The purchase follows York Mailing securing £10m of funding though the Business Growth Fund in July, which was earmarked to support acquisitions and capex.
Lettershop has been at the forefront of high-volume direct mail personalisation and, according to York Mailing chief executive Chris Ingram, its work mix and client base is a “natural fit” with York Mailing’s flyer, insert and catalogue operations.
“We think there’s a great opportunity for in particular the customers of Pindar to access the amazing hybrid digital and web offset technologies they’ve created at the Lettershop Group, we’re really excited about what we can present to our customers,” said Ingram.
Leeds-based Lettershop employs 200 staff and is understood to have generated £20m revenue in its financial year ending 31 January 2013, down from £23m in 2012. Clients include Marks & Spencer, Sky and Tesco.
Lettershop commercial director Dave McGolpin and technical/production director Simon Cooper have stepped up to joint managing directors as a result of the sale. Both Cooper and McGolpin will have a “small” equity stake in Lettershop.
“I am delighted that the York Mailing Group of companies has acquired The Lettershop Group and along with Simon and David, I think this is the perfect home for The Lettershop business,” said Lettershop owner John Hornby, who has effectively retired from the business.
“I firmly believe that being part of the UK’s most dynamic print provider offers a real opportunity for TLG to extend their leading technology to a broader customer base.”
Following the acquisition, York Mailing will have a turnover of almost £100m and employ 500 staff across three sites.
“This is a fantastic example of BGF’s capital being put to good use; an ambitious management team leading an expanding business. When we started discussions with Chris and Mike prior to our investment, they flagged that this acquisition would be a significant part of the strategy,” said Richard Taylor, senior investment manager at the BGF.
The Lettershop purchase follows speculation earlier this month that York Mailing was poised to buy Artisan Press in Leicester.
Ingram declined to comment on the rumours surrounding Artisan specifically, but said: “We are always looking at any opportunities that present themselves in the market place that we think will fit with our strategy of creating an exciting set of businesses that add value to each other and provide our portfolio of customers with a rounded set of products.”