Vistaprint N.V., a leading online provider of professional marketing products and services to micro businesses and the home, today announced it has entered into a definitive agreement to acquire Albumprinter, a privately held Dutch photo book and photo product company, for EURO60 million payable at closing and up to an additional EURO5 million based on a performance based earn-out. This acquisition is in line with Vistaprint's recently announced strategy to be more proactive in its evaluation of acquisition opportunities in adjacent markets.
Albumprinter, based in Amsterdam, with a manufacturing presence in the Hague, is one of the top providers of photo books in the estimated EURO400 million European online photo book market. With approximately EURO37 million in revenue in the trailing twelve months ended September 30, 2011, the company employs about 150 full-time employees, and has a primary market presence in the Netherlands, Belgium, the United Kingdom, Germany, France, Sweden and Norway. Through its award-winning proprietary front-end technology, automated manufacturing processes, customer service and marketing focus, the company processes thousands of orders per day through both a direct-to-consumer model via its brands Albelli, Bonusprint, and Önskefoto, and an indirect model, for which it has partnered with leading retail stores throughout Europe. See www.albumprinter.org for more details on the company.
This acquisition combines Vistaprint's strengths of a pan-European customer base with Albumprinter's specialized expertise and technology for the design and production of photo books. Vistaprint currently plans to promote the Albumprinter offering across the European market. The acquisition will also enable Albumprinter's customers to benefit from a much expanded product offering of personalized products that Vistaprint produces.
"We look forward to welcoming the Albumprinter team and to combining our talent and strengths in support of customers throughout Europe. Albumprinter brings a company culture focused on customer satisfaction, intuitive user interface software, strong photo book manufacturing experience, a premium brand and a solid financial profile," said Robert Keane, president and chief executive officer of Vistaprint.
Albumprinter Chief Executive Officer Kees Arends added, "We expect to provide a product line and expertise that complement Vistaprint's current offerings and geographic reach in the European market. As a company with a similar focus on core capabilities, we are excited about further development of our products and services in order to address what we believe to be a large and growing opportunity. This combination should enable us to even better serve a growing group of satisfied customers."
Subject to satisfaction of various closing conditions, Vistaprint will acquire Albumprinter for EURO60 million in cash, with a further EURO5 million to be paid in cash if Albumprinter meets certain financial targets in calendar year 2012. In addition, Albumprinter management and employees will join the Vistaprint team, but will continue to operate under the Albumprinter brands. The transaction is expected to be completed within one month.
Vistaprint expects to pay the purchase price for Albumprinter using cash on hand and borrowings under a new credit facility. On October 21, 2011, Vistaprint entered into a $250 million senior unsecured revolving credit facility with JPMorgan Chase Bank, N.A., as administrative agent; HSBC Bank USA, National Association, as syndication agent; RBS Citizens, N.A., as documentation agent; J.P. Morgan Securities LLC, as sole bookrunner and sole lead arranger; and the bank lenders who signed the credit agreement. The maturity date of the credit facility is October 21, 2016. Any borrowings under the facility will bear interest at LIBOR plus 1.25% to 1.50%, depending on the ratio of Vistaprint's consolidated indebtedness to its consolidated earnings before interest, taxes, depreciation and amortization (EBITDA). The credit agreement evidencing the facility contains customary representations, warranties, covenants and events of default.
Vistaprint expects this transaction to be modestly dilutive to its GAAP earnings per share in fiscal 2012 and accretive in fiscal 2013. Vistaprint expects this transaction to be accretive in fiscal 2012 to non-GAAP earnings per share, which excludes share based compensation, acquisition-related amortization of intangibles, and write downs of acquisition-related intangible assets, goodwill, inventory, or other assets, if any. Vistaprint will provide updated detailed guidance upon the close of the transaction.
Vistaprint has posted additional information about the transaction, including a presentation and accompanying remarks, on the Investor Relations section of its web site at ir.vistaprint.com.