Design Group Share News (IGR)

(Sharecast News) - IG Design said on Tuesday that it has agreed to buy US gift packaging supplier Impact Innovations for £56.5m.The AIM-listed company, which designs and manufactures celebration, gifting and creative play products, also said it has raised £50m through a placing of 9.8m shares at 510p each to help fund the deal.IG Design said the acquisition will create the world's largest consumer gift packaging business and deliver "significant" earnings accretion in each of the next three financial years and synergies in excess of $5m by year three. In addition, it will enable expansion into the growing and adjacent seasonal décor product category both in North America and in established Design Group markets around the world.For the year to the end of December 2017, Impact Innovations recoded underlying earnings before interest, taxes, depreciation and amortisation of $15m on revenues of $155.9m.It is estimated that the combined business will account for 22% of the overall consumer gift packaging market in the USA and Canada.Chief executive officer Paul Fineman said: "The combination of Impact Innovations with Design Group not only doubles the scale of our business in the Americas, it further enhances the overall performance and growth potential of our whole group whilst continuing to illustrate our delivery of the group's stated strategy."We are delighted to be acquiring a business that has a strong track record of consistent robust financial performance and cash generation through providing great product and category management expertise to its customers. As a combined group, we have a significant opportunity to capitalise on our now enlarged scale and breadth of offering to our customer base of many of the world's largest and most successful retailers."The company also gave a very brief update on trading, which it said has been strong in the current financial year to date, while its full-year financial forecast remains in line with management expectations.At 0930 BST, the shares were up 3.9% to 543.40p.