Listed firm The Vitec Group has made a potential $57.3 million cash acquisition.
Vitec, an historic company headquartered in Surrey with more than 100 years of operations behind it, now provides hardware products and software solutions to the growing content creation market.
It has swooped for US firm Savage in a deal which is expected to close in November and will see it join Vitec’s Imaging Solutions Division.
Savage creates backgrounds for the professional studio photographic market and will enhance the group’s operating margin, with an expectation that its return on investment will exceed Vitec’s cost of capital from FY2023 onwards.
Based in Phoenix and used by creative professionals, Savage manufactures an extensive range of high quality, specialist, seamless paper backgrounds or backdrops.
Backgrounds are a key aspect of imaging production as they are the quickest and easiest way to achieve the desired look for commercial and product photography, portraits, video interviews and social media posts, and they dramatically reduce post-production time.
“A key part of the group’s strategy is to invest in businesses exposed to faster-growing segments of the content creation market,” said group CEO Stephen Bird.
“Savage gives the group a leading position in the growing global backgrounds market, which is the largest consumables product used by professional studio photographers. This gives us more frequent contact with our customers as well as more of a regular repeat purchase revenue stream.
“Vitec is the natural home for this well-respected brand as we know the market and their business extremely well.
“We are uniquely positioned to drive significant growth and commercial synergies by leveraging the group’s global distribution channels to develop Savage internationally, by expanding their customer base to capitalise on the fast-growing vlogger, influencer and gamer market already served by our JOBY brand, and by using our digital expertise to sell Savage products online.
“This is a hugely complementary and financially attractive, bolt-on acquisition in a classic Vitec niche. I am delighted to welcome the Savage team to the group.”
Savage COO Rich Reiser will join Vitec while the chairman and CEO will leave the business at the closing of the transaction.