Marketing services group IVE is buying the Australian catalogue distribution business of Salmat Limited.
The $25 million deal includes the acquisition of Reach Media NZ Limited, Salmat’s catalogue distribution business in New Zealand.
Marketing Solutions and Reach Media will form part of IVE’s production and distribution offering and will continue to operate as standalone businesses.
IVE will also spend $25 million to $30 million on a capital investment program to automate the catalogue collation process prior to letterbox delivery for the existing 12,000-member national Australian walker network.
IVE CEO Matt Aitken says the acquisitions complete the final phase of a strategic roadmap to expand and strengthen the company's offer to the retail sector.
"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," he says.
"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."
In August IVE posted a 4.1% lift in full year revenue to $724.2 million despite "soft" trading conditions. Statutory net profit after tax for the 12 months to June was up 21.7% to $31.3 million.
The company then decided to drop the brands Kalido, Blue Star, Pareto, IVEO, from November and operate under the IVE umbrella.
Salmat CEO Rebecca Lowde says the IVE proposal represents the best available option for employees, clients, shareholders and the 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," she says.
"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."
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