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It’s Back to School Time - August 2018 M&A Activity

September 7, 2018, 8:51 pm
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As the summer wraps up and our younger generation heads back to school, the printing and related industries are getting ready for their own education. Now begins the annual parade of executives, managers and our best and brightest employees, leaving behind the daily grind of the office and production floor to attend one or more dazzling events and marvel at and learn about the latest technology for putting ink on something. It’s trade show season, a good time to pause and take stock of the changes occurring in the industry.

As readers of The Target Report know, we view the industry from the perspective of transactional activity. Over the past seven years, we have reported on the robust merger and acquisition activity in the printing, packaging and related industries. In some segments, that actively tells us that opportunities are excellent and well-heeled buyers are seeking to put their capital to work and invest in growing markets. Conversely, significant transactional activity in other segments, especially when correlated with data on bankruptcy filings and plant closures, is a very good indicator that the collective market place is getting tougher and owners are deciding that it’s time to exit.

We went back to the data we have collected and reported to you over the past two years; we reviewed, categorized, sorted, counted and charted that data. One thing became abundantly and surprisingly clear – the trends are amazingly consistent year-over-year (albeit with a few exceptions) even to the extent that we logged exactly the same number of merger and acquisition transactions during the trailing twelve-month periods (“TTM”) ended August 31st in each of the past two years – 227 to be exact.



As we have often discussed in previous Target Reports, general commercial printing companies consistently rank high in the number of deals announced, followed closely by packaging companies (labels, folding cartons, flexible packaging and corrugated cartons). Activity in the wide format segment increased notably this past year – and when financial data was disclosed, several deals in the wide format segment sported multiples about two turns higher than their cousins in the offset commercial printing segment. In the publishing segment, activity was brisk and increased this past year compared to the prior year, mostly driven by deals in which community and regional newspapers changed hands.



When we looked at the seasonality of transactional activity, as shown in the chart above, the two past years differed notably in October, with a pronounced dip right before 2016 presidential election and a bump up in the same month the following year. June of this year was, for unexplained reasons, particularly quiet and tied for the lowest deal count in any one month since we began researching and writing The Target Report in 2011. Inexplicably, June of the prior year was the most active month we have recorded.

As noted earlier, transactional activity tells us that change is afoot, but is that activity indicative of positive or negative change? To try and answer that question, we track and look at both the number of bankruptcy filings and the number of non-bankruptcy plant closures.



Since very few companies in our industry survive a bankruptcy filing, especially the smaller companies, we can safely state that most of these companies ended up closing and the residual revenues flowed to a stronger competitor, either through a tuck-in transaction or via general marketplace assimilation. Many of the bankruptcies we noted were Chapter 7 filings, in which a trustee is appointed, and therefore we know that those companies were liquidated with no opportunity for survival. As we can see from the data, general commercial printing companies lead the pack with the most bankruptcy filings, year-over-year. We also note the negative implication for the publishing industry when we correlate the bankruptcy data with the number of M&A transactions. We have started to see some bankruptcy filings in the wide format segment (one of which this past year was of significant size), indicating that the “bloom may be off the rose” and the market for wide format printing services is getting more competitive. The spike in the materials manufacturing category was driven by both paper and ink companies filing. There were very few bankruptcies in the packaging industry segments, indicating that the robust M&A activity is a sign of positive momentum for packaging.

We also track activity in non-bankruptcy plant closures, in the chart below, which may or may not mean that the company is closing (the big consolidated printing companies, Quad and RRD, for example, close plants to rationalize production capacity, but the company goes on). Again, sadly, general commercial printing companies are far and away the leaders in closing printing facilities this way. As might be expected, several binderies, book printing and newspaper printing companies closed up shop.



We also took a look at the seasonality of bankruptcies and non-bankruptcy closures. As we can see in the chart below, printing companies overwhelmingly file bankruptcy right after the New Year and at the start of the summer season, both times when collectible receivables are likely to be higher after the typically busier seasons for printing companies, and before the winter or summer doldrums bleed cash from a struggling company.


And lastly, below is the picture of how non-bankruptcy plant closures occur on a seasonally-tracked basis. Interestingly, a different pattern emerges in these closures, as compared to bankruptcies, with clear peaks occurring right in the middle of the times when most printers are busiest. A good assumption might be that these companies were hopeful that the busy season would produce sufficient cash flow to save the day, but the work was not enough to fill their coffers and they simply ran out of gas



See you at the shows!

