The acquisition by Communisis tipped as one of two plcs interested in the company was confirmed on Monday (13 May). The 201m turnover group is paying just under 30m in cash and 12.7m in new Communisis shares.
Chief executive David Jones (pictured) said: "The logic is clear. We want to develop Communisis more down this service offering route."
Centurion posted earnings before interest, taxes and amortisation of 3m, and the 42m price tag has left some aghast. Jones described it as "a reasonable price for growth. We are continuing to grow and its the sort of p/e we would expect Communisis to be."
Jones was categoric that Centurion would retain its independence when selecting print suppliers. "They will maintain best-value solutions, a lot of which is through open book accounting. Communisis has a series of specialist manufacturing operations, so it is self-evident if we are the right supplier anyhow," he said.
Jones also assured that print quotes provided to Centurion would "absolutely not" be used to benchmark Communisis own operations.
Centurion managing director Simon Tate said there had been a "very positive reaction" from staff and customers. "Some suppliers are a bit concerned, but we are reassuring them that we remain independent. Our remit is not to fill Communisis presses. We have valued relationships with our DM suppliers, and the last thing we want to do is jeopardise that."
Clients include Sainsburys, Barclaycard and BskyB, and Centurion has a strong record of retaining contracts. The Sainsburys contract is up for renewal.
Centurion expects to benefit from Communisis IT expertise, especially its new C-Store asset management system. "Its a very good system particularly for the contract side, and bolts in very nicely," Tate added.
Centurions founder, Lord Evans of Watford, stands to make 18m from the deal, and other director shareholders have become overnight millionaires. Evans will remain as chairman of Centurion, while Tate and managing director of operations Caroline Smith will join Communisis executive management.
Communisis shares rose by 6p to 177p after the acquisition was announced.
* Centurions publishing business did not form part of the sale.
Reaction to the deal
- "It seems like a natural and logical move for a company like Communisis, which is moving from being a product provider to a service provider" Rival print management company
- "Its quite clever in one sense, moving up the supply chain. The obvious question is over conflict of interest" Printer
- "On the face of it its a lot of money. A lot depends on how Communisis share price does" City insider
- "That is a fabulous price" Printer
Story by Jo Francis
