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It’s official! Pacific Print Group buys Vega Press + 2 to create $190m print group – News commentary by Andy McCourt

Thursday, 30 June 2005
By Print 21 Online Article

In an exclusive interview, PPG’s dynamic executive chairman, Geoff Wilding told me, “Yes, Vega Press is now a member of the Pacific Print Group of companies and within the next few days we expect to add another Victorian sheetfed printer and a NSW-based printer to the group.”

The combined turnover of the enlarged PPG will exceed NZ$190 million, Wilding revealed.

Will it stop there? Not if Geoff Wilding realises his vision. “I see no reason why we could not become a $500 million print group, but we’re taking one step at a time and looking for quality opportunities both in Australia and in New Zealand.”

As reported here two weeks ago, PPG has announced to the NZSX its intention to go public. Asked about this, Wilding is forthright, “The PPG board will consider the timing of this in the next two to three weeks.” So, it’s not if, but when. He described the float as ‘initially’ solely on the New Zealand bourse, leaving ASX listing under speculation.

Geoff Wilding makes no pretence about being an expert on printing, he agrees that if he and PPG were described as a kind of ‘merchant bank,’ it would be a fair description. Asked if PPG would enter the web printing sector, he demurs; “I leave the decisions on printing industry-specific matters to the managers who are more qualified than I am to make them. If they come to me with a proposition that makes financial sense, I’ll look at it. He says the same about Print Management Companies, “If PPG’s qualified management says we should buy or start a Print Management Company, it would be looked at on its merits. Three years ago I wrote down a business plan and all we are now doing is executing it.”

An interesting aside is that Wilding’s business plan fits onto one side of a sheet of A3 paper.

As with other PPG acquisitions, Vega Press will be left to manage itself. Quizzed on the leverage of ‘buying power,’ now that he heads up one of ANZ’s largest print groups, Wilding says; “We may end up with a price advantage but I’ll leave it up to the individual operators. We have bought profitable, well-managed businesses so there is no reason why they can’t continue to buy in the way they have in the past.”

So, PPG could not be described as a consolidating type of company, as Geoff Wilding notes, “We rely on the skills and abilities of our managers, we’re investing in people, so we don’t seek to suddenly change the formula.”

Succession planning is vital
Vega Press’ Peter Gude is both excited and delighted at the deal, mostly because ‘from the heart’ it gives an excellent succession path for Vega’s 85 staff, many of whom are only in their 30s and 40s. “The issue of succession planning is critical to so many private print businesses. In the next ten years, probably 80 per cent of privately-owned business will change hands. Being part of PPG is fantastic for Vega’s younger people as they will be the ones who will be developed as future managers during my three to five year contract with PPG.”

Gude said very little will change at Vega Press, roles will remain the same and he will remain ‘at the coal face – a place he clearly relishes having taken Vega from a cluster of factories in Blackburn, Vic., to modern premises in Notting Hill, equipped with three state-of-the-art KBA presses.

“I’ve been in printing for 40 years, “ said Gude, “and have seen acquisitions and take-overs result in the scaling down of businesses, and job losses, as new owners plunder the customer list. But this is different, PPG buy good businesses and leave them to stand alone, providing the financial and corporate expertise. We intend to continue the way we were heading, with the growth and development of Vega Press. I’m particularly pleased for my staff. Maybe there will be supplies buying advantages too, but we won’t know until we talk to other members of PPG.”

Print 21 Online will bring you the news of the next two PPG acquisitions next week.

My call

It’s good for the industry. This is not corporate raiding or a view to asset-stripping; it’s good solid investing in the most important resource any business has – its people. PPG’s is a growth-oriented strategy with wealth-creation for shareholders, employees and business owners alike. When ANZ Private Equity realized its massive 78.6 per cent return on its $3 million seed stake in PPG, the benefactors were probably super funds and ANZ Bank shareholders. Let’s hope this is repeated for the Moms and Pops when PPG floats.

Just as most printers do a poor to average job of promoting themselves (see Malcolm Auld’s article in next week’s Print21 magazine), we also undervalue our human resources. Modern printing personnel are highly skilled, literate, technology-savvy and hard working. There’s much they can teach other industries and PPG’s high value placed on the people in its acquired assets is both refreshing and common-sense.

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