Photobox, which is Europe’s leading online digital photo service, has announced the completion of its merger with Moonpig.com, the UK’s number one online greetings card retailer, at £120 million. The deal combines the power of two strong, profitable brands and creates one of Europe’s largest online providers in the fast growing market for personal publishing.
Photobox and Moonpig.com will continue to operate as separate brands addressing their respective markets, but the enlarged group expects to leverage increased scale and complementary customer bases to deliver accelerated growth. Both businesses now have the capacity to pursue new and emerging opportunities in the web-to-print market.
Operating in a European online photography market estimated to be worth over a billion Euros per annum, Photobox processed over 1 million individual photo prints each day in 2010 for its 11 million members, and also created and shipped more than 100,000 canvas prints and 1 million photobooks across Europe. Its turnover last year was £72 million.
In Moonpig.com’s core UK market – worth around £1.5 billion per annum – it is estimated that only 4 per cent is currently fulfilled online. This hasn’t stopped the market leader from shipping over 12 million cards to around 3 million customers in the past year. The company’s turnover in the fiscal year to April 2011 was £38 million.
The senior management teams of both businesses remain with the enlarged group post merger. Stan Laurent will serve as group president and CEO, Ian Martin is to be Moonpig.com’s managing director, while the founder Nick Jenkins will be advisor to the enlarged group’s board of directors. Jenkins commented that:”Everyone at Moonpig has thoroughly enjoyed building Moonpig into a household brand. Every morning the equivalent of a Premier League football stadium full of people get a Moonpig card and they love them.”
Greetings card industry business angel Duncan Spence, who invested in Moonpig.com in 2002 – long before it became profitable, has – opted to roll over his investment into shares in the enlarged company, as has Nick Jenkins. The rest of Moonpig.com’s 60 or so shareholders, which included staff and management members, have been bought out by Photobox.
Speaking of his interest in the business, Duncan Spence commented: “I invested in Moonpig.com originally, as I felt that the products they were producing, where traditional greetings card designs could be personalised by the customer and printed as a single card, to be posted direct to the recipient or back to the originating customer, would eventually be very successful. This concept was unique, at a time when most people only had dial up access to the Internet, also they were not confident about using their Credit Cards online to pay for goods. In addition the digital transfer of card files to the Laser printing machines that were available then was excruciatingly slow”.
Mr Spence, who also owns Ling Design and a 30 per cent stake in Carte Blanche Group, helped to bring more publishers of traditional cards into the Moonpig.com portfolio and encouraged further investment in computer, printing and finishing equipment. Under his guidance the company’s production facility was transferred to Guernsey, which helped to increase the profitability of the company. Moonpig now have a very modern print and finishing plant in a building that they own, producing between 25,000 and 100,000 card every day, plus personalised gifts all of which are packaged and despatched from this building. He adds that he has been: “immensely proud to finance and help the world’s leading Personalised Greetings Card retailer become a household name in the UK and Australia.”
Photobox was advised by Lazard and Moonpig.com was advised by Ingenious Corporate Finance on the transaction.
