In a concerted effort to extend its geographical footprint,
business services provider
) recently inked a definitive agreement to acquire privately-held
printing and graphic product producer People & Print Group
B.V. for an undisclosed amount. The transaction is likely to form
a behemoth in its category with complementary product offerings,
operating synergies and technological collaboration to serve a
wide spectrum of customers across the globe.
Based in Deventer, the Netherlands, People & Print Group
offers a complete solution for printing and graphic related
products through a personalized touch for a unique appeal. Its
product portfolio comprises business cards, posters, photos on
canvas and giant banners, which are largely produced in-house for
a fast, flexible and cost-effective delivery. Since its inception
as a novel concept in 2005, People & Print Group has evolved
as one of the top players in the European printing market
handling 1,600 orders on an average per day in 2013 with
approximately 175 employees.
Focusing primarily on the Dutch and Belgian markets, People &
Print Group has several online customer-friendly websites,
including its most well-known site, Drukwerkdeal.nl. With a
dedicated aftersales service, it boasts of a steady crop of
repeat customers, including local printers, design agencies and
resellers, as well as small businesses that have the ability to
create and upload graphic design files.
The combined entity has a complementary product portfolio that is
likely to result in improved customer value proposition and
profitability over time through economies of scale. The
acquisition brings together two similar working cultures and
extends the core customer group served by the respective
companies. The deal particularly combines People & Print
Group's production innovation and customer relationship expertise
with Vistaprint's technology and manufacturing prowess to form an
undisputed leader in the industry.
To start with, Vistaprint intends to operate the People &
Print Group brands as an independent and focused subsidiary with
a distinct value proposition and separate brand positioning.
However, over the years, products from the respective brands are
expected to be introduced to the other to extend the product
offerings of the combined entity.
With People & Print Group on board, Vistaprint has an easy
access to the Dutch and the Belgian markets. It also gains a
solid foothold in the highly fragmented small business market
with a devoted customer base and a diversified product portfolio
of the People & Print Group. On the other hand, the merger
enables People & Print Group to better serve its own
customers by leveraging Vistaprint's scale, financial strength,
technology and manufacturing expertise.
The acquisition is expected to close by the fourth quarter of
fiscal 2014. People & Print Group workforce will join the
Vistaprint team, but will continue to operate its own brands. The
acquisition is expected to be neutral to Vistaprint's fiscal 2014
earnings, although it is likely to come up with an updated
guidance and commentary regarding the transaction sometime later.
Despite this strategic acquisition news, share prices of
Vistaprint remained relatively flat and closed the trading
session on Feb 18 at $50.98. However, we see a healthy growth
potential for Vistaprint post integration.
Vistaprint currently sports a Zacks Rank #1 (Strong Buy). Besides
Vistaprint, stocks that look promising and are worth considering
for now include
Broadridge Financial Solutions, Inc.
Huron Consulting Group Inc.
), each carrying a Zacks Rank #2 (Buy).
BROADRIDGE FINL (BR): Free Stock Analysis
HURON CONSLT GP (HURN): Free Stock Analysis
PAYCHEX INC (PAYX): Free Stock Analysis
VISTAPRINT NV (VPRT): Free Stock Analysis
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