National Pen will complement the successful organic investment Cimpress has already made in its technology and supply chain capabilities for promotional products, apparel and gifts (PPAG) offerings.
“Just like business cards, custom pens are a simple yet highly effective way for small business owners to market their companies,” said Robert Keane, president and 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.”
Traditionally, high minimum order quantities required small customers to pay for product volumes that they didn’t want. Cimpress has made significant organic investments in recent years 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 intuitive and easy-to-use self-service browser-based design tools. National Pen has, in its distinct yet complementary efforts, developed strong capabilities in the production of large numbers of very small orders of custom writing instruments and other hard goods.
Under the terms of the agreement, Cimpress will acquire 100 percent of the outstanding equity interests of National Pen for approximately $218 million, subject to customary adjustments for net debt and working capital. Based on Cimpress estimates made during due diligence, National Pen’s revenue is expected to be approximately $275 million in calendar year 2016.
Subject to satisfaction of various closing conditions, including antitrust clearance in the US and Germany, Cimpress expects the transaction to close as early as the end of December 2016.