The world's largest print group signed a definitive agreement to buy the Huntingdon-based document BPO group on Monday (18 April) for £520m (approx $990m). The all-cash deal is expected to complete this summer.

Donnelley fought off bids from private equity firms Candover and Charterhouse to win the business. "We bought this in an auction it was a remarkable thing," said Angelson.

"We fielded a team, shipped them over to the UK, worked with our UK professional advisers, turned this thing upside down and inside out and we're perfectly satisfied that we have a real jewel here," he added.

Angelson said Astron would be "augmentative" to Donnelley's existing service offering and did not signal the group's intent to move away from its core areas of printing and publishing in the magazine, book, catalogue, financial, retail and telecomms markets.

"We ain't getting out of that business any time soon... The services from Astron are augmentative to our existing services, not at all a substitution for them."

Astron chief executive David Mitchell who is reported to have made 33m from the deal, which is not subject to an earn-out will be staying with the group along with the senior management team.
Angelson said Donnelley "enthusiastically welcomed" Mitchell and his team. "These people are like us. They are hard driving and they get it. They produce results," he said.

Mitchell, who described Donnelley as a "safe harbour for Astron, its clients and its people", formed Astron from three print-related business in 1996 with 5m of VC backing.

Following its reversal into Tactica (formerly part of TSO) in 2000, it embarked upon a series of acquisitions (see Astron history box).
"If you look at the value we've created, we've gone from about a $10m business to a $1bn business in less than 10 years," he said.

The company has been in a twin-track process since February when it appointed bankers to review its options. Had a satisfactory sale not materialised, Mitchell said he was ready to "push the button" on an IPO on Monday (18 April). "We kept all our options open until the last possible minute," he said.

Astron's latest numbers to 31 December 2004, which include a nine-month contribution from Edotech, show an operating profit of £28.2m on sales of £247m. Further details of the deal will be revealed when Donnelley announces its Q1 numbers on 5 May.

Astron history
1996 Astron formed with 5m of VC backing to fund buyout of three print-related businesses, Satellite Press, Orbital Press and Kadocourt
1999 Sales hit £30m through contracts with BA and Bristol & West
2000 Acquires Docusystems travel document management business in Tring. Merges with Tactica in a £92m deal backed by PPM Ventures, taking sales to £100m
2002 Strengthens position in the Irish market with acquisition of Integrated Print Logistics Solutions
2003 Buys three businesses from the BPO division of Hays, giving it call centre, electronic data input and capture services from offices in Poland, India, Sri Lanka and the UK. Sales hit 180m
2004 Buys Edotech for 130m followed by the print and mail division of Experian. Expands presence in US with print management contract for Waterford Wedgwood, and extends BA deal for three years. Mitchell states aim to create a £1bn-turnover business within five years
2005 Embarks on twin-track process after appointing UBS and Citigroup. Is bought by RR Donnelley for £520m ($990m)

Story by Lauretta Roberts