OVATO INTEGRATION ON TRACK AT IVE

All major Ovato clients – many of whom were already IVE clients – were transitioned over to IVE successfully, according to the company, with no major clients going elsewhere. 

During the transition period, which began when the acquisition completed on 13 September,  IVE spent an extra $20m increasing its paper stock holdings to ensure there would be no shortage of supply for its new customers.

All core business functions from Ovato have now been integrated under one leadership structure, including sales, finance, estimating and inventory management.

Key assets from Ovato are being progressively integrated into IVE’s web offset footprint, including its locations in Silverwater and Huntingwood in NSW and Sunshine in Victoria. IVE will be taking five or six of the Ovato webs, and will be retiring three of its own in the process. It is expected to cost IVE around $22m to move presses and finishing equipment and other assets from the Ovato sites. 

Ovato’s first half contribution, from approximately three and a half months, was $60.7m of revenue, $4.4m of EBITDA and $1.6m net profit after tax.

The full integration of what IVE expects to be $160m of revenue into IVE’s manufacturing footprint remains on track for completion by June next year. That will deliver around $28m of EBITDA and $15m of net profit after tax.

The Ovato Geebung and Clayton sites will be exited next month, with Warwick Farm set to be exited in June next year, which will signal the completion of the integration phase. IVE expects to publish full acquisition metrics in FY25.

Ovato was once the biggest print business in Australia and New Zealand. It was originally PMP, spun out of the Rupert Murdoch empire in the 1990s when he was trying to raise as much cash as possible. The billion-dollar business never recovered from the GFC. It merged with the Hannan family’s IPMG seven years ago, but revenues continued their downward spiral, only topped by the share price which collapsed completely.