think it is a business with a lot of growth potential. There is some customer crossover, but not much."
