Wyndeham Group News > Acquisition of Graphic Facilities Group & Placing of 3.64m new shares

Acquisition of Graphic Facilities Group & Placing of 3.64m new shares

23rd April 2004

Wyndeham Press Group plc, a technology-leader in the UK specialist magazines, commercial literature and direct mail print markets, today announces that it has acquired Graphic Facilities Group (“Graphic Facilities”), a pre-press and print process specialist, for an initial consideration of £4.62 million, comprising £1.9 million in cash and the future issue to the vendors of 2,307,692 new ordinary shares. In addition, there is a deferred consideration of up to £1.3 million, subject to Graphic Facilities attaining certain profit targets for its financial year to 30th June 2004. The acquisition is expected to be earnings enhancing in the year to 31st March 2005.

Graphic Facilities is a fast growing collective of highly specialised skills and trades at the forefront of digital pre-press solutions, handling all stages of the process from design, photography and colour management through to final digital files. It comprises of Graphics – London, Graphics – Kent, Kestrel and Masterpiece. In the year to 30th June 2003, Graphics Facilities reported turnover of £15.7 million and pre-tax profits of approximately £1.1 million, after adjusting for non-recurring items. The net assets on acquisition are warranted to be not less than £2.2 million.

The addition of Graphics Facilities, which complements Wyndeham Argent, the Group’s existing pre-press business, creates the UK’s largest specialist pre-press operation and reinforces the Group’s capabilities as a true full service provider from initial design to delivery of the final printed product. In particular, the Group will benefit from the specialised practices of Graphic Facilities, and will be able to increase the diversity, flexibility and security of its offering to customers. With its leading-edge capability in digital asset management, an increasingly important service for clients, this reinforces Wyndeham’s position as the market leader in innovation.

In addition to the Group’s existing magazines, commercial literature and direct mail print markets, Graphics Facilities also serves the packaging market. As it will be rebranded and fully integrated into the recently realigned Group structure, this provides further opportunities for cross selling through the centralised sales organisation.

In connection with the acquisition, Wyndeham has placed with institutional investors 3,636,500 new ordinary shares at 110p per share to raise approximately £4 million. The net proceeds will be used to fund the initial cash consideration, the costs of the acquisition, together with any deferred consideration payable and will provide an additional £600,000 of working capital for the business which, in the short term, will reduce the Group’s net indebtedness.

£3m contract win for IPC Media titles

In line with Wyndeham’s increasing commitment to pre-press, the Group has secured a contract to produce pre-press elements of IPC Media’s television listings and women’s weekly titles. This work will be produced using new workflow technology and is valued at approximately £1 million per annum for the initial three year contract.

Appointment of Non-Executive Director

Wyndeham is delighted to announce the appointment of Robert Stokell as Non-Executive Director with immediate effect. Robert brings extensive business experience, having been a management consultant from 1989 to 1994, from where he joined Laporte and consecutively served as managing director of the three most significant divisions.

From November 1996 to July 2000, Robert was Chief Executive of SGB Group, where he successfully floated the group and established a strong record for profit delivery within a listed UK company environment. Robert has recently been appointed as Non-Executive Director of Hampson Industries.

Commenting on the acquisition and the new contract award, Bryan Bedson, Chairman of Wyndeham, said:

“The combination of Graphics Facilities with Wyndeham Argent creates the UK’s leading pre-press business in terms of both scale and technology. This reinforces our position as an integrated business, able to offer our clients a true full service capability from initial design to finished product. In its own right, this acquisition offers exciting growth opportunities, which are enhanced by the ability to cross-sell services through our centralised sales organisation.

“Our recent contract win has justified our commitment to investment in pre-press technology and this acquisition further strengthens our offering and services to customers.”

Wyndeham will make an update on trading in early April prior its preliminary results announcement in June 2004.