Active Display bought by marketing agency

Australia’s biggest point-of-sale printer, Active Display Group, has been bought by major marketing agency STW, in a move that will massively expand its client base and workload.

The companies say the businesses are a ‘perfect fit’ as the acquisition is the last piece of the puzzle for STW in becoming a one-stop-shop for brands, while Active Display gains access to a long list of new clients with STW the owner of some 75 agencies.

Public-listed STW saw its share price soar by eight per cent on news of the deal, which has been 12 months in the making.

Active Display, which was owned by the Gittus family, also has a 50 per cent stake in AFI Branding, has 390 staff along the east coast, and has an office in Hong Kong and big growth desires throughout the Asia-Pacific region.

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Managing director David Gittus says because there is only a 10 per cent client overlap between the two companies the acquisition is a massive growth opportunity for Active Display both in Australia and into Asia.

“We have never really cracked the agency market before, with almost all our clients coming in direct, and STW are a huge company so we have access to a huge client list,” he says.

“If we get the business uplift we expect we will need to add a lot of capacity.”

Gittus says Active Display still has room to grow with its current capabilities, such as going from two to three shifts, but growth in staff and equipment is on the horizon as soon as it is needed.

“Growth by acquisition is on our agenda too – both for suppliers and competing printers that want to get out or come on board,” he says.

He says the recent buy of a majority stake in box and display mounting company Boxlink is one example of this strategy.

Gittus says the resources of STW will accelerate his company’s plans to expand into Asia out of its sales office in Hong Kong as STW already has a client base in Singapore he is keen to make use of.

“There is a big untapped opportunity for us in Asia and partnering with STW only increases that for us,” he says.

Gittus says STW will also benefit hugely from bringing in a printing company, giving it a leg up on other agencies in a competitive market.

“We can help them close up an area of leakage as clients are increasingly going to printers like us directly instead of going through the agency model,” he says.

“Now they can tell clients they can do everything under one roof, and that has been their stated mission for a while and they have been adding companies in social media and other areas to further that goal – we are the next step.

[Related: More mergers and acquisitions]

Gittus says this is a true win-win for both companies that will preserve all jobs and management structure in a long term partnership, unlike other acquisitions that inevitably result in rationalisation.

“We have had several private equity bids in the past we rejected because they were the usual buy the company and carve it up strategy, which we were not interested in,” he says.

“This deal has been 12 months in the making because it is a bit of a new area for STW to get into, but it’s where they needed to go and where the market is taking them.

“It is great they had the guts to go into unfamiliar territory, and I think the eight per cent rise in their share price today means the market agrees.”

Gittus says his plans start with a roadshow to meet heads of STW’s 75 agencies and see where Active Display can start applying its services, probably beginning with promotional print and later into outdoor media and fixed displays.

He says the company has mostly retail clients in Sydney and Melbourne and is making a big push into Brisbane with government and tourism work.

STW chief executive Michael Connaghan says the investment is a ‘perfect fit’ with the company’s strategy of evolving quickly to meet changing client needs, and enhances its ability to service clients’ entire budgets.

“More and more client budgets are being spent in what’s called the ‘place’ sector of the customer journey. The more marketing becomes data driven and digital, the more critical than ever is the consumer experience in store and at point of sale,” he says.

“The addition of Active Display Group fills out our offering perfectly. It will enable us to have a much broader relationship with clients, who more and more are looking for a more holistic solution."

Active Display Group provides a range of specialist marketing collateral services including full service retail marketing material solutions, research and development, production and sourcing, storage, logistics, kitting, fulfilment and installation, shopper-focussed display design, large format printing, in-store brand and category management, temporary and permanent promotional displays (including counter, window, digital and interactive), in-store promotions and activations, store fit outs, signage and VM. Through its subsidiary AFI Branding, the group also provides corporate and event branding and exhibition services.

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