Acquisition expected to bolster Cimpress' mass customization
capabilities in an important segment of the market for small business
VENLO, Netherlands--(BUSINESS WIRE)--Dec. 12, 2016--
Cimpress N.V. (Nasdaq:CMPR), the world leader in mass customization,
announced today it has entered into a definitive agreement to acquire
National Pen Co. LLC, the leading manufacturer and marketer of custom
writing instruments for small and medium businesses. This acquisition
supports Cimpress' strategy to build competitively differentiated supply
chain capabilities that Cimpress makes available via its mass
customization platform and brings to market with a portfolio of focused
brands. National Pen will complement the successful organic investment
Cimpress has already made in its technology and supply chain
capabilities for promotional products, apparel and gifts (PPAG)
"Just like business cards, custom pens are a simple yet highly effective
way for small business owners to market their companies," said Robert
Keane, president and chief executive officer of Cimpress. "National Pen
has tremendous mass customization and related supply chain capabilities
with which they deliver an unrivaled breadth and depth of customizable
writing instruments with low minimum order quantities that meet the
low-volume needs of small businesses. We look forward to welcoming
National Pen's team members and customers to Cimpress."
Traditionally, high minimum order quantities required small customers to
pay for product volumes that they didn’t want. Conversely, Cimpress
leverages the principles of mass customization to empower customers to
purchase custom products in low volumes at an affordable price. Cimpress
has made significant organic investments in recent years to reduce the
minimum order quantity required for custom promotional products and
business apparel. These have automated many of the graphic processing
steps of the value chain so as to reduce per-order setup costs and
developed intuitive and easy-to-use self-service browser-based design
tools. National Pen has, in its distinct yet complementary efforts,
developed strong capabilities in the production of large numbers of very
small orders of custom writing instruments and other hard goods.
"National Pen is a clear leader in one of the key promotional product
segments and has excellent manufacturing and supply chain capabilities
which we do not have today," said Keane. "By combining the company's
capabilities and expertise with those of Cimpress, we are confident we
can help to grow both National Pen and the promotional products offering
of our existing portfolio of brands."
Commenting further on National Pen's capabilities, Keane said, "We
believe National Pen has meaningful scale-based sourcing and production
advantages which drive great customer value. The company also has strong
competencies in direct marketing, telesales and data analytics, which
have contributed to the consistent growth of its revenue."
As part of Cimpress, National Pen will continue to go to market as it
does today, through its primary sales channel which is a combination of
direct mail and telesales. Additionally, Cimpress expects to support and
further develop National Pen's emerging e-commerce presence and to
introduce the National Pen product range into its Vistaprint and Upload
and Print e-commerce brands.
Peter Kelly, National Pen's president and chief executive officer, said,
"We believe our industry is at the beginning of a period of disruptive
shift to e-commerce, and we are thrilled about the opportunities that
joining Cimpress will create for our customers and team members. We
expect our business to thrive as part of Cimpress, and we look forward
to pursuing an exciting vision together to strive to eliminate the cost
barriers that currently keep businesses from fully expressing their
individual brands across a wide variety of personally relevant marketing
materials and gifts."
Financial Terms of Agreement
Under the terms of the agreement, Cimpress will acquire 100 percent of
the outstanding equity interests of National Pen for a purchase price of
approximately $218 million (USD) subject to customary adjustments for
net debt and working capital. Consideration at closing for the
transaction will be in cash, using Cimpress' existing credit facility.
Based on Cimpress estimates made during due diligence, National Pen's
revenue is expected to be approximately $275 million in calendar year
2016, reflecting year-over-year growth of approximately 10%.
Cimpress expects that its planned investment in National Pen will drive
value creation that is consistent with the company's previously
articulated M&A investment hurdle rate of 15% IRR. The company also
expects upon closing this transaction that its leverage ratio as defined
by its debt covenants may be above three times trailing twelve month
EBITDA, but expects this to be temporary. As often stated, Cimpress is
comfortable with a long-term leverage ratio of approximately three times
or below, but would temporarily go above that level for a compelling
opportunity, with a clear path to de-lever to three times or below.
