The news that Blue Star had purchased Kiwi Labels, Geon’s labels business in Christchurch, came as little surprise to the local print industry but the speed of the transaction caught some on the hop.
Last year had seen Tom Sturgess, Blue Star executive chairman, buy Rapid Labels through his Tiri Group, and early this year, Blue Star, through a combined offer with Mercury Capital. However, the speed with which the deal went through caught a few pundits by surprise. For Blue Star, Kiwi Labels presented a special business opportunity. Sturgess says, “As you know, we already own the Rapid Labels and Panprint businesses. All three, Rapid Labels, Kiwi Labels and Panprint are well established and we enjoy the specialty nature of the businesses; we like this space.”
Buying a company the size of Geon’s label business means completing a fair amount of background work but Greg Howell, who looks after all three label businesses, had already completed part of it. He says, “We performed diligence on Kiwi Labels 12 months ago and knew it was a tidy business but nothing came of it. Even so, we had a level of comfort with the asset. When Geon Group went into receivership, we advised the receivers we were interested in Kiwi Labels if that fitted their plans.”
When the receivers agreed to negotiate, Sturgess, Mercury and Howell had to move quickly; they weren’t the only ones interested. He says, “On the Friday night, we reached an agreement with the receivers. We had to prepare a comprehensive, competitive bid because it was a contested process; there were other bidders. We put a team together and we signed a Sales and Purchase Agreement on the Sunday and funded Monday. Employees were presented with new offers and they all accepted save one.”
The new company commenced trading on the Tuesday. By his own admission, Sturgess has seen a few deals go down but he was impressed with at the compactness of this one. He says, “It was very speedy stuff. It is about as tidy a corporate transition as I have seen and importantly, the processes were all handled correctly.”
To some, Tom Sturgess may appear to have an uncanny sense of business timing but good leaders tend to surround themselves with top people, and Sturgess has great faith in his management team. He says, “I’ve said all along that this is about the people. In this transaction, full credit must go to Greg Howell. Greg worked tirelessly on this deal. In fact, by the time we opened up on Tuesday, we had contacted all the customers, all the suppliers and signed up all the staff. One of the major strengths in this organisation is the quality of our management: Greg Howell in Labels, Bernie Roberts at Webstar, David Jupe at Blue Star, and Kiwi’s GM Guy Phillips. With Kiwi Labels, Guy Phillips was running a solid business. These guys have a real passion for what they do and a genuine commitment.”
Kiwi Labels, based in Heathcote Christchurch will be run as an autonomous business. Blue Star has no plans to consolidate its label companies.
