A few weeks back, Clemenger Group chief executive Jim Moser was welcoming a new business to the family as justONE was fused with .99. And now he's farewelling one of the family after selling direct mailhouse and digital print provider Mailshop to managing director Deidre Ross.
Moser says Clemenger Group has owned Mailshop for around 17 years and he says Ross approached him about 18 months ago to buy it outright.
"The timing was pretty spot on for both of us in that we were looking at our portfolio of companies and deciding where our acquisition strategies would be for the future," says Moser.
Clemenger Group owned a fulfillment company called DRA in Australia and, as a result of a "recalibration", it decided the business wasn't core to what its offering was and sold it last year. Mailshop, he says, is in the same category.
Ross, who Moser says is a significant shareholder in the the Clememger Group, will sell those shares come 1 July to help fund the sale and take 100 percent ownership.
"It kind of suits my nature," she laughs. "Just how I like it ... But a lot of people thought I owned Mailshop anyway."
Moser: "We've got this company that's been a fantastic investment for over a decade. And Deidre presented us with what we thought was a good offer. Also, it's a great career and business move for her. I really put the success of Mailshop very much down to Deidre's leadership over the past ten years. And we are continuing to back her as we've structured this deal to loan her some money and she will pay it back over the next few years."
As for how the business is currently tracking, neither party wanted to talk specifics. But both are quick to say it's not a fire sale and the company's consistency over the years in terms of profits meant Moser was initially loathe to sell it.
"But it is the right thing for us and the right thing for Deidre," he says.
The price paid wasn't disclosed (but we'll be keeping an eye on Clemenger Group's accounts in the next few years to see if we can find out what it paid for justONE and what it got for Mailshop) and while the money wasn't essential to pay for the other acquisitions the group is planning, Moser says it will free up some money to focus on data, research, experiential, sponsorship and shopper marketing companies he's currently looking at.
A reverse takeover like this is quite unusual, he says. And there aren't a whole lot of companies Clemenger Group has sold in the past.
"Generally when we've sold companies it's because of the wrong cultural fit. But in this case there was a strong cultural fit."
Ross says the team's reaction to the news has been overwhelmingly positive.
"The one company we've never had turnover problems with is Mailshop, particularly in the executive ranks," says Moser.
Moser says Mailshop's business has changed quite dramatically from when it first invested in it (at the time the group made up about 50 percent of Mailshop's business, but Ross estimates it's probably down to around five percent now). It was very much a traditional mail house, but today it has diversified into many different areas like online fulfillment for point of sale, merchandising, and stock management (it's also released an app called Squirrel).
The app, which was developed by &some and doesn't require any training, is a real-time logistics and management tool that "puts you in charge and takes the hassle out of managing stock" and basically lets people "go to work and online shop".
"With your secure login, you can manage and order point of sale merchandise and other stock items with ease," the spiel says. "Whether it is regular monthly stock activity, sales promotion blitzes or delivery of high value items like iPads, Squirrel will save you time and money with a deceptively simple and intuitive interface, robust functionality and streamlined processes."
Even though Ross says mail is declining in volume, Mailshop has had an increase in volume and that's because of creative direct mail and distribution.
"Where we've been very lucky is that we've got clients who have been with us for many years and they've just been so loyal," she says.
Personalised direct mail and the printing capabilities of Mailshop has means marketers and agencies can be far more creative now. And Ross, along with justONE and now .99 managing director Ben Goodale, is currently working with NZ Post to try and incentivise more marketing mail by decreasing the cost (read Goodale's column in the latest NZ Marketing about how NZ Post missed a trick by not making marketing mail cheaper).
The new arrangement won't affect any existing clients like Farmers, SkyCity, ANZ, Vodafone, Sony, JustONE, House of Travel, DraftFCB, Tangible and many others, they say. And, because of the loan, Moser says it has "a vested interest in Mailshop's success and we see no reason to change anything."