Blue Star has conditionally agreed to sell its successful label company, Rapid Labels, only days after Rapid Labels enjoyed gold medal success at Pride In Print and saw one of its label printers become Apprentice of the Year.
Tom Sturgess, the man who oversaw the sale of Blue Star to Champ private equity five years ago for NZ$385m, from fellow Kiwi fund Pacific Equity Partners, has re-entered the frame. Blue Star has agreed to sell its Rapid Labels business to Sturgess's Tiri Group. Sturgess has stayed in touch with the company since then and emceed the official opening of Blue Star's Webstar facility in West Auckland last year.
Blue Star has already received a conditional takeover offer for the whole company. Phillip Bower, managing director of Blue Star, upbeat about the developments, said, “It’s been positive and at the end of the day the buyer will certainly be purchasing a company with a strong market position, we have unsurpassed technology and we believe everything will work out well.”
Blue Star’s latest figures show an operating loss of A$15.6m for the first half of this year, A$9.3m more than the previous corresponding period last year. Sales revenue for the six months was A$280.3m, some A$13m less than 2010’s result for the same period.
In a report to bondholders, Blue Star says “The three months ended March 31, 2012, saw a continuation of the difficult trading conditions that have affected the printing industry over the past several years and the business expects these conditions to continue over the balance of the financial year.”
Blue Star’s earnings before interest and taxes of A$20.7m was marginally lower than the previous year’s A$24m as the group continued to see decline in sales which saw a 4.4 per cent drop compared to the previous year.
Blue Star has been feeling the pain of the printing industry for a while, and only escaped receivership less than a year ago thanks to a controversial funding package agreed by its bondholders, and by the banks extending their A$195m facility.
According to the NZX, the company’s September 15,2015, bonds are trading at just $2 per $100 face amount. The Blue Star board says it is unable to say what value, if any, will be attributed to the bonds, and is unable to say what value would accrue to any stakeholders in the group.
The top end of print town is in a period of flux, Australasia's biggest printer PMP is currently a takeover target for TNA.