Mark Hahn, the author of The Target Report, will be speaking about M&A in the printing and related industries at noon on September 30th at the Print 18 trade show in Chicago. Mark will be available to meet privately by appointment from Sunday afternoon to Wednesday at the McCormick Place convention center. Email mark@graphicartsadvisors.com

2018 August - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries  

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
Universal Mailing ServicesNo DataPiscataway, NJPrompt DirectNo DataStaten Island, NY8/29/18No DataAcquisition
(Graphic Arts Advisors)		Mailing servicesLink
Alcom Printing GroupNo DataHarleysville, PAGreat Atlantic GraphicsNo DataLansdale, PA8/28/18No Data363 Sale in Ch. 11Commercial printingLink
AWT Labels & Packaging
(Port co. mason Wells)		No DataMinneapolis, MN Citation Clinical Labeling SystemsNo DataHauppauge, NY8/20/18No DataAcquisitionClinical trial labelsLink
Deluxe$1,970Shoreview, MNRemittance processing
(Div. First Data Corporation)		No DataAtlanta, GA8/16/18No DataAcquisitionFinancial processing systemsLink
Graphic Systems ServicesNo DataSpringboro, OHIndependent Press SupplyNo DataWest Babylon, NY8/15/18No DataAcquisitionPress parts distributorLink
MailPixNo DataHuntington Beach, CAPrintShopLab
(Div. Photobucket Corp.)		No DataDenver, CO8/14/18No DataAcquisitionPhoto booksLink
Brookstone PrintingNo DataMenomonee Falls, WIBadger Press & PhotographicsNo DataKenosha, WI8/14/18No DataAcquisition
(New Direction)		Commercial printingLink
Labelink
(Port co. Parkview Capital)		No DataMontreal, QCSafety Seal PlasticNo DataGuelph, ON8/13/18No DataAcquisitionLabel printingLink
Lindenmeyr Munroe
(Div. Central National Gottesman)		$5,500Purchase, NYOlmsted-Kirk PaperNo DataDallas, TX8/13/18No DataAcquisitionPaper distributionLink
The Sourcing Group$83.0New York, NYTransform$7.0Atlanta, GA8/8/18No DataAcquisitionPrint distributorLink
WestRock$16,110Norcross, GASchlüter Print Pharma PackagingNo DataSchönebeck, Germany8/8/18No DataAcquisitionPharma inserts & packagingLink
Amcor$9,320Victoria, AustraliaBemis$4,100Neenah, WI8/6/18$6,800Stock mergerFlexible packagingLink
Adams Publishing GroupNo DataMinneapolis, MNBoise WeeklyNo DataBoise, ID8/2/18No DataAcquisitionCommunity newspaperLink
TriboroMassachusetts News MediaNo DataAttleboro, MASun Chronicle & Fox Reporter
(Prop. United Communications)		No DataKenosha, WI8/2/18No Data
Acquisition
(Dirks, Van Essen)		Community newspapersLink
Volaris GroupNo DataToronto, ONAleyantNo DataWheaton, IL8/2/18No Data
Acquisition
(Tennant & Russell)		MIS system for printingLink
Toppan Leefung / Vintage
(Div. Toppan Printing)		No Data
($13,120)		New York, NY
(Tokyo, Japan)		Transaction & Compliance Div.
(Sub. Merrill Corporation)		No DataSaint Paul, MN8/1/18No DataAcquisitionFinancial reporting servicesLink
HP Inc.$57,030Palo Alto, CAApogee$224.9Maidstone, UK8/1/18$494.6AcquisitionManaged print servicesLink


2018 August - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
No Chapter 11 Filings Found this Month---------------------------
Chapter 7 Filings:
No Chapter 7 Filings Found this Month---------------------------


2018 August - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
The Village Voice8/31/18No DataNew York, NYNoneN/A8/31/18Alternative newspaperLink
Marco Book Co11/7/18No DataLodi, NJNoneN/AAug-18BookbindingLink
USA Docufinish9/13/18No DataYorkville, ILNoneN/AAug-18Label printingLink
Cricket Press9/12/18No DataManchester-by-the-Sea,
MA		NoneN/AAug-18Commercial printingLink
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Cimpress: Getting Bigger by Staying Small - September 2018 M&A Activity

