- Media group Salmat has received a $25 million bailout that will see the company’s marketing division bought by industry competitor, IVE Group
- After conducting an internal review, recently increasing full year financial earnings by $800,000, Salmat agreed upon a buyout proposal from IVE
- Salmat recently celebrated its 40th anniversary of business — most known for its catalogue distribution network and marketing services
- Shares in Salmat today gained 20 per cent to trade at an even 66 cents per share
- IVE Group has also seen a premium on the Australian market today, with shares trading higher by 1.45 per cent for $2.10 each
Standout Australian media group Salmat (ASX:SLM) will sell its marketing solutions division for $25 million.
The company announced to investors today it will be handed over to industry competitor IVE Group through a purchase of its shares and subsidiaries.
Left behind under Salmat’s control will be the “Managed Solutions” division of business.
IVE Group is listed on the Australian market alongside Salmat, posing a considerably larger market cap of $306.7 million — towering Salmat’s $109.8 million valuation.
Completion of the deal is slated for the start of January next year.
“Having considered a number of alternatives, we believe that the IVE proposal represents the best available option for employees, clients, shareholders and the Marketing Solutions business as a whole in the current market,” Salmat Chief Executive Rebecca Lowde said.
“The change in ownership will bring together our market-leading catalogue distribution business with the complementary print, data and marketing offering of the IVE Group.”
The transaction will see Salmat hand over its subsidiary, Reach Media New Zealand, to IVE as well. Reach Media is a catalogue distributor.
Salmat recently celebrated its 40th anniversary of business in late October.
Since forming, Salmat has gone on to reach 17 million Australians across seven million homes through its catalogue distribution network.
Salmat management said today the million-dollar bailout was reached after conducting an industry review on the sustainability of its distribution network.
In late October, Salmat released its full year results for the 2019 Financial Year — achieving $251 million in revenue. This is only a slight increase from the 2018 Financial Year’s earnings of $250.2 million.
IVE Group employs nearly 2000 employees across Sydney, Melbourne, Brisbane, China, Singapore, and New Zealand.
IVE is most known to service industries such as finance, publishing, retail, healthcare, communications, property, non-profit groups, and government.
“IVE is committed to continuing Salmat’s innovation strategy with further investment to support the ongoing sustainability of the distribution business,” Rebecca added.
“We will keep the market updated regarding any material decisions.”
Shares in Salmat today gained 20 per cent to trade at an even 66 cents per share.
IVE Group has also seen a premium on the Australian market today, with shares trading higher by 1.45 per cent for $2.10 each.