2022: THIS TOWN AIN'T BIG ENOUGH FOR 2 OF US

The country’s two big heatset print businesses became one, with Ovato going into administration and IVE spending $16m to acquire substantially all of the assets of its stricken rival.

One time billion dollar a year business Ovato had been under the pump ever since Peter George left as CEO in 2017. The final year of its existence saw the Hannan family ask suppliers to take a 50 per cent haircut, sell off everything they could, close the New Zealand heatset operation, and finally call in the administrators.

The deal means IVE is the only heatset web printer of note in Australia, with Webstar the main heatset operation in New Zealand. Ovato’s WA site is the only one that will be kept operational.

The seven-web supersite in Warwick Farm, NSW, will operate for around 18 months, enabling IVE to transition the work produced there to its plants in Sydney and Melbourne.

Neither of the two Ovato sheetfed plants, located in Cairns and Auckland, are part of the IVE deal.

Current annual revenues of the Ovato Australia web offset printing operations are estimated to be around $160m. IVE says the acquisition is expected to be accretive in the current financial year. IVE funded the acquisition from its $67m cash reserve.

The deal marked the end of a 30-year story for Ovato, originally spun out of Rupert Murdoch’s empire as PMP when he was desperate for cash, and sees the vision of the seven-web supersite in Warwick Farm, opened to great fanfare just three years ago, turn to dust.

It also marks the final chapter in the 90-year story of the Hannan family’s involvement in print, which saw them develop a powerhouse printing group with both sheetfed and heatset print business. Its merger as IPMG with PMP, however, spelt disaster, with the share price plummeting, $430m worth of losses over the five years, and then seeing the administrators sell the once mighty business to its biggest rival, and for less than the price of one of the Warwick Farm presses.

Australia’s heatset print sector will be largely owned by IVE following the deal. Both major heatset product lines – magazines and catalogues – have been in decline, but still represent a sector worth several hundred million dollars a year.