October 7, 2018, 3:18 pm
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Cimpress, the corporate parent of Vistaprint, announced the acquisition of BuildASign, an online printing service that specializes in yard signs, banners, magnetic vehicle signs, and fabric banners. The acquired company includes the companion business EasyCanvasPrints, an online seller and producer of printed wall décor. Both the signage and the wall décor websites are perfectly aligned with the Cimpress strategy of “mass customization” of printed items served up online at the micro customer level. In a sure signal that Cimpress sees the consumer market as the next frontier of customized printed items, the emphasis in the official press release about the transaction is focused on the “fast-growth canvas-print wall décor” segment while “reinforcing the market position” in business signage.

The cash transaction values the BuildASign company at $280 million, a multiple of 2.17 times trailing twelve-month (TTM) revenue of $129 million. EBITDA of the acquired company was not disclosed, however the multiple of EBITDA paid was described as consistent with the price Cimpress has paid for its past acquisitions. One analyst estimated the multiple paid for BuildASign at “high-single or low-double digits” times TTM EBITDA. The implication is that the acquired company was producing EBITDA somewhere in the range of 20% of revenues, at the upper end of performance for most print-centric companies. Cimpress itself trades on the public markets in the high-double digits, expressed as a multiple of EBITDA.

The acquisition is clearly strategic for Cimpress which can utilize its expertise in online customized printed products to further grow the sign and décor segments of its business. Cimpress also expects that the acquisition will not only be strategic but will also meet its minimum internal rate of return of 15% for M&A investments. For many companies in the printing industry, it’s difficult to understand the EBITDA and enterprise values achieved by BuildASign. In our view, the company achieved its high value because it incorporates three of the “five D’s” where we see higher valuations awarded within the commercial printing segments: the printing technology is Digital, the product is related to Display, and the company understands and implements the Distribution of the printed product. (The other two D’s driving value in commercial printing are Data and Design.) And finally, there is scale. While many companies have online customer-facing proprietary software, the BuildASign and EasyCanvasPrints websites, with in excess of $100 million in revenue, were a unique opportunity in what has become a “me-too” crowded online web-2-print space. Size of the seller and the opportunity to move the needle at Cimpress is another factor that likely led to a higher multiple being paid for the company.

We noted in the last Target Report that the wide format industry is maturing and there have been a few bankruptcy filings in the segment. In our conversations with wide format print providers, many have reported pricing pressure at the lower end of the product offerings (small signs, banners, etc.). Digital wide format printing equipment is now more affordable and there is a considerable installed base of machines. Many commercial printing establishments now offer wide format printing. The acquisition by Cimpress, a highly efficient provider, will only increase pricing pressure at the bottom of the market where cost and ease of ordering is more important than personal-touch service. The larger and more sophisticated wide format providers are increasingly focused on providing value-added services such as image enhancement, image repurposing, onsite installation and managing the logistics required for large campaign launches.

In the competitive online market for printed products, it’s no longer enough to be in the market with sophisticated customer-facing software, even if the revenues are significant. Publicly traded CafePress, listed on the Nasdaq, was acquired by online photobook provider Snapfish. CafePress, a legacy company from the dotcom era that offers personalized items such as coffee cups and T-shirts, is described by the founder as a “pioneer offering personalized and custom merchandise.” The CafePress website claims to offer over “one billion items crowdsourced from a global community of more than two million independent designers.” Impressive statistics, but nonetheless, with negative profit margins, declining revenues, and negative EBITDA, the company was valued in the sale to Snapfish at $25 million, or only 0.32 times TTM revenues of $78.5 million. Online software is nice, personalization is good, printed items are still in demand, but when it comes to enterprise value in the printing industry, growth and profits matter most.

Commercial Printing and Diversified Services

New York-based Duggal Visual Solutions, a wide and grand format company that provides value-added services in the competitive high-end of the market, acquired NCG Visuals also located in New York City. The acquired company was originally a commercial printing company and adapted to the competitive market by transforming into a print production firm with expertise in wide format and environmental graphics.

Modern Litho, a regional serial acquirer of commercial printing companies headquartered in Jefferson, Missouri, announced the acquisition of Trio Printing in St. Louis, Missouri. The Trio Printing facility will cease operations and employees and production are moving to Modern’s existing facility in St. Louis. Modern established its presence in St. Louis when it acquired Midtown Printing in 2013, renamed as Modern Litho – St. Louis in 2014 and moved earlier this year into larger facilities. The company added a third hub to its multi-city strategy in July this year when it acquired James Printing, this time reaching westward to Kansas City, Missouri.

