"It's something we've been working on for a long time, so to pull it off is really exciting," said Tony Gill, chief executive of the new company and Encore Direct.

Encore Washington will be officially incorporated on 1 January. Before the deal Encore Direct had a 50% stake in Washington, with the other 50% owned by Washington managing director Dave McGuire.

The "multi-million pound" deal means that Encore and McGuire will hold an equal share in the firm, Washington Encore, which will have sites in York and Washington.

Encore has already moved the bulk of its envelope manufacturing kit to Washington, with the last two lines set to be transferred over Christmas, and 10 key staff will also move. Encore's York site will continue to offer sales, commercial printing, and envelope overprinting.

"We both win because we will be able to take advantage of the synergies, and the stunning new envelope manufacturing plant," said Gill.

The deal follows news last week of the planned 11,000sqm envelope "superplant" at the Washington site, part of a 5.5m investment at the Tyne and Wear plant.

Encore/Washington
- Capacity 70m envelopes per week

- Turnover 35m

- Staff 300