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The Kiwis are coming, again

Thursday, 11 August 2005
By Print 21 Online Article

The mega-dollar deal is in line with the aggressive Kiwi acquisitions spelt out last October, when Print21 Online reported PPG’s acquisition of Sydney’s Graphic World (Archive search “The Kiwis are coming”), at which time ceo Geoff Wilding told us, “The purchase of Graphic World marks the start of our planned expansion into Australia…”

It appears PPG’s ‘start’ is now out of the blocks with reliable industry sources citing the acquisition of Melbourne sheetfed powerhouse Vega Press. Vega’s Peter Gude could only offer a “no comment” when we called. PPG acquiring Vega is a stellar buy, with three almost-new KBA presses: a Rapida 105 10-colour, a 105 6-colour and a 74 5-colour. Vega is at the top of high quality commercial and advertising print in Victoria and has won many National Print Awards – including silver at last month’s fiesta.

Another Melbourne printer, Keatings is likely to have have also fallen to the Kiwi invaders, and Sydney is abuzz with two further possible acquisitions in NSW. If all the deals go through, the Pacfic Print Group will enter the lists as a major Trans-Tasman player. As the deals are still in process all the major players are avoiding comment, with Wilding currently holidaying in France.

Who is Pacific Print Group?

Formed in 2001 by Geoff Wilding, PPG attracted ANZ Private Equity as its major investor, injecting NZ$3 million into the venture. ANZ’s parent will no doubt be pleased with ANZPE’s announcement in April that it had sold its shares in Pacific Print Group, realizing 4.3 times its original investment of and generating an IRR of a thumping 78.6 per cent.

Wilding, 41, was previously a dotcom wunderkind with his ASX-listed firm CommSoft but, like many other dotcoms, suffered in the 2000 techwreck. He resigned as ceo in 2001, as a director in May 2002 and sold his last stake in 2003. There was talk of a falling out between him and Trevor Kennedy of Ozemail fame, also an equity holder in CommSoft.

Wilding graduated from Auckland University with a science degree, worked in financial consulting and share-broking before forming a private investment company (Transport Investments Ltd) to invest in companies in the road transport industry. Within a few years, Transport Investments was one of the largest road transport groups in New Zealand with some 250 trucks and 450 staff delivering revenues of nearly $72 million.

After a couple of years of buying small printers in New Zealand, it was the merger with the classy Brebner Print that catapulted PPG into the big time. Mark Brebner’s six-branch firm employs 180+ and he is now a PPG board member. Asked to comment on the Vega and Keating acquisitions he demurred, “Sorry, I am unable to offer any comment.”

The October 2004 Graphic World acquisition moved PPG into Australia, as it always said it would and in April 2005, Geoff Wilding told Print21 “…we will be looking further there (Australia) this year.”

But there is much more to this story, PPG is preparing to go public.

On 5th May, Pacific Print Group filed an announcement to the New Zealand Stock Exchange of its intention to become a publicly listed company. PPG is already trading Capital Notes on the NZSX and these currently have a yield of 10.15%. Note holders will have preference in buying shares at a discount of 5%, based on $333 worth of shares for every $1,000 in Notes held. The float will be offered to ‘members of the New Zealand Public.’ In anticipation of the float, trading in PPG Capital Notes soared on the day of this announcement, and again on June 1st, with demand remaining high since. Auckland investment house Forsyth Barr Limited has been appointed lead manager and organizing participant for the NZSX float.

Directors of PPG are listed by the NZSX as, Mark Brebner of Brebner Print, Samford (Sandy) Lee Jnr Maier – a professional company director, Peter West also from Brebner and Geoffrey Brendon Wilding. Chairman is Warwick Whyte, a 22-year print management veteran.

How much did PPG pay and what is the full list of acquisitions? Who is next? Stay tuned.

MY CALL
I always knew I would be writing this story, PPG has not held back from stating its ambitions in Australia. The ‘by the book’ approach is symptomatic of the professional way in which this very well managed print group operates. With a public share float looming, PPG has to behave in accordance with publicly-listed company regulations and ‘no comment’ is to be expected.

PPG brings very sound fiscal and business management skills to the print businesses it acquires or merges with and this can only be a good thing. Geoff Wilding’s trucking model – buying up smaller operators and making a major, healthy conglomerate – appears to be working for printing too. His CommSoft experience, by his own admission, taught him a valuable lesson and it’s fair to say he wasn’t Robinson Crusoe in the techwreck era.

Having printing veterans Mark Brebner, Peter West and Warwick Whyte involved at senior level is a good move and must give potential acquisition targets a warm feeling of competence.

With Kiwi control at BlueStar, PMP and PPG, trans-Tasman print empires have never looked healthier and the key to this success appears to be the business and financial management skills, coupled with dynamic vision, that many Australian printers have been found wanting for.

But of course, the competition will now be hotter than ever, as an expanded PPG in Australia can compete for national print jobs. This puts them on the same grid as the likes of Promentum (Penfold Buscombe), IPMG, Bluestar and JS McMillan. The business model of allowing component companies to trade on under their own names will probably preclude a Bledisloe-Cup style stoush, but one thing is for sure: the Kiwis are no longer ‘coming,’… they are here.

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