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Polestar 'is in talks to acquire Wyndeham', sources claim
Polestar is understood to be in talks over a possible acquisition of Wyndeham, in what would be the biggest print merger in more than a decade.
Industry sources claim that the two are in the early stages of talks with a view to creating a UK print colossus which would have a turnover of close to £500m.
Were a deal to go ahead, it would add Wyndeham’s eight manufacturing plants to Polestar’s 10 in the UK and one in Hungary and give the group massive firepower in web, gravure, direct mail and packaging.
It would also be the biggest deal since Polestar was created through the merger of The British Printing Corporation and Watmoughs in 1998.
Neither company has denied speculation over the talks, although neither would comment directly on any possible deal.
Catherine Hearn, Polestar group operations director, said: "Polestar is talking to organisations all the time and this is just one of those times."
Paul Utting, Wyndeham chief executive, said: "I’ve said for some time that further consolidation in the web-offset market is desirable, so it would make sense for us to be in talks with other web offset companies."
Barry Hibbert, Polestar chief executive, has previously said the web and gravure industry across Europe needs to consolidate, while news that Roto Smeets and Quebecor World’s European operations are to merge suggests the view is widely held.
Speculation has also arisen that Polestar would look to streamline its operations should it buy Wyndeham. A source told PrintWeek: "The preferred option is for Polestar to buy Wyndeham and then shut both companies’ sites in Colchester, as well as Chromoworks and Chantry, before moving to a supersite."
Polestar declined to comment on the speculation. However, such a strategy would echo its gravure set-up, where it has closed Purnell and Greaves in recent years to move printing to its Sheffield supersite.
M&A expert Nicholas Mockett of private equity house Europa Partners commented: "In the current economic climate I expect there to be a softening in advertising and marketing and that may result in lower paginations or reductions in circulation. Right-sizing the magazine printing industry for that eventuality seems like good commercial sense."
A Polestar-Wyndeham merger would be biggest in a decade
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Comments
Matthew Parker - 05 June 2008
I can absolutely see the point of consolidation in the web sector but I'm not sure I get this. IF the speculation is right Polestar would have to buy Wyndeham, bear the cost of shutting a number of plants and invest in a brand new supersite. That's a huge slab of extra cash when there may not be that many organisations willing to put cash into the print industry. And it also assumes that it leaves all customers happy. For instance, would those who have specifically chosen to print on 32pp presses at Chantry be happy moving to a 64pp supersite?
Matthew Parker
www.printandprocurement.com
Gary Smith - 05 June 2008
I tend agree, it does seem to make commercial sense, in times uncertain as these to get your house in order and running effectively as possible.
It would be interesting to see what percentage of business would jump out of the new super-group with Wyndeham's contracts like Haymarket being a sizable chunk of work. I'm sure they would want to see a continuation of business before any merger.
Additionally, those contracts at Wydeham have probably chosen to work with Wyndeham over The Polestar Group and may feel that a takeover / merger may necessitate a retender process, depending on the detail of the contracts they have with Wyndeham?
This especially concerns me as clients we have outside contracts with mailing houses which could mean any move to a supersite as suggested in the article could add an extra day to deliver a job from from Sheffield instead of Heybridge and add cost to delivery charges if office copies come from a northern area to London or South East.
I would not be so concerned about the presses at the colour controls & power on the 72pp Lithomans are far superior to some of the 32pp older presses.
There would also be concerns about a repeating of history of the The British Printing Corporation and Watmoughs in 1998 mentioned in the article. Those of us who remember the merger at the time, and were using Watmoughghs saw key staff leave and drop in quality and service resulting from factories being shut.
As a client of both Polestar and Wyndeham, I will be keeping an eye on negotiations, but would expect to be made aware of and progress from both companies rather than through the trade press.
I'm sure St Ives, Southernprint et al will also be keeping a close eye!
Colin Thompson - 05 June 2008
The future is about consolidation to survive! The banks/investors who own Polestar are the possible driving factor with the Wyndeham bankers/investors wishing to leave the printing sector to invest in other places!
The main industrial sector to continue in decline through 2008 is the manufacturing market especially the Print sector with `mass` redundancies.
Stop me if this sounds familiar: new leads, new ideas, new technology, value-added customer services, diversification, marketing and management. That`s right. those are items that will take you and your company to the next level of profitability and market share in the new year of 2008. Savvy business leaders with an eye on growth - that`s you - already know that. More importantly, the question is how you get there! Invest in the `right` people and business models, do not spend all your money at Drupa on equipment if you have not already invested in people and business models!
The future therefore is, mergers/take-overs but with the `right people and business models` to survive.
Colin Thompson
Cavendish
www.cavendish-mr.org.uk
Simon Biltcliffe- Webmart - 05 June 2008
On the continent the rumour is that Polestar will join the RSDB/QW merger either pre ( or more likely) post- merger with Wyndham.
Funny old world.
Simon Biltcliffe
usual place
usual website!
Paul Wicks - 09 June 2008
It was always on the cards with these two companys having worked at greaves and been on top table negotiations i knew back on april 1st 2007 after an interesting meeting with catherine hearn(no puns on the date please).
As much as i hate to see the shop floor lads take the hit again it is the right thing to do to compete with the likes of southern print and bgprint.
My only thoughts on this merger is big baz using his head and using the skill level he is getting rid of and stops making the same mistakes as they have done for years and quebecor did by creaming the benefits and not re-investing in technology instead of a director (very healthy bonus scheme & pension).
The lads they rushed through the polestar apprentice scheme should have had a lot more time - its a shame as polestar could clean up if it gets its internal structure and training sorted out.
Good luck polestar and it is the best merger in the current climate without a doubt
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