It paid 145,000 as a mixture of cash and shares, with further cash payments over the next three years dependent on performance.

TripleArc approached ControlP executive chairman Warren Tayler two months ago, according to chief operations officer Jason Cromack. Tayler said the process "speeded up" as problems at Printchannel emerged.

"The merger will boost home-grown UK products, security and long-term investment," added Tayler.

Both firms print e-commerce products will be combined for printers, print brokers and corporates.

"TripleArc and ControlP came up against each other in the market and there was a lot of confusion about the products," said Tayler.

The new firm will employ 26 staff and be based in TripleArcs Marylebone offices. Documedia will sell the entire TripleArc product range to its clients.

Both firms said customers had reacted positively to the news. "ControlP customers are interested in TripleArcs JDF-based tools," said ControlP general manager Daniel Emerson.

Until now neither ControlP nor TripleArc have made a profit. "Were moving towards profitability, [and] the acquisition makes this possible," said Cromack.

TripleArc also announced a loss of 1.26m, before amortisation of goodwill from the gl2 acquisition and share option compensation expenses, for the six months ended 30 June. Sales were 2.6m.

The firm said it expected results to pick up in both its software and print management divisions in the second half of the year.

New contracts picked up by gl2 include DFS, The Laurel Pub Company and
M&C Saatchi arm LIDA.

Story by Barney Cox