Graphic Village, also a serial regional acquirer, announced the acquisition of CTS Packaging in Covington, Kentucky. The acquisition crosses state lines for the Cincinnati, Ohio-based Graphic Village and also crosses the bridge into folding carton production for the formerly commercial printing and marketing services provider company. The multi-state status won’t last long, as the company has announced plans to consolidate the folding carton production into its Ohio facility, north of Cincinnati. CTS Packaging is the second acquisition this year for Graphic Village, following on the announcement in February that the company had acquired Newport, Kentucky-based commercial printing company Multi-Craft.

Quad/Graphics continued to add expertise outside its core competency of high-volume printing with the acquisition of Peppermint Warszawa, a creative agency in Warsaw, Poland. Company Chairman, President and CEO Joel Quadracci stated “Quad can fulfill traditional agency functions, such as creative and media strategy, and campaign creation, while also providing integrated marketing execution across multiple channels.” That’s a mouthful, but also makes it clear that Quad is strategically using M&A to move upstream and create corporate value by adding design services (and one of GAA’s five D’s defining higher enterprise value in the commercial print segments). In March of this year, Quad acquired digital marketing services company Rise Interactive and in February of 2018 Quad took a major step in its transition with the acquisition of marketing production services and marketing execution company Ivie & Associates (see The Target Report: Turning a Big Ship – February 2014).

2018 September - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries  

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
SnapfishNo DataSan Francisco, CACafePress$78.5Louisville, KY9/28/18$25.0AcquisitionPromotional itemsLink
KolbusNo DataRahden, GermanyAutobox MachineryNo DataBedfordshire, UK9/27/18No DataAcquisitionBox making equipmentLink
SGIANo DataFairfax, VAGraphics of America
(Prop. Florida Graphics Alliance)		No DataOrlando, FL9/27/18No DataAcquisitionPrinting trade showLink
OSG Billing Services
(Port co. Aquiline Capital)		No DataRidgefield Park, NJAppRevNo DataTemple, TX9/26/18No DataAcquisitionData analyticsLink
OSG Billing Services
(Port co. Aquiline Capital)		No DataRidgefield Park, NJBilling & payments business
(Div. Diversified Data & Consulting)		No DataFerndale, MI9/26/18No DataAcquisitionTransactional printingLink
Cimpress$2,590Venlo,
Netherlands		BuildASign
(Port co. PWP Growth Equity)		$129.0Austin, TX9/25/18$280.0AcquisitionWide format printingLink
Quad/Graphics$4,150Sussex, WIPeppermint WarszawaNo DataWarsaw, Poland9/24/18No DataAcquisitionCreative agencyLink
Adobe$8,570San Jose, CAMarketo
(Port co. Vista Equity Partners)		No DataSan Mateo, CA9/21/18$4,750AcquisitionMarketing automationLink
Wikoff ColorNo DataFort Mill, SCBraden Sutphin Ink CompanyNo DataCleveland, OH9/18/18No DataAcquisitionOffset & flexo inksLink
Konica Minolta$9,570Tokyo, JapanVeBridgeNo DataLexington, KY9/18/18No DataAcquisitionDocument managementLink
Duggal Visual SolutionsNo DataNew York, NYNCG VisualsNo DataNew York, NY9/17/18No DataAcquisitionWide format printingLink
Marc & Lynne BenioffNo DataSan Francisco, CATime Magazine
(Prop. Meredith)		No Data
($2,250)		Des Moines, IA9/16/18$190.0AcquisitionMagazine publisherLink
Ogden NewspapersNo DataWheeling, WVObserver PublishingNo DataWashington, PA9/12/18No DataAcquisitionCommunity newspaperLink
Schneps CommunicationsNo DataBayside, NYCommunity News GroupNo DataBrooklyn, NY9/12/18No DataAcquisitionCommunity newspaperLink
Plockmatic GroupNo DataStockholm, SwedenWatkiss AutomationNo DataSandy, UK9/11/18No DataAcquisitionBinding equipmentLink
PCI Commercial Packaging
(Div. PCI Pharma Services)		No DataPhiladelphia, PASherpa Clinical PackagingNo DataSan Diego, CA9/10/18No DataAcquisitionClinical trial packagingLink
OSG Billing Services
(Port co. Aquiline Capital)		No DataRidgefield Park, NJTeleReachNo DataPlainville, CT9/10/18No DataAcquisitionCall center servicesLink
OSG Billing Services
(Port co. Aquiline Capital)		No DataRidgefield Park, NJApplied Information GroupNo DataKenilworth, NJ9/10/18No DataAcquisitionDigital marketingLink
Adams Publishing GroupNo DataMinneapolis, MNCooke CommunicationsNo DataGreenville, NC9/7/18No DataAcquisitionCommunity newspaperLink
Deborah RobertsNo DataRichmond, VAPage Stationery
(Div. Worth & Higgins)		No DataRichmond, VA9/7/18No DataAcquisitionStationery printingLink
Hour Media GroupNo DataDetroit, MIGemini PublicationsNo DataGrand Rapids, MI9/6/18No DataAcquisitionRegional magazinesLink
SiegwerkNo DataSiegburg, GermanyUltra InksNo DataBois-des-Filion, QC9/6/18No DataAcquisitionFlexographic inksLink
Graphic VillageNo DataCincinnati, OHCTS PackagingNo DataCovington, KY9/5/18No DataAcquisitionFolding cartonsLink
Agfa Graphics$2,699Mortsel, BelgiumPrepress Business
(Div. Ipagsa Industrial)		No DataRubí, Barcelona (Spain)9/4/18No DataAcquisitionPrinting platesLink
Modern LithoNo DataJefferson City, MOTrio PrintingNo DataSt. Louis, MO9/4/18No DataAcquisitionCommercial printingLink
Williams Lea Tag
(Port co. Advent International)		No DataLondon, UKTaylor JamesNo DataLondon, UK9/3/18No DataAcquisitionDigital production servicesLink


