The demand for cushy workspaces is on the rise as companies, like ergonomic furniture producer Inventis (ASX: IVT), witness increasing profits. To maintain this growth momentum, the Company has announced the acquisition of commercial furniture manufacturer Open Projects Group (OPG), which specialises in the design and supply of custom office tables, joinery and industrial kitchens. 

To start off, the Company will be buying 80% of OPG, acquiring it fully in five years. This agreement is subject to an exclusive 45-day due diligence and final board and finance approvals. Inventis will pay $3.4 million in cash over two years and issue $200,000 of IVT Group shares at WASP (weighted average selling price) for 80% of OPG. The Company will be tapping into its own cash reserves to fund $1 million of the $3.4 million, while the rest will be covered by external funding.

Pointing to OPG’s role in Inventis’s growth strategy, Group Managing Director Anthony Mankarios shared, “OPG has annual revenues of over $20 million with circa $4M normalised Earnings before Interest depreciation and amortisation and currently has an open order book of more than $14M. It will provide additional growth opportunity to fuel our Group networks annual sales.” 

Currently, OPG provides furniture in the hospitality and office sectors. Its ventures align with the Company’s national showroom presence and allow for integration in design and supply nationally into the Government and Private Healthcare and Corporate office furniture market.

Following the acquisition, vendor Kane McCarthy will remain on board with equity of 20% and will continue as the principal director of operations of the OPG business. He commented, “I see this as an opportunity to grow OPG with a motivated and experienced national partner in the Inventis Group.” 

McCarthy will also enjoy an earn-out right to an additional 8.5%. This is subject to OPG achieving over 10% year on year growth each year for revenue and profit targets. This would then see Inventis Group holdings of OPG potentially at 71.5%, but still with the right of acquiring up to 100%. 

According to Inventis, this is a win-win situation for both parties. Chairman Dr Tony Noun expressed his pleasure with this acquisition, saying, “I am pleased with the Group’s direction, it’s year on year growth during the pandemic and the opportunity to deliver accretive growth. Our Group Network Sales will potentially reach a new milestone of over $50 million pa with growth in an aligned business, this will bring about further synergies which will complement our national expansion strategies. The Board and Management are pleased with the opportunity to align our existing Group culture and values of doing what we say with the vibrant energetic team at OPG.”

Inventis boasts a range of smart furniture that might not look appealing but seem to be making an impact. In fact, in FY22, the Company’s profit increased by 260% to over $276k. The OPG acquisition is a nod to Inventis’s agenda for 2023, which entails a focus on mergers and acquisitions. It will be interesting to see which other companies come under its wing and how they will transform the Company’s current offerings.