St Ives Plc, a printing group, is selling its magazine printing business after it had been buffeted by competition and online ad migration (release).
Its subsidiary, St Ives Web, has nothing to do with the worldwide web but refers to “web” offset printing. The division prints magazines and catalogues for clients and employs 670 in Peterborough, Plymouth and Roche.
St Ives is selling it to Walstead Newco3, owner of the rival Wyndeham printer, for £20 million (£15 in cash, £5 million in loan notes).
The division lost £5.1 million on a £70.5 million revenue revenue in 2009/10. St Ives says:
“The disposal is consistent with the Group’s strategy of focusing on non-commoditised markets where, in addition to printed products, it can supply value-added services including complex logistical, fulfilment and marketing requirements.
“St Ives has continued to experience particularly tough conditions in the Magazine business’ markets in recent years, where excess capacity has exerted significant downward price pressure, resulting in poor levels of profitability. These markets also face structural challenges with the increasing trend of migration of advertising and content into digital formats.
“The Disposal will realise significant value for St Ives and the net proceeds will be used to strengthen further the continuing Group’s balance sheet, and to provide additional flexibility to invest to improve the business.”
Last year, St Ives sought to move beyond paper by buying a database marketing company, Occam.