2018 September - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
No Chapter 11 Filings Found this Month---------------------------
Chapter 7 Filings:
No Chapter 7 Filings Found this Month---------------------------


2018 September - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
USA Screen Printing10/23/18No DataOklahoma City, OKNoneN/ASep-18Garment printingLink
MPE Business Forms10/18/18No DataDeKalb, ILNoneN/ASep-18Forms printingLink
Chocklett Press10/17/18No DataRoanoke, VANoneN/ASep-18Commercial printingLink
A-1 Printing & Graphics Center10/2/18No DataSherman, TXNoneN/ASep-18Commercial printingLink
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A Reversal of Fortune: Paper Mills Gain Leverage - October 2018 M&A Activity

November 7, 2018, 12:58 pm
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The past two decades have been a turbulent time for the paper industry in the US and Canada, as producers closed mills in a frantic race to catch up with the downward demand for the printing grades of paper, from newsprint to high-end fine coated papers. The weaker paper producers declared bankruptcy and many paper mills ceased production. At the same time, the stronger players have been on a conversion binge, jettisoning the production of printing grades in favor of the paperboard and containerboard grades used to produce folding cartons, corrugated boxes and other types of packaging. (see The Target Report: Corrugated Gets Glam – May 2018). As the volume of printed communications declined, paper producers tried to get the supply curve to meet the downward spiraling demand curve for printing-grade papers. Some mills changed over to produce products for which demand cannot be siphoned off by the internet: tissue paper and toilet paper. At least one pulp mill converted to producing the “fluff” fiber used in disposable diapers and similar products.

From the printer’s point of view, paper supply was plentiful, and prices were incredibly stable. That has changed. Over the past several months, we have heard reports that some mills were simply not accepting new orders until their backlog clears. Coated paper production capacity is reportedly down at least 20% from 2016, and prices have moved correspondingly upwards by 20% or more. The price for wood pulp, the raw material for paper, has increased 23% versus the same time last year, and is up 45% or more since the bottom of the pricing cycle in 2016. Commercial printers have been forced to place orders well in advance, maintain higher inventories, and quote new orders “subject to” price and availability of paper.

In October, we noted a robust resurgent interest and investment in paper mills. However, the recent transactions do not spell relief for the commercial printing, newspaper or publication printing segments. Transactional activity in paper production has been focused on packaging grades in apparent response to the “Amazon effect” that is increasing demand for corrugated shipping cartons and the positive economy which is driving demand for consumer packaging.

