IVE CONFIRMS ACQUISITION OF OVATO
IVE has confirmed that it has completed the acquisition of substantially all of the printing and finishing assets of Ovato for a net purchase consideration of $16m.
As a result of the acquisition, IVE has become the only large scale heat set web offset print producer in Australia. The acquisition will ensure that critical web offset printing capacity remains available to Australia’s largest retailers and publishers, including magazines such as The Economist, Australian Women’s Weekly, Vogue, and catalogue producers such as Woolworths and Aldi.
The Ovato assets acquired by IVE are in good condition, complementary to IVE’s existing production facilities, and will be integrated into IVE’s existing operations over an expected 18 month period.
“IVE has a strong track record of successfully integrating businesses and optimising operating leverage to deliver synergies,” says IVE CEO Matt Aitken. “This acquisition will further strengthen and deepen IVE Group’s already tier 1 customer base, and create an opportunity to cross-sell IVE’s broader diversified offer into the acquired customer-base.”
The integration of the expected $160m of Ovato revenue into IVE’s manufacturing footprint is expected to generate meaningful shareholder value, outlined in the transaction financial metrics provided to the ASX.
IVE executive chairman Geoff Selig said that that the acquisition is expected to create a 21 per cent uplift on IVE’s recently reported FY22 revenue of $760m. Once the integration is complete, the expected $15m increase in underlying net profit after tax (NPAT) would represent a 41 per cent notional increase in underlying NPAT, relative to IVE’s FY23 guidance of $36m.
Under the agreement reached between IVE and the Ovato administrators to acquire the heatset business, only the Ovato WA site in Bibra Lake will stay 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.
