LONDON, UK: Spectra Systems Corporation has entered into a conditional agreement to acquire Cartor Holdings Limited, a leader in the security printing industry, for a maximum consideration of £10.5 million.
Cartor Holdings, through its three wholly-owned subsidiary companies, operates from two manufacturing sites in the UK and France, supplying postage stamps to over 180 administrations globally. In addition to conventional and hybrid postage stamps, it prints and produces tax stamps, vouchers, coupons, certificates, and security documents, and provides a safe and secure environment for hand assembly and fulfilment.
Cartor differentiates itself from its competitors by using state-of-the-art technology to make it difficult for counterfeiters to operate in industries with high monetary or intellectual value products and services.
In addition to its core security printing business, Cartor has worked with Spectra for the past two years to develop the necessary expertise to produce FusionTM substrates for qualification by central banks and leading polymer banknote printers.
In its year ended 30 September 2022, based on audited financial statements prepared in accordance with UK GAAP (FRS102), Cartor generated an EBITDA of £3,022,088 and profit before taxation of £1,010,026 on turnover of £16,022,532. Its net assets at that date were £4,441,120. In its year ended 30 September 2023, based on unaudited management accounts, Cartor generated an EBITDA of £2,525,100 and profit before taxation of £435,600 on turnover of £16,188,200. Its net assets at that date were £4,909,800. No tax was paid in either year due to offset against capital expenditure and tax losses, of which c. £1.9 million remain available.
The international polymer substrate market currently has only two suppliers, CCL Industries in Canada and De La Rue International in the UK. Spectra’s research and dialogues with central banks has clearly shown the desire of the banks to have another supplier of ready to print bespoke polymer substrate.
Spectra has been working with Cartor for two years to achieve high quality conventional and machine-readable, ready for printing polymer substrates which include conductive layers, opacity layers and bespoke window designs as required by central banks. Spectra has enhanced its competitive position in the market by further integrating the production supply chain of FusionTM.
In addition to driving Spectra’s growth in the polymer substrate market, the Acquisition will, in the opinion of Spectra’s Board of Directors, enable Spectra to introduce its advanced security technologies into Cartor products which include postage stamps, tax and revenue stamps, brand authentication labels and ID documents.
Cartor Holdings has established an international presence in these products, which currently utilize various public features, and is expected to be able to both develop the necessary processes to integrate Spectra’s technologies, as well as work with its customers to upsell Spectra products.
Dr. Nabil Lawandy, Chief Executive Officer of Spectra Systems, commented: “The Spectra Board of Directors and I are delighted to announce the acquisition of Cartor to solidify our position in the polymer substrate market and expand our business through new sales channels. Our experience in working with the Cartor team for two years has been exceptional and I have great confidence in the leadership of the group led by Andrew Brigham (Managing Director), Ian Brigham (Chairman) and Martin French (Finance Director).
Andrew, Ian and Martin are experienced, innovative, resourceful and energetic individuals, with whom I am excited to work to increase our revenues and earnings over the coming years.
“Given Spectra’s strong cash position as well as cash generation, the Board is confident that we will continue to issue our dividends and meet our customers’ financial obligations following Completion.”
Andrew Brigham, Managing Director of Cartor, commented: “The acquisition comes at a time when Cartor is poised for growth and under Nabil’s leadership we hope to accelerate this and unlock new opportunities. The Cartor group expects to leverage Spectra’s deep technical expertise and Cartor’s operational ‘know-how’ to deliver game changing solutions to its current and future customers.”
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