BJ Ball rolls up CPI in paper industry shakeup

Andrew Bull leads New Zealand-based PagePack Group bid to become the second largest paper merchant in the region.

The all cash takeover bid values CPI at $62.3 million and following shareholder and regulatory approval will complete in April 2011. The board of directors of CPI has unanimously approved the deal.

The takeover comes hard on the heels of BJ Ball’s takeover of Focus Paper before Christmas. It represents the culmination of a strategy by BJ Ball CEO, Andrew Bull, of becoming a defining player in the region. The wheels were set in motion with the entry of Maui Capital as the majority owner of BJ Ball last year.

The emergence of the new trans–Tasman group throws down the gauntlet to PaperlinX. The new entity has the capacity, connections and now the wide-spread reach to challenge the incumbent to be the largest paper merchant in Australasia. A close relationship with Nippon Paper Group, owner of the sole remaining local fine paper producer, Australian Paper, gives it an undoubted edge.

The deal at 45 cents per share, a 32.4% premium on its share price of last Friday, represents the best possible outcome for the beleaguered shareholders of CPI, which has struggled in recent years to provide a decent return. In the recent past it went from being a focused paper merchant to becoming a full-service graphic arts machinery and consumables supplier. Subsequently it shed its machinery division to Ferrostaal, inlcuding the flagship Komori press line, only holding on to the HP Scitex agency and such digital printing finishing brands as Plockmatic. It also has a substantial ink supply business.