Marketing and development director Janek Szlenkier said the merger was a logical step, combining the strengths of both companies.

Talks had commenced in January and the deal was initially planned to be finalised in March, but negotiations had taken longer than expected.

The merger will allow the new group to compete in what has become a tough market, and provide greater flexibility.

Hendy will bring its B1 and B2 litho printing to the group, while Direct Image will provide its extensive digital capabilities.

The group will comprise HenDi Systems, combining its printing services; HenDi Solutions encompassing the software development businesses; and HenDi Creative, which will include Direct Image's specialist design and editorial facilities.

HenDi Group will be based at Hendy Bank's site in East Road, North London, and will employ around 130 staff.

Szlenkier said that there were no plans for any redundancies at this stage, and although the company had made no decisions on new equipment, he said there was interest in new technology.

Direct Image's John Pulford MBE (pictured left) will become the new chief executive, with David Hendy as chairman.

The new board will also include Julian Banks (pictured right) as sales director, Tim Browning as digital systems director, Szlenkier as marketing and development director and Arthur Gachowski as technical director.

Direct Image was formed in 1992, establishing itself as a City of London digital operation with B2 printing capabilities and a 7.2m turnover in 2003.

Hendy Banks was formed in 1987 by David Hendy and Julian Banks, quickly becoming a leading printer of equity research reports in the City of London.

Story by Andy Scott