Cimpress N.V., with its largest printing and production facility in Windsor, ON, entered into a definitive agreement to acquire National Pen Co. LLC, a major manufacturer and marketer of custom writing instruments. The move adds mass customization capabilities to what Cimpress describes an important segment of the market for small business marketing products.
Under the terms of the agreement, Cimpress will acquire 100 percent of the outstanding equity interests of National Pen for a purchase price of approximately US$218 million ($286.5 million Canadian). Consideration at closing for the transaction will be in cash, using Cimpress' existing credit facility. Based on Cimpress estimates made during due diligence, National Pen's revenue is expected to be approximately US$275 million ($361 million Canadian )in calendar year 2016.
“Just like business cards, custom pens are a simple yet highly effective way for small business owners to market their companies,” said Robert Keane, CEO of Cimpress. “National Pen has tremendous mass customization and related supply chain capabilities with which they deliver an unrivaled breadth and depth of customizable writing instruments with low minimum order quantities that meet the low-volume needs of small businesses.”
National Pen is to complement the organic investment Cimpress has already made in its technology and supply chain capabilities for promotional products, apparel and gifts (PPAG) offerings. Cimpress explains it has made significant investments to reduce the minimum order quantity required for custom promotional products and business apparel. These have automated many of the graphic processing steps of the value chain so as to reduce per-order setup costs and developed more intuitive self-service, browser-based design tools.
“National Pen is a clear leader in one of the key promotional product segments and has excellent manufacturing and supply chain capabilities, which we do not have today,” said Keane. “By combining the company's capabilities and expertise with those of Cimpress, we are confident we can help to grow both National Pen and the promotional products offering of our existing portfolio of brands.”
Keane continued to explain National Pen has meaningful scale-based sourcing and production advantages, as well as strong competencies in direct marketing, telesales and data analytics. As part of Cimpress, National Pen will continue to go to market as it does today, through its primary sales channel which is a combination of direct mail and telesales. Additionally, Cimpress expects further develop National Pen’s e-commerce presence and to introduce the National Pen product range into its Vistaprint and Upload and Print e-commerce brands.
Founded in 1966, National Pen provides personalized marketing solutions to more than one million small- and medium-sized businesses globally. The company is headquartered in San Diego, California, with additional locations in the United States, Mexico, Ireland, and France.
Cimpress to Buy National Pen for $287M
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