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It’s on again – PMP & IPMG $120 million merger

Friday, 28 October 2016
By Patrick Howard

The two largest printing companies in the region are set to become one following the buyout of the Hannan-family’s Independent Print Media Group (IPMG) by publicly listed PMP.

The deal in essence is almost an exact replication of the one knocked back by the ACCC in 2001. If successful, the merger as announced on the ASX this morning, radically alters the printing landscape in the region. The two companies print most of Australia’s best-selling magazines as well as many long-run catalogues, a fact that proved the deal breaker for the competition regulator 15 years ago.

According to Rodd Pahl, PMP media spokesman, the ACCC had been informed of the intended merger and would review the deal as part of their normal processes. PMP shareholders also have to tick it off at a meeting scheduled for Friday 16 December. The PMP board of directors has unanimously approved it.

An ACCC spokesperson said they are aware of the transaction and will call for submissions from all interested parties at a public review starting next week.

If it goes ahead, PMP will acquire all of IPMG for $119 million in newly issued shares to give the Hannans up to 37% of the enlarged business with the right to two directors on the board. The company has opened up a $60m line of credit from ANZ to fund working capital requirements and the one-off implementation costs of delivering the synergies. Considerable job losses are likely as the company looks for efficiencies.

According to Peter George, CEO PMP, the integration will deliver cost savings. “We will work closely with our employees and their union to achieve the best possible outcomes for our customers, employees and shareholders.

Peter George, CEO PMP

“PMP and IPMG have taken decisive action to bring about the proposed merger so that we can combine and adapt to the realities of Australia’s print industry in the decade ahead, in the process creating sustainability and value for our customers and shareholders.”

Layoffs are feared as a result of the merger, and the Australian Manufacturing Workers Union is disappointed. “We believe it’s a result of price gouging in the print industry,” said Lorraine Cassin, National Print Division Secretary, AMWU. “Consolidation will mean job losses, and the details are uncertain. Our collective agreements will stand, and we will ensure that our members will be properly represented in this difficult time.”

Under-utilised press and bindery capacity will be rationalised across the many companies and sites, which include Hannanprint, Inprint and Offset Alpine from IPMG along with more than 13 PMP sites across Australia and New Zealand.

Michael Hannan, IPMG Executive Chairman, called the merger “a strategic decision not only for PMP and IPMG, but importantly for all of the customers of both companies as it will drive innovation and efficiency. Customers remain at the heart of our business.

“It is the shared intention of the parties to respond to industry challenges by reducing under-utilised and older press and bindery fleet capacity. It will enable us to bring the best aspects of our firms together to more efficiently deliver world-class services and products.”

 

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