During October and November 2016, Cimpress purchased 593,763 of its own
shares for $50 million inclusive of transaction costs, an average price
per share of $84.22.
Subject to satisfaction of various closing conditions, including
antitrust clearance in the U.S. and Germany, Cimpress expects the
transaction to close as early as the end of December 2016. Cimpress will
provide further background on National Pen and details of the strategic
rationale, synergy opportunities, and integration plans concurrent with
Cimpress’ second fiscal quarter financial results in January 2017.
Cimpress N.V. (Nasdaq:CMPR) is the world leader in mass customization.
For more than 20 years, the company has focused on developing software
and manufacturing capabilities that transform traditional markets in
order to make customized products accessible and affordable to everyone.
Cimpress brings its products to market via a portfolio of more than 20
brands including Vistaprint, Albelli, Drukwerkdeal, Pixartprinting,
Exaprint, WIRmachenDRUCK and many others. That portfolio serves multiple
customer segments across many applications for mass customization. The
company produces more than 46 million unique ordered items a year. To
learn more, visit http://www.cimpress.com.
About National Pen
Founded in 1966, National Pen is a world class provider of personalized
marketing solutions to more than one million small and medium sized
businesses globally. It provides high value promotional products for
businesses and professionals in every industry at low factory direct
pricing. The company is headquartered in San Diego, California with
additional locations in the United States, Mexico, Ireland, and France.
This press release contains statements about our future expectations,
plans and prospects of our business that constitute forward-looking
statements for purposes of the safe harbor provisions under the United
States Private Securities Litigation Reform Act of 1995, including but
not limited to the anticipated closing of Cimpress' acquisition of
National Pen; the expected effects of the acquisition on Cimpress'
financial results, strategic goals, and business; the plans and
expectations for National Pen's business post-acquisition; and National
Pen's projected financial results. Actual results may differ materially
from those indicated by these forward-looking statements. If either
company fails to satisfy the conditions to the closing of the
transaction, then the acquisition may be delayed or may not close at
all. In addition, the acquisition may fail to meet the companies'
business and financial expectations if, among other factors, National
Pen fails to grow its business, revenue, or markets as we expect;
National Pen fails to maintain profitability; Cimpress fails to develop
its mass customization platform or the failure of the platform to drive
competitive advantage as expected; the companies fail to retain their
current customers and attract new customers; the companies fail to
enhance their product lines and offerings; key employees of Cimpress or
National Pen leave the company; Cimpress fails to make planned
investments in its or National Pen's business or those investments do
not have the anticipated effects on the companies' businesses; Cimpress
or National Pen fail to manage the growth and development of their
businesses and operations; competitors succeed in taking sales away from
the companies' products and services; or there are unfavorable changes
in currency exchange rates or general economic conditions. You can also
find other factors described in our Form10-Q for the fiscal quarter
ended September 30, 2016 and the other documents we periodically file
with the U.S. Securities and Exchange Commission. In addition, the
statements and projections in this press release represent our
expectations and beliefs as of the date of this press release, and
subsequent events and developments may cause these expectations,
beliefs, and projections to change. We specifically disclaim any
obligation to update any forward-looking statements. These
forward-looking statements should not be relied upon as representing our
expectations or beliefs as of any date subsequent to the date of this
Cimpress and the Cimpress logo are trademarks of Cimpress N.V. or its
subsidiaries. All other brand and product names appearing in this
release may be trademarks or registered trademarks of their respective
View source version on businesswire.com: http://www.businesswire.com/news/home/20161212005321/en/
Source: Cimpress N.V.
Meredith Burns, +1-781-652-6480
Cheryl Wadsworth, +1-781-690-2120
Peter Kelly, +1-858-675-3000, Ext 2234