ASX-listed print and marketing business IVE Group has entered into an agreement to acquire Salmat Marketing Solutions, the Australian catalogue distribution business of Salmat Limited, for $25 million. The deal includes Reach Media NZ – Salmat’s catalogue distribution business in New Zealand. Both Marketing Solutions and Reach Media will continue to operate as standalone businesses.
|An IVE Group warehouse, Sydney|
|IVE CEO Matt Aitken|
“These acquisitions complete the final phase of our strategic roadmap over recent years to further expand and strengthen our offer to the retail sector,” says IVE CEO Matt Aitken in a statement to the ASX. “The combination of Australia’s largest letterbox distribution business with IVE’s broader print, data analytics and marketing services offer provides an exciting opportunity for our clients to enhance returns on their marketing spend through our highly integrated offer.
“Importantly, the significant capital expenditure program over the next 18 months to automate catalogue collation will support the ongoing sustainability of the national walker network resulting in a strong distribution channel delivering improved ROI for IVE’s retail clients.”
IVE says the acquisition will be bolstered further by a $25-30 million capital investment program to automate the Marketing Solutions catalogue collation process prior to letterbox delivery for the existing 12,000 strong national (Australian) walker network.
Salmat CEO Rebecca Lowde says: “Having considered a number of alternatives, we believe that the IVE proposal represents the best available option for employees, clients, shareholders and the Marketing Solutions business as a whole in the current market.
“The change in ownership will bring together our market-leading catalogue distribution business with the complementary print, data and marketing offering of the IVE Group. IVE is committed to continuing Salmat’s innovation strategy with further investment to support the ongoing sustainability of the distribution business.
“As we work towards sale completion, we are also now considering the best future options for Salmat and the MicroSourcing business. We will keep the market updated regarding any material decisions,” Lowde says.
The agreement is subject to customary conditions and is scheduled to complete on January 1, 2020. IVE Group will provide transitional support services to Salmat, including the MicroSourcing business, post-completion until final separation takes place.
IVE employs 1,800 people across its operations in Australia, China, Singapore and New Zealand. The group services all major industry sectors including financial services, publishing, retail, healthcare, communications, property, clubs and associations, not- for- profit, utilities, manufacturing, education and government.
Salmat’s Marketing Solutions business incorporates Australia’s leading catalogue distribution network, reaching up to 17 million Australians in 7 million homes each week.