THE industrial holding company Inishtech has expanded into the with the acquisition of Meridian Printing and Elite Color Group, two US printing companies, for $13 million (£8.3 million). There may be a further payment of up to $3 million, based on performance.
The acquisitions will be used as a base for further US buys, said Mr Brian Molloy, an Inishtech director. No further acquisitions are imminent. However, Inishtech is to embark on a similar takeover strategy in the US to that pursued in Britain and Ireland over the past seven years.
Meridian and Elite are based in Providence, Rhode Island. Meridian produces high value added premium printed materials for customers such as art galleries and museums while Elite specialises in the preparation of pre press materials for printing and publishing companies.
There is an initial cash consideration of $10 million but a further $3 million has been paid for land, buildings and other fixed assets associated with the Meridian business. Meridian generated pre tax profits of $890,000 on sales of $ 6.5 million in the six months ended October 31st 1995.
Profits of $1.25 million were recorded in the 12 months to April 30th, 1995. It is now generating annual profits of around $1.7 million.
Profits of $1.25 million were recorded in the 12 months to April 30th, 1995. It is now generating annual profits of around $1.7 million.
Elite recorded profits of $600,000 million on sales of $30 million in the 10 months to October 31st 1995. It is now generating annual profits of some $700,000 compared with $630,000 in 1994. The net assets being bought have a value of over $7 million. This will result in a goodwill of £3.8 million for Inishtech which will be written off over 50 years. However, with annual profits of $2.4 million between the two US companies, they have been bought on an attractive profit multiple of 5.4.
