PMP buys McPherson’s directory unit for $16m

According to PMP CEO, David Kirk, the acquisition will allow for better service and value to a major client; Sensis. “The business has a stable, predictable earnings stream and we bought it at what we consider to be a fair price. It’s a business we know well, and therefore we expect the integration to go smoothly. We also believe there are opportunities to improve the business,” he said.

He does not expect much growth, predicting revenues and volumes to remain flat until the end of the contract. What gains there are to be had will come from productivity gains in manufacturing and in the supply chain.

McPherson’s maintains the offer is greater than the return on the Telstra contract over the term.

According to George Gatehouse, general manager McPherson’s Printing Group, the sale does not diminish the company’s commitment to its future in printing. He flagged a consolidation of the two Maryborough (Vic) printing operations ahead of a $15 million equipment refresh, which includes a new Timson press.

“The directory business was a standalone, operating under an agreement that was not as favourable as previously. The sale has no impact on McPherson's existing national book and commercial printing operations. To emphasize this, the Board has recently approved significant capital expenditure for a major re-equipment programme aimed at ensuring that McPherson's Printing Group holds its position at the forefront of technology within the industry,” he said.

The McPherson’s Sydney sales team will relocate to the company’s Kingsgrove office.

PMP intends to maintain the state-of-the-art McPherson’s site, which is based in Chullora, NSW, in conjunction with its own directories printing operation in Victoria.
According to Craig Amos, PMP Print Director of Operations, the acquisition is a strategic purchase that positions PMP for a long-term partnership with Sensis and a stronger role in Asia Pacific directories.

“Both PMP and Sensis will benefit from the economies of scale created by allowing the contract to be managed by one entity. Sensis is very supportive of the transaction. We expect a smooth transition to a new contract in 2009,” he said.