Venlo, the Netherlands – Cimpress N.V. announced today it has entered into a definitive agreement to acquire BuildASign, a fast-growing internet-based provider of canvas-print wall décor, business signage and other large-format printed products.
“We are excited to welcome BuildASign to Cimpress. They bring strong talent, a customer-centric culture, low-cost production operations and strong e-commerce capabilities that work seamlessly together to serve customers with market-leading prices, fast delivery and great customer service" said Robert Keane, president and chief executive officer of Cimpress.
BuildASign website www.easycanvasprints.com delivers great quality canvas prints to consumers at unbeatable prices and websites such as www.buildasign.com provide a highly effective way for businesses to display their identity.
Consistent with Cimpress’ strategy, BuildASign will operate in a decentralized, autonomous manner, leveraging Cimpress’ shared strategic capabilities when they are valuable to BuildASign’s customer value proposition and financial returns. Keane said that “Cimpress will bring a long-term investment horizon, substantial procurement synergies and our mass customization platform (MCP) technology capabilities. These added strengths will accelerate BuildASign’s already-fast growth in home décor and reinforce their market position with business signage.”
There is also an opportunity for Vistaprint to turn to BuildASign’s low-cost canvas print fulfillment operations for a substantial portion of its growing home décor revenue that is currently outsourced to other third-party fulfillers. Finally, BuildASign complements the signage business of Cimpress’ other businesses such as Upload and Print and Vistaprint due to their similar product lines.
Bryan Kranik, BuildASign’s chief executive officer, said, "We are excited to be entering this next chapter for BuildASign, and are thrilled about the opportunities that joining Cimpress will create for our customers and team members. Through a combination of our large format expertise and Cimpress’ procurement scale and MCP technology, we look forward to continuing to grow in large markets by allowing our customers to express their identity across a wide variety of products.”
Financial Terms of Agreement
Under the terms of the agreement, Cimpress will acquire approximately 99% of the outstanding equity interests of BuildASign from its current owners, including majority owner PWP Growth Equity, the middle market private equity group of Perella Weinberg Partners. The total valuation is approximately $280 million (USD), subject to customary adjustments for the value of retained interest, net debt, working capital and transaction expenses. Consideration at closing for the transaction will be in cash, using Cimpress' existing credit facility.
BuildASign’s unaudited revenue for the trailing twelve-month period ended August 31, 2018 was approximately $129 million, reflecting year-over-year growth of greater than 20%. Total consideration reflects pro forma unlevered free cash flow and adjusted EBITDA multiples that are consistent with those Cimpress has paid for its past acquisitions of National Pen and Upload and Print businesses, after considering growth rates.
Cimpress expects that its planned investment in BuildASign will drive value creation that is consistent with the company's previously articulated M&A investment hurdle rate of a 15% IRR through a combination of continued profitable growth and near-term procurement and other synergies.
Subject to satisfaction of various closing conditions, including antitrust clearance in the U.S., Cimpress expects the transaction to close as early as the beginning of October 2018. Cimpress will provide further background on BuildASign and details of the strategic rationale, synergy opportunities, and integration plans concurrent with its first quarter fiscal year 2019 earnings announcement on October 31, 2018.