As reported widely earlier this week, Data Communications Management Corporation (Brampton, ON) has acquired Eclipse Imaging (Burlington, ON) and Thistle Printing (Toronto, ON) in one of the largest recent deals in the Canadian printing industry totaling close to $15 million. Data will acquire the assets of Eclipse for a net purchase price of about $8.8 million, subject to certain closing adjustments relating to working capital. The acquisition of Eclipse will be completed pursuant to an asset purchase agreement dated January 31, 2017, between Data and Eclipse principals Ralph Misale and Grant Malcolm. Data will acquire the common shares of Thistle for a net purchase price of about $6.1 million. The purchase price will be subject to certain closing adjustments relating to working capital. The acquisition of Thistle will be completed pursuant to a share purchase agreement also dated January 31, 2017, between Data, Capri Media, Jive.com and VRG Investment Corporation. The acquisitions of Eclipse and Thistle are expected to close on February 22, 2017, and are subject to customary closing conditions.
Eclipse is a leading Canadian large-format and POP printing and packaging company with approximately 100 employees operating in an 80,000-square-foot facility in Burlington, Ontario. The acquisition of Eclipse adds expanded wide-format, large-format, and grand-format printing capabilities to Data’s portfolio of products and services – with Eclipse having a product mix focused on in-store print, outdoor, transit, display, packaging, kitting and fulfillment. Upon completion of the transaction, Data intends to relocate its current wide-format capabilities from its Mississauga, Ontario facility to Calgary, Alberta. The combined capabilities of Eclipse and Data will provide a unique national offering in the market to better serve the combined company’s customer base. Eclipse generated about $21.3 million in unaudited revenues for the fiscal year ended November 30, 2016, and, over the past three years, has experienced average revenue growth of about 10% per year.
“Ralph Misale (COO) and Grant Malcolm (CFO), the two principals at Eclipse, have built a tremendous business since they acquired Eclipse in 2010 by way of a management buyout,” said Michael G. Sifton, CEO of Data. “We’re excited to have Ralph, Grant and the entire Eclipse team join Data. Eclipse is a leading player in the large-format print market, and we believe that this acquisition will position us well in a growing market. It’s consistent with our strategic objective to expand our capabilities to better serve our customers,” Sifton added.
Thistle is a full-service commercial printing company with about 65 employees operating in a 42,000-square-foot facility in Toronto. The acquisition of Thistle will provide Data with a full-service commercial print facility in Eastern Canada and enable Data to expand its margins by ‘insourcing’ commercial printing capabilities – which it has historically outsourced to local tier-two suppliers. The acquisition adds expertise in commercial printing, design, prepress and bindery services to Data’s portfolio – and complements Data’s current capabilities in direct mail, fulfillment and data management. Thistle generated about $16.4 million in audited revenues for the fiscal year ended October 31, 2016, and has a long history of profitability.
“Thistle’s capabilities are highly complementary to our own,” said Sifton. “While we have the leading commercial print capabilities in Western Canada located in our Calgary, Alberta centre of excellence, Data has not had meaningful commercial print capabilities in Eastern Canada, historically relying on third-party production partners. We believe that the acquisition of Thistle will enable our sales force to capitalize on having a dedicated Eastern production facility, close to the important downtown Toronto market – and we expect to be able to enhance our margins that we would otherwise have had to share with outsourced providers,” Sifton added.