Colorpak, a leading folding carton printer, has acquired the self-adhesive label and flexible packaging business of Castle Graphics Pty Ltd.
Colorpak was a family company which went public and listed on the stock exchange last March. Its purchase of Castle Graphics was announced just weeks after Australia’s number two folding carton manufacturer, Carter Holt Harvey Packaging, announced a takeover offer for the third largest company in the sector, Wadepack.
Colorpak managing director Alex Commins said the purchase was part of Colorpak’s strategy to further broaden its high quality product and service offerings to its existing and potential customer base.
Colorpak supplied predominantly short-run, folding carton packaging for some of the best-known brands in the pharmaceuticals, healthcare, cosmetics, confectionery and other consumer goods sectors.
In the 2004 financial year, Sydney based Castle Graphics had achieved revenues of $6.5 million. The acquisition price was based on a multiple of five times earnings and was immediately earnings per share positive to Colorpak, he said.
“The acquisition represents a key strategic step for Colorpak. We were attracted to Castle Graphics because it extends Colorpak’s service offerings to include blister and lidding foils, self-adhesive labels and assorted flexible packaging and also of its long-standing reputation as a quality supplier.
“Its fit with Colorpak is perfect with approximately 70 per cent of its sales going directly to a portfolio of blue chip clients in the pharmaceutical and healthcare sector.
“This acquisition increases our presence in the Sydney market and is well timed as we prepare to move our entire Sydney operation to a greenfield site in Regents Park.
“With both businesses having common customers, the other exciting aspect of this acquisition is that it provides both growth and synergy opportunities because it also introduces Colorpak to many new customers, including four in the pharma/healthcare sector.”
He said Castle Graphics owner Garry Lingard had run the business since 1993 and was a well known and respected business man in the Australian printing and packaging industry.
Lingard said “I am delighted to be joining forces with an excellent company like Colorpak as it will assure the long term future and development of the company and staff. The acquisition of our business provides Colorpak with valuable resources, good synergies and a growth platform in complementary new product lines. It is, by any measure, an excellent fit”