Leading mass customization company Cimpress N.V. (CMPR - Free Report) inked a definitive agreement to buy Exagroup SAS for €91.5 million ($102.4 million), an established web-to-print business in Europe, as it attempts to build an operational platform that optimizes production and supply chain of its products. The deal is expected to conclude in the fourth quarter of fiscal 2015, subject to antitrust approvals and customary closing conditions.
Per the agreement, Cimpress will pay $102.4 million in cash as consideration for 70% of the shares of Exagroup. The deal also gives Cimpress an option to acquire the residual stake in 2019, conditional on the attainment of certain financial performance targets set for calendar year 2017. Cimpress is financing the transaction using its existing debt facility.
The deal is in line with Cimpress’ strategy to leverage a common platform across multiple products, with optimization of production and supply chain. Further, Exagroup’s product scale and sophisticated network of outsourcing partners will augment and deepen Cimpress’ product portfolio.
Exagroup boasts an impressive network of reseller partnerships, and Cimpress plans to further invest in this reseller-focused operational strategy in order to unlock greater value. In addition to broadening product offerings, the acquisition will unlock technological and operational synergies and offer cost and scale advantages.
The deal is expected to be accretive to Cimpress’ fiscal 2015 revenues. However, owing to transaction costs, probable interest expense and anticipated amortization expense for acquisition-related intangible assets, the acquisition is expected to be somewhat dilutive to GAAP EPS for fiscal 2015.
Cimpress, formerly known as Vistaprint, recently changed its corporate name to distinguish and reposition its brand identity. The company boasts an impressive portfolio of customer-centric brands like Vistaprint, Drukwerkdeal, Albelli and Pixartprinting.
Cimpress currently sports a Zacks Rank #1 (Strong Buy). Other stocks in the business services sector which look promising include CBIZ, Inc. (CBZ - Free Report) , ServiceMaster Global Holdings, Inc. (SERV - Free Report) and Sajan, Inc. , each carrying the same rank as Cimpress.
Note: €1 = $1.1190