Communisis to invest with £20m fundraising

COMMUNISIS has hailed a £20m fundraising that will enable the marketing services provider to strengthen its balance sheet and hunt out acquisitions.

The Leeds-headquartered company is issuing 50m new ordinary shares at 40p per share, 5.6p below the closing price on Wednesday.

The placing, which has seen 37.5m shares placed firmly with fund managers, is subject to shareholder approval on March 5.

It will raise £18.9m after expenses, some of the cash being used to cut debt.

It has set aside £11.5m of the placing for deals and working capital.

Chairman Peter Hickson said: “Communisis continues to make significant progress in growing sales and expanding its service offering. As the communications landscape continues to change, we are the trusted partner to our clients in particular with the move towards more digital communications.
 
“The fundraising which we are proposing today will strengthen our balance sheet considerably; providing us with further resource to invest in delivering new contracts, optimise our cost base and supplement the organic growth plan with niche acquisitions. 
 
“We are pleased to report that the placing was substantially oversubscribed with strong demand from both existing shareholders and new institutional investors.”
 
The company added that it believed the placing was in the best interests of the company.

It added: “The net proceeds of the fundraising will help the group achieve its strategic objectives and will be used for investment in new contracts and to fund previously announced restructuring costs in connection with the group’s Lisburn and Leeds operations and also small acquisitions and working capital.”

TheBusinessDesk.com reported last March how Communisis had increased annual turnover and pre-exceptional profits after closing four locations and cutting costs.

It has reduced its number of office locations from 14 to 10 and has restructured its Leeds manufacturing facility.
 
Nplus 1 Singer Advisory, led by Richard Lindley and James  White, is acting as sponsor, financial adviser and joint broker to Communisis.

Cenkos Securities is acting as joint broker to Communisis on the placing.

Pinsent Masons in Leeds (Alison Starr and Alan Chan) acted as legal adviser to Communisis, while Ernst & Young (David Buckley and Hilary Thompson) has also advised.

Leeds-based law firm Walker Morris was legal adviser to Nplus 1 Singer Advisory and Cenkos Securities.

Richard Naish and Paul Emmett, both partners in the corporate team at Walker Morris, advised Nplus 1 Singer and Cenkos Securities.

Mr Naish said: “It is great to work on deals like this – a Yorkshire PLC being advised by a financial adviser in Yorkshire who in turn is advised by Walker Morris. 

“It shows the strength of the local advisory community in equity capital markets work, particularly given that both the accountants and lawyers advising Communisis are also Yorkshire based.”

Communisis describes its work as ‘all-channel marketing’ which covers areas including print, digital, web, social media. promotional, direct mail, advertising, and point of sale.