ND Paper, the US subsidiary of Hong Kong-based Nine Dragons Paper, the world’s second largest containerboard producer behind US-based International Paper, announced that it is acquiring the shuttered Old Town Paper Mill in Maine. Concurrent with the acquisition, ND Paper disclosed plans to invest $25 million and restart production at the mill in the first quarter of 2019. The mill, which will be producing unbleached pulp for corrugated cartons, has been silent since 2015 when its owner declared bankruptcy and sold the mill in a 363 sale (see The Target Report: Specialties are Targeted, Mills Close and Consolidate – January 2015). The plans to reopen the mill at that time never materialized and there was talk of selling the mill for scrap. ND Paper also acquired two other US paper mills earlier this year, one in Rumford, Maine and the other in Biron, Wisconsin. Both of those mills were purchased from Canada-based Catalyst Paper. ND Paper recently announced that it would be investing $111 million to increase efficiency at the Rumford mill. While it is a positive sign that a mill is starting back up and investments are planned, printing companies relying on coated printing grades should not get too excited - ND Paper is converting a machine in Biron from coated printing grades to containerboard, and there is discussion in the industry that similar conversions may be in the future at Rumford.

The private equity owners of Catalyst Paper announced the sale of the business to Paper Excellence Canada, a recent entry into the papermaking business which has been acquiring paper mills in Canada, France and Germany. The sale includes Catalyst’s three remaining mills, a distribution center and headquarters facility. Paper Excellence Canada produces pulp, printing papers and packaging grades, and is focused on exporting its products to Asia and in particular to China.

New York-based private equity firm Lindsay Goldberg acquired the specialty paper business of paper manufacturer Glatfelter in October. Lindsay Goldberg has rebranded the spun-off paper products company as Pixelle Specialty Solutions. Glatfelter, known for many years for its cream-colored text papers used primarily in book manufacturing, continues on as a global engineered materials company producing filtration, hygiene and other fiber-based products. Established during the civil war when Philip Glatfelter acquired the bankrupt Howard Paper Company in Spring Forge, Pennsylvania, the original purchase included a shuttered stone mill building with one small paper machine. In a distant echo of today’s squeeze in the pulp markets, the former owner had been forced into insolvency by the shortage of linen rags due to the war (papermaking from wood-based fibers was still in its infancy at the time).

Carthage, New York-based Carthage Specialty Paperboard, which filed for chapter 11 bankruptcy in February 2018, was acquired by Ox Industries. The acquiring company was not the highest final bidder but emerged as the winner in the Bankruptcy Court 363 sale process due to its superior demonstrated financial ability to close the deal. Ox Industries has eight plants across several states, and manufactures paper tubes and cores, and paperboard.

New-Indy Containerboard, based in Ontario, California, has acquired Resolute Forest Products’ paper and pulp mill in Catawba, South Carolina. The acquired mill has two idle papermaking machines, formerly configured to produce coated printing paper, but given the focus of the acquiring company on packaging grades (check out the company name of the buyer), its likely those machines will be restarted to produce containerboard, not printing grades. Presumably, printing companies that are struggling to procure sufficient paper are hopeful that the currently active machine at the Catawba mill will continue to produce coated printing grades, at least until more supply comes online (not in sight at this time) or demand falls further (likely, but not what we hope for), and the supply and demand come back into balance.

Book Printing

CJK Group, which has been rolling up companies in the book manufacturing segment, cut short the plans of erstwhile competing book industry consolidator Printing Consolidation Co. (“PCC”) with the acquisition of PCC’s two companies, Dickinson Press and Kingsport Book. Dickinson Press is noted for its specialty printing of books on very lightweight papers, including bibles, educational and business books. Kingsport Book brings specialized finishing into the CJK family. Both companies will be rolled into CJK’s game changing acquisition earlier this year of The Sheridan Group (see The Target Report – Legacy Printing Companies Fade Into History).

North of the border, Marquis Book Printing now claims to be Canada’s largest book printing company, based on its acquisition of Webcom. The acquired company utilizes traditional offset and digital inkjet printing to offer complete end-to-end book production to reduce inventories, including its BookOnDemand service. Marquis reports that the combined companies now have capacity to produce over 100 million books annually in its three plants.

