Digital photo printer PhotoBox has bought personalised cards company Moonpig.com for £120m, forming a merged company that says it is well placed to profit from opportunities in the growing market for personalised publishing.
The company says the deal gives the combined company economies of scale and a strong base from which to take up “new and emerging opportunities in the web-to-print market.”
PhotoBox and Moonpig.com will continue to operate as individual brands. That will see £72m-turnover-business PhotoBox work in a European online photography market whose value is put at £1bn a year. Meanwhile Moonpig.com, which turned over £38m in the year to April 2011, operates in a UK single card market thought to be worth more than £1bn a year, of which only 4% is fulfilled online.
Stan Laurent, group president and chief executive of PhotoBox, said: “It’s great to see two high-growth, profitable and ambitious European online brands come together to leverage each other’s strengths and create a global market leader. Given the opportunities in the personal publishing market, I’m delighted to have the support of such strong financial partners who share our vision and have strong track records supporting successful online businesses.”
Nick Jenkins, founder and chairman of Moonpig.com, said: “Stan and I both believe that we can now offer a much wider range of photographic products to our customers while adding our own Moonpig creativity. We can also take our core greeting card product to countries which would be difficult to access as a standalone business.”
The deal has been financed through existing shares, equity and bank lending. New investment has come from existing investors Highland Capital Partners, Index Ventures and Harbourvest, from new investors Insight Ventures, Quilvest Ventures and Greenspring Associates. Lending is from Royal Bank of Scotland and Barclays Bank.
Lawrence Handen, speaking for Insight Ventures, said: “We share the management team’s vision for the net phase of personalised publishing, particularly its delivery through online channels and support management’s pursuit of innovation, leadership and international growth.”
The senior management teams of both businesses are set to stay within the enlarged group. Stan Laurent will be group president and chief executive of the enlarged group, while Iain Martin will head Moonpig.com as managing director. Moonpig.com founder and executive chairman Nick Jenkins will be an advisor to the board of the enlarged group.