Major UK mailroom group snaps up South West document specialist for £22m

A Somerset-headquartered document control specialist that works with three quarters of the UK’s NHS trusts has been acquired by a leading information management group in a £22m deal.

Synertec was founded in 1999 and has since become a market leader in document solutions and processes, sending communications electronically and physically on behalf of major public sector and commercial organisations, including around 75% of NHS trusts.

Along with its head office in Wellington, it also has a production and office sites in Bristol, Milton Keynes and Warrington.

It has been bought by Restore, a London-based provider of digital and information management and lifecycle services.

Restore provides digital mailroom services to large clients, including HM Revenue & Customs Service, HM Land Registry, the Office of the Public Guardian and the Ministry of Justice (awarded in 2024), in addition to the DWP.

However, it has lost a number of major clients over recent years.

The acquisition of Synertec is being paid for through an initial cash consideration of £22m plus deferred cash consideration based on its future profits.

Restore CEO Charles Skinner, a former CEO of Bristol-based Brandon Hire, said: “Synertec is a highly complementary addition to Restore and will broaden our service offering to existing customers and provide an attractive opportunity to accelerate growth, both for Synertec and the Group.

“We look forward to bringing the businesses together and creating value for all our stakeholders.”

Synertec managing director Tom Baldock added: “I am proud of what our teams have achieved over the last 25 years. We have a strong platform for growth and an exciting new phase in the company’s development to look forward to.

“Finding the right fit was an important consideration for us and Restore’s common values will benefit both our staff and customers.”

Restore described Synertec’s business as a highly complementary addition to its information management division and supported its growth strategy to broaden its offering to existing customers and facilitating the cross-selling of Restore services to Synertec customers.

It said the large number of public sector and commercial bodies which still managed their communications in-house also provided the opportunity for significant growth.

The Synertec management team had been majority shareholders prior to the acquisition and will remain with the business.

Synertec has been acquired for an initial cash consideration of £22m, together with an existing £11m of debt, plus deferred cash consideration based on its future profits.

The deferred consideration is payable subject to Synertec achieving minimum profit levels in 2028 and 2029.

The initial cash consideration has been funded from Restore’s existing borrowing facilities.

Synertec expects revenue for the 12 months ended 31 March 2025 of around £70m, of which around 60% relates to postage costs for physical communications, which are passed on to its customers. Adjusted operating profit for the same period is expected to be about £5.5m.

Excluding the pass-through of postage costs, operating margins are expected to be around 20%. At its last audited balance sheet date on 31 March 2024, Synertec had gross assets of £29.6m.

Restore today posted annual results showing its group revenue had remained broadly flat at £275.3m last year, with a high proportion of recurring storage income in information management continuing to support its overall revenue.

This was offset by a slow relocations market for Harrow Green commercial moving business, weak operational delivery in its former Digital business, and reduced paper prices in Datashred secure shredding business during the first half.