Cimpress to leverage WIRmachenDRUCK’s network of outsourced production partners to expand its product selection for customers -

VENLO, the Netherlands - Cimpress N.V., the world leader in mass customization, announced today it has entered into a definitive agreement to acquireWIRmachenDRUCK GmbH, a German web-to-print company that serves small and medium businesses, graphic arts professionals and local printers via an e-commerce “upload and print” model. This acquisition supports Cimpress’ strategy to build a mass customization platform (MCP) that it brings to market via focused brands and complements similar investments Cimpress has made in other European countries.

“We are excited to welcome WIRmachenDRUCK’s team members, suppliers and customers to Cimpress,” said Robert Keane, president and chief executive officer of Cimpress. “We expect this acquisition to strengthen Cimpress’ mass customization platform and our ability to serve German customers.”

Keane continued, “WIRmachenDRUCK has impressive internet-based capabilities that aggregate and route large numbers of small orders to a network of specialized production partners. Their outsourced supply chain model allows them to be highly competitive across a vast selection of product types, formats, sizes, finishing options and delivery choices. In the future, we plan to leverage those capabilities well beyond the WIRmachenDRUCK brand by integrating them into our MCP.”

Samuel Voetter, WIRmachenDRUCK’s co-founder and co-chief executive officer said, “We are really pleased to join Cimpress and excited to bring the benefits of Cimpress’ scale and mass customization platform to our customers, partners and team members.” Johannes Voetter, WIRmachenDRUCK’s other co-founder and co-chief executive officer added, “Together with Cimpress, we look forward to further expanding our business and growing in a way that also benefits our highly valued suppliers.”

WIRmachenDRUCK will continue to sell under its recognized and trusted German brand via its website at www.wir-machen-druck.de.

The upload and print business model provides customers with a highly attractive value proposition of online ordering convenience and competitive prices. Cimpress has invested over €300 million on the acquisition of upload and print companies, excluding this transaction. Collectively the previously acquired Cimpress brands in the Upload and Print Business Unit are growing at healthy double-digit year-over-year organic constant-currency growth rates; in the first quarter of fiscal 2016, revenue for this segment was $76.5 million (USD), and adjusted net operating profit was $10.9 million. Cimpress believes that its planned investment in WIRmachenDRUCK is consistent with those prior transactions in terms of strategic fit and financial valuation, and expects WIRmachenDRUCK to drive value creation that is consistent with the company’s previously articulated M&A investment hurdle rate of 15% IRR.

Financial Terms of Agreement

Under the terms of the agreement, Cimpress will acquire 100 percent of the shares of WIRmachenDRUCK for a purchase price of approximately €140 million net of any cash acquired, with a potential earn-out of up to €40m payable in early 2018, subject to the achievement of financial performance targets for calendar years 2016 and 2017. Consideration at closing for the transaction will consist of €132 million in cash and €8 million in Cimpress shares.

Cimpress expects the acquisition to add to revenue, adjusted NOPAT, adjusted EBITDA and free cash flow in fiscal 2016, but to be slightly dilutive to GAAP net income due to interest and intangible asset amortization expense. The company also expects its leverage ratio as defined by its debt covenants to be near or below three times trailing twelve month EBITDA after the close of the transaction.

Subject to satisfaction of various closing conditions, including antitrust clearance, Cimpress expects the transaction to close during its third fiscal quarter of 2016, which ends March 31, 2016.