Lots of ink has been spilled in the past several days about the announced acquisition of LSC Communications by Quad/Graphics, with much more to come we’re sure as that deal works its way through regulatory hurdles. LSC has been strategically acquiring distribution companies to augment the printing assets which were included when it was spun off from RR Donnelley (see Transformation and Rebirth – July 2017 M&A Activity), including the acquisition earlier this year of RR Donnelly’s print logistics business. LSC has also been moving upstream in electronic content, exemplified by its acquisition of MAZ Systems in July this year (see The Target Report: If you Can’t Beat ’em, Join ’em). All of those acquisitions now become part of the Quad/Graphics family which will replace RR Donnelley as the largest US-based printing company, including LSC’s significant book production capabilities.


2018 October - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries  

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
Lindsay GoldbergNo DataNew York, NYSpecialty papers business
(Div. Glatfelter)		No Data
($1,800)		York, PA10/31/18$360.0AcquisitionSpecialty paper millsLink
Quad/Graphics$4,150Sussex, WILSC Communications$3,810Chicago, IL10/31/18$1,400AcquisitionMagazine & book printingLink
TrucolorNo DataGreenville, SCPrint Division
(Greenville Office Supply)		No DataGreenville, SC10/29/18No DataAcquisitionPrinting & copyingLink
Ricoh$18,720Tokyo, JapanLAC CorporationNo DataTokyo, Japan10/26/18No DataAcquisitionIndustrial printingLink
Charter Oak EquityNo DataWestport, CTLicaplast Industries EmballagesNo DataSaint-Laurent, QC10/25/18No DataMngt. BuyoutFlexible packaging, films, bagsLink
PLI Card Marketing Solutions
(Port co. Platinum Equity)		No DataLas Vegas, NVHarvard Card SystemsNo DataCity of Industry, CA10/22/18No DataAcquisitionPlastic card printingLink
Ox IndustriesNo DataHanover, PACarthage Specialty PaperboardNo DataCarthage, NY10/20/18$9.9363 Sale in Ch. 11Paperboard millLink
Hearst$10,800New York, NYHersam Acorn NewspapersNo DataRidgefield, CT10/18/18No DataAcquisitionCommunity newspapersLink
Brook & Whittle
(Port co. Snow Phipps Group)		No DataNorth Branford, CTPrime Package and LabelNo DataSt. Louis, MO10/18/18No DataAcquisitionLabel printingLink
Sterling North AmericaNo DataHauppauge, NYOcean Group$4.0Ronkonkoma, NY10/17/18No DataAcquisition
(Graphic Arts Advisors)		Commercial printingLink
Graphic Solutions GroupNo DataDallas, TXSpectrum Screen Printing SuppliesNo DataBig Bend, WI10/16/18No DataAcquisitionScreen printing suppliesLink
Premier PressNo DataPortland, ORJTW PartnersNo DataPortland, OR10/11/18No DataAcquisitionGraphic production servicesLink
ND Paper
(Sub. Nine Dragons Paper)		No DataOak Brook Terrace, IL
(Hong Kong)		Old Town Paper Mill
(Prop. OTM Holdings)		$0.0Old Town, ME10/10/18No DataAcquisitionKraft paper millLink
SummaNo DataGistel, BelgiumCadCam TechnologyNo DataNottingham, UK10/10/18No DataAcquisitionLaser cutting equipmentLink
Paper Excellence CanadaNo DataRichmond, BCCatalyst Paper
(Port co. Oaktree Capital)		No DataRichmond, BC10/9/18No DataAcquisitionPaper manufacturingLink
CJK GroupNo DataBrainerd, MNKingsport Book
(Port co Blackford Capital)		No DataChurch Hill, TN10/8/18No DataAcquisitionBook binding servicesLink
CJK GroupNo DataBrainerd, MNDickinson Press
(Port co Blackford Capital)		$35.0Grand Rapids, MI10/8/18No DataAcquisitionBook printingLink
Felix Schoeller NANo DataPulaski, NYAlamedaNo DataAnaheim, CA10/8/18No DataAcquisitionGraphic supplies distributorLink
Marquis Book PrintingNo DataMontmagny, QCWebcomNo DataScarborough, ON10/3/18No DataAcquisitionBook printingLink
Sherwood PrintersNo DataMississauga, ONPrinter GatewayNo DataMississauga, ON10/2/18No DataAcquisitionCommercial printing (trade)Link
New-Indy ContainerboardNo DataOntario, CAPaper & Pulp Mill
(Prop Resolute Forest Products)		No DataCatawba, SC10/2/18$300.0Asset acquisitionKraft & coated paper millLink
Gerber TechnologyNo DataTolland, CTMCT DigitalNo DataMilwaukee, WI10/2/18No DataAcquisitionDigital cutting equipmentLink
Heidelberg$2,860Heidelberg, GermanyMBO Group$57.0Oppenweiler,
Germany		10/2/18No DataAcquisitionBindery equipmentLink
Sign-Zone
(Port co. Pfingsten)		No DataBrooklyn Center, MNJansen Display GroupNo DataPřestanov,
Czech Republic		10/2/18No DataAcquisitionDisplay & signage hardwareLink
Rohrer
(Port co. Shoreview)		No DataWadsworth, OHTransparent ContainerNo DataAddison, IL10/1/18No DataAcquisitionPackaging, folding cartonsLink
Green Bay PackagingNo DataGreen Bay, WICitadel IndustriesNo DataAurora, IL10/1/18No DataAcquisitionPressure-sensitive stocksLink


