Commercial has taken a 51% stake in In2Print, which is based five miles from the BPO group’s Gloucestershire headquarters.
“The benefit for us is that Commercial has a national sales force, whereas we’ve never really had a sales force as such. We’ve always been fortunate in that business comes our way from loyal customers, but the market has changed dramatically in the past few years, so it’s a really good fit for both of us,” said In2Print chairman Pete Cassidy.
According to Commercial Group chief executive Arthur Hindmarch, he had been talking to Cassidy about a possible merger long before the deal was signed earlier this month.
“The logic is very simple: I can make two-plus-two equal five or even six [for In2Print] whereas if it had kept going the way it was then it would only ever equal four,” said Hindmarch.
“I know this sounds very simplistic, but what I mean is that not only can we put direct business through In2Print, but with our national sales force we could grow the business. So in theory, Pete’s 49% of the business will be worth more in a relatively short space of time than his 100% was a few weeks ago.”
Both firms are based in Cheltenham and prior to the deal, Commercial was already £3m-turnover In2Print’s third-largest customer, but according to Hindmarch he expects to be the In2Print’s largest customer within a year.
“We also have around 2,000 customers that are potential print customers, and that’s already starting to have an impact,” he added.
Commercial offers office supplies, IT infrastructure, office design and fit-out, managed print, print consumables and print management among its services and has clients across a broad range of markets, including broadcasting, construction, legal services and banking.
Print currently represents around £1.5m of the 200-staff business’s £40m sales, although Hindmarch expects this to grow to £2m within a month.
“We see print as a massive growth opportunity for us as around 100 of our clients probably spend more than £500,000 a year on it – some substantially more than that,” said Hindmarch.
As well as significantly boosting In2Print’s purchasing power, Cassidy said that the deal would also enable the litho and digital commercial print business to bring wide-format in-house, either through kit acquisitions or via a company acquisition.
“We’ve already got the space to expand here, we’re off to Sign & Digital this week to have a look at what’s available technology-wise,” he said.
He added that the company would also look to expand its 35-strong workforce in future.
According to Hindmarch, the In2Print deal could be the first in a series, hinting that Commercial might be keen to further boost its presence in print through more acquisitions.
“We’ll probably do it through In2Print, but we’ve already spoken to a couple of companies. We think the industry is ripe for consolidation and has been for ages. But our model will be different as we will actually be bringing existing business to the table,” he added.
