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National Pen Looks to Click With Its Buyer

If corporate acquisitions really are the marriages they sometimes purport to be, is it a sign of infidelity when a recently purchased company indicates it wants to continue playing the field, so to speak?

Perhaps not in the case of National Pen Co. LLC, the San Diego-based maker and marketer of customized promotional products.

As of a few months ago, National Pen was looking to pick up at least two other companies within the next three years. President and CEO Peter Kelly told the San Diego Business Journal in June he wanted to buy companies that could broaden the company’s offerings, particularly in the area of e-commerce, customizable bags and drink ware.

That was before the Dec. 12 announcement that National Pen will be acquired by Cimpress N.V., a world leader in mass customization, for $218 million. The Dutch-based company said it was impressed by National Pen’s ability to serve small and medium-size companies with minimum orders of writing instruments and other customized products.

For National Pen, the union satisfies — at least in part — a need for e-commerce capabilities to complement its existing strengths in direct mail, telephone and e-mail sales channels.

Still Running the Business

But the San Diego company’s desire to acquire hasn’t faded so much as it has been delayed by the more immediate need to integrate once Cimpress takes ownership by year’s end.

Cimpress has told National Pen it can continue to operate independently, which Kelly interprets as permission to check out other companies even if they overlap somewhat with the Dutch company’s competencies.

People representing the new owner “made it clear they don’t want to run our business,” he said. Although Cimpress wants to share resources wherever possible, Kelly said, “we still need to run our business as we normally would.”

National Pen doesn’t want to appear ungrateful. The 50-year-old company, owned by a private equity group for more than a decade, sees benefits to joining with a company it sees as the “ultimate performer in the e-commerce space.”

“We solved that problem in one hit,” Kelly said.

What’s more, the two have much in common, from an emphasis on customization to a focus on small and medium-size companies to their international scope (Cimpress operates globally, while National Pen has locations in Tennessee, France, Ireland and Mexico).

“We can really learn and share a lot across both of our organizations,” Kelly said.

He said if National Pen does find a potential acquisition — and such moves are “constantly” being contemplated, he added — it would only move forward with Cimpress’ blessing.

Expected to Stay Locally Based

Cimpress’ director of corporate communications, Cheryl Wadsworth, emphasized that the incoming owner hopes to make its entire portfolio of products available to National Pen. But she said Cimpress is open to acquiring companies whose capabilities would be difficult for it or National Pen to develop on their own.

She and Kelly would not speculate on the timing or nature of any possible future purchases.

Whatever acquisitions do or don’t occur in the midterm, National Pen is not expected to change much in the eyes of its customers.

With about 1,800 employees total, including about 180 in San Diego, the company is expected to stay locally based.

For now, National Pen expects to stay busy with the decidedly domestic task of loading its products onto Cimpress’ online platform, which Kelly characterized as more sophisticated than the “off-the-shelf” system his company still uses.

Cimpress, for its part, remains unsure of the degree to which it might try to tap National Pen’s expertise in direct mail and telesales. Wadsworth said in an email the integration process will work itself out over time.

“We believe both Cimpress and National Pen will mutually benefit from this relationship,” she wrote, “but it’s too soon to predict if or when any of the other businesses in our portfolio will leverage National Pen’s capabilities.”

She added, “Our businesses operate with a high degree of autonomy and determine how they go to market and serve the needs of their customers.”

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