Listed communications business snapped up for £153m
Listed Leeds-based communications business Communisis has been acquired for £153m and its new owners plan to remove it from the stock exchange.
OSG Bidco, an independent provider of outsourced omnichannel billing, critical communications and payment solutions, announced it is acquiring the firm and will also remove it from the public markets. The boards of Bidco and Communisis have reached agreement on the terms of a recommended cash acquisition of £153m for the entire issued and to be issued ordinary share capital.
OSG Bidco said: “Bidco also believes that in order to maximise its future potential, Communisis would be better suited to a private company environment, where initiatives to improve the performance of the business can be implemented effectively, with appropriate support, capital and assistance from Bidco, free from the requirement to meet the public equity market’s shorter-term reporting requirements and expectations, and the costs, constraints and distractions associated with being a listed company.”
Bidco added that it believed that Communisis had become a leader in the communications and marketing outsourcing industries in the UK, Europe and the Middle East. “Bidco also believes that Communisis, with significant investment and access to OSG’s array of services, is well placed to take advantage of shifts in its industry which require an integrated product suite of data, digital and print services,” said Bidco.
“Bidco believes that Communisis represents an attractive opportunity to invest in a well-established business that is reputable for transactional outsourced services and marketing execution services. Bidco believes that there is considerable strategic overlap between the respective businesses of OSG and Communisis and clear opportunities to develop the existing client base on an increasingly international basis.”
Communisis was founded in 1994 and has a current market capitalisation of £149m. Last year’s financial results saw the firm’s revenue rise to £375m, up 4% on the previous year. It’s pre-tax profits for 2017 stood at £14m, up from £11m in 2016.
In August, listed Communisis published its results for the half year period ended 30 June 2018, which showed revenues for the period were up 9% from £173m last year to £188m. Its pre-tax profits dipped 16% to £4m from £4.8m reported in the same period last year; the firm said it had seen an initial volume reduction in marketing communication due to GDPR.
David Gilbertson, chairman of the Communisis board, said: “Communisis has achieved great success as a leading provider of integrated B2B solutions for regulated transactional communication and marketing execution. Its strategic and operational development over the last decade has translated into strong financial performances and shareholder value creation.
“Whilst the Communisis Board believes that the business would have a promising future as an independent listed company, a combination with OSG will provide Communisis with the scale, global presence and digital technology capabilities to ensure it remains at the forefront of its industry and maximises its future potential. The proposal from OSG reflects these opportunities and represents an attractive opportunity for Communisis Shareholders to crystallise an immediate and certain value in cash for their shareholdings, at a significant premium to current and historical share price trading levels.”
Bidco said that the acquisition also represented an opportunity to advance OSG’s strategy to create a global leader in the provision of outsourced client engagement solutions and the Enlarged Group could “better serve the enlarged, complementary client base with its broader geographic footprint.”
“Bidco also believes that, with investment, the Acquisition represents an opportunity to grow the Communisis Brand Deployment business beyond its current geographic reach, and achieve greater client penetration in the markets served; and that with investments in automation, and with greater scale, the Enlarged Group will be able to better compete with larger, more focused competitors, that might currently have broader international reach, better market intelligence and purchasing power,” the firm added.
Bidco OSG serves 5,400 clients across industries including the communications, utility, financial services, healthcare, education, insurance and media and publishing sectors. Since 2013, OSG has successfully completed 17 acquisitions.
Scott Bernstein, chairman and chief executive of OSG, said: “This is a significant development for our business and we believe that uniting Communisis and OSG will be an important step in building one of the largest and most competitive outsourced customer communications platforms serving businesses globally. We look forward to working with the management team and employees of Communisis to build upon their leading position in the industry.
“We are excited by the opportunities to strengthen Communisis’ platform with our best-in-class operational and integrated analogue and digital communications systems, to enhance their client service, and to enable their clients to better engage with and retain their customers. We also look forward to expanding Communisis’ service offering, and offering some of their services to our clients.”
