Printo consolidates, acquires Canvera - The Noel D'Cunha Sunday Column

Printo is spreading its wings again?
I look at it differently. We are growing at a relatively steady pace of 22%-25%, year on year.

Good?
It is slower than I would like but it is a sustainable pace as it helps us remain profitable. We keep scanning the horizon and opportunistically, we come across good companies to add to our portfolio and we do it if there is a fit. Some of these acquisitions may or may not spur growth in the near term but they need to fit in with the long term. 

Why Canvera?
Why not Canvera?

Okay. Why not Canvera?
At Canvera, we have India’s largest wedding photobook make. We are such a dominant brand in the wedding photographer community that Canvera is now a common noun and used as a generic term in almost every geography.

Quite true.
If you see a Canvera photo album, it is a world class product made by a team that understands the culture of quality and builds products that command high margins. Printo understands the value of a culture of quality. The digital printing production base of Canvera is something that the Printo team understands well and can leverage it for its existing customers. Together we are arguably India’s largest digital printing company.  

What is the financial nature of the takeover?
This has been a cash plus stock deal for Canvera shareholders. We will invest over Rs 20 crore over the next 18-24 months to take Canvera to the next level.    

In what way can Canvera grow the Printo business?
Canvera has an unparalleled ability to track every sheet on the shopfloor and deliver large volumes in a very short time. We have already leveraged this for some of our large enterprise customers who needed quick execution of commercially sensitive prints.

How so?
For example, Vinay Sharma, Printo’s CTO, custom built a VDP engine that produced custom QR coded stickers for a large financial firm over the Canvera production facility.  

How will you develop the all-important photo album customer base of the acquired company?
Canvera is focusing on enhancing the product portfolio, something that Printo is strong at. We launched the world’s first Swarovski studded wedding album and have an exclusive tie-up with the brand to create Canvera’s Celestial Range of wedding albums. Our focus is on helping our customers to wow their customers through exclusive products for an entire spectrum of budgets. We have a base of over 48,000 wedding photographers and there are new photographers being added each day.    

When PrintWeek visited your factory, you said: location location location. Will you rebrand the company?
No way. Canvera is an outstanding brand and we would have acquired it for just that, if for nothing else. Our goal is to double Canvera’s penetration and double its business in three years.

Will you transfer all customers to Printo?
Canvera’s customers are distinct from Printo’s. We serve SMBs and consumers at retail while Canvera focuses on wedding photographers.   

Any lesson you have learnt from Canvera about levels of service and how to develop the customer base?
Too early to claim we have grown any wiser. But I am amazed how Canvera reaches out to thousands of photographers in hundreds of cities, without building a consumer brand. I am equally amazed at how we churn out better-than-world class albums.

How do they compare with the international players?
Well, I have visited some of the largest album makers in Europe and Asia and I can safely say Canvera’s quality surpasses all, simply because the Indian wedding customers are a discerning lot that demands the best. So lots of learning in distribution and quality here. 

What is the plan in place for integrating printed products and equipment?
Printo CEO, Balu Iyer, is also the CEO for Canvera. Together we are ensuring that the core identity of each business remains untouched while a classic shared services model for associated services is proposed.

And staff?
We are almost 1,000 employees at Printo-Canvera. This needs better co-ordination and leaner rather than complex organisation structures. We share a bunch of equipment from the Indigo 7900s to the engraving and UV prints.    

How do you communicate the reasons behind the acquisition to staff and customers to ensure buy-in from everyone involved especially former customers of the new acquisition?
We do so by having one transparent version of the truth and then disseminating that version to everyone we speak.  But I am learning that over-communicating is key and we should get better at it. For our customers, it is important that their vendor is stable and I believe the Canvera customers and team have greeted the news of a Printo merger very positively. The new management’s job is to ensure we build a company with happy people and happy customers.   

The past 12 months?
Printo had a very good year. We have grown 24% and EBITDA has doubled so it has given us the confidence to expand in new regions.

Your review?
Printo is now in six cities: Bengaluru, Chennai, Pune, Hyderabad, Gurgaon and New Delhi. Balu set some aggressive targets and guided the team to deliver them. 

Next 12 months. The worst-case scenario and best-case scenario?
A year is too short to call but we expect to grow at 25%. We always prepare for a worst-case scenario irrespective of the outlook. And as long as Indians do not listen to our politicians, India will do well in the coming decade. 

Any more on the M&A front?
Yes. We have evaluated over a dozen companies in the last two years and another announcement will be made very soon.