MIDLOTHIAN, Texas--Nov. 1, 2004-- Ennis, Inc., a manufacturer of printed business products headquartered in Midlothian, Texas, has acquired 100% of the stock of Royal Business Forms, Inc., ("Royal") a privately held company headquartered in Arlington, Texas, for $3.7 million in Ennis stock. The stock value used to determine the number of shares issued to equal the $3.7 million valuation is based upon the average trading price of Ennis stock over a 30-day trading period ending last week. There is no debt on the balance sheet of Royal other than trade payables and accrued expenses. Royal has been in existence and operating in Arlington, Texas since 1959 and has customers throughout the United States. The acquisition of Royal continues the Ennis strategy of growth through related manufactured products for our existing customer base. The acquisition will add additional short-run print products and solutions and financial documents sold through the indirect sales (distributorship) marketplace. Due to the low number of shares issued (approximately 178,000 shares) compared to the total outstanding shares and due the amount of the purchase price, there were no regulatory or Ennis shareholder approvals necessary to consummate this transaction.
The transaction is expected to be accretive to Ennis' earnings in the first full year of operations. Royal had sales of approximately $12.0 million as of Sept. 30, 2004, its most recent fiscal year end. Mr. Alf Bumgardner, President, CEO and founder of Royal, will stay on as the General Manager of Royal.
Keith Walters, Chairman, President and CEO of Ennis, said, "Today's announcement is another positive step forward in the continued growth and consolidation of the forms business into Ennis. The transaction will add to the growth in the forms business that has placed Ennis among the top players in the forms and printed products arena and continue to serve our 40,000 independent distributors and printers who comprise the largest share of the forms marketplace. We are delighted to have Alf Bumgardner stay on to manage this business and we are delighted that Alf chose to associate his business with Ennis and exchange his shares for Ennis shares in the transaction. It is great news for our customers, our employees and our shareholders."
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