2018 October - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
No Chapter 11 Filings Found this Month---------------------------
Chapter 7 Filings:
Dzign Displays, LLC10/22/18No Data18-30988Chester, NJ3rdNew Jersey
Newark		John K. Sherwood Scott S. Rever Trade show exhibits
Medallion Press, Inc.10/18/18No Data18-29298Aurora, IL7thNorthern IL
Chicago		Janet S. BaerE. Philip GrobenPaperback book publisher
Print & More Associates, Inc.10/2/18No Data18-13717Mattapoissett, MA1stMassachusetts
Boston		Joan N. FeeneyGary W. Cruickshank Print & promo distributor


2018 October - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
James E. McGirr11/15/18No DataPlymouth, MANoneN/AOct-18Commercial printingLink
Bethany Printing Company11/28/18No DataLamoni, IABethany Republican ClipperBethany, MOOct-18Consolidating printing in other plantsLink
Agfa Graphics - Plate facility12/31/18No DataBranchburg, NJAgfa GraphicsMortsel, BelgiumOct-18Printing plate manufacturingLink
Rex Publishing / Parish Service11/14/18No DataFarmington Hills, MINoneN/AOct-18Book & diary printingLink
Matlet Group10/8/18No DataPawtucket, RINoneN/A10/8/18Folding cartons, menu printingLink
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The Waning Fortunes of the Time Inc. Magazines - November 2018 M&A Activity

December 6, 2018, 7:31 pm
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A Thai businessman owns Fortune Magazine. 

A dot-com billionaire owns Time Magazine.

The widow of Apple’s founder owns The Atlantic Magazine.

A retail disruptor (and wealthiest person on earth) owns The Washington Post.

Never heard of Chatchaval Jiaravanon, the Thai businessman whose family controls Charoen Phokkhaphan, the largest conglomerate based in Thailand which employs over 300,000 people in over 30 countries? Neither had I until learning that he stepped up and paid $150 million for the iconic chronicle of American industry and business, Fortune Magazine. The Thai billionaire apparently jumped into the bidding when Marc Benioff, founder of software company Salesforce, switched gears and decided to buy Time Magazine instead of Fortune.

Fortune Magazine has been my window into the world of big business since I first subscribed in 1980. I’ve read every issue since, cover-to-cover. The articles in Fortune have been extraordinarily insightful and topical, the research, writing and graphic design top-notch. Even though Fortune is not focused on the smaller privately-held companies that I have owned and/or worked for, the larger companies featured in the pages of Fortune were my customers and those companies set the macro-economic trends that influenced my business life.

Over the past couple of years, as advertisers have moved their advertising budgets from the printed page to digital channels, Fortune magazine has gotten thinner, the paper lighter, and the deep journalistic dives fewer. Recent issues have featured more “sponsored” content, code for advertising disguised as an editorial piece, replete with copy that drones on about the wonders of doing business in Dubai or some other inane topic. If my subscription was not on auto-renew, I suspect that my decades-long habit of reading Fortune on my lunch break would have ended with nary a blip in my routine.

My collection of antique Fortune magazines offers an amazing journey into history; history written as it occurred. In one of the very early issues, November of 1931, the topics covered included: government intervention in farm productivity, the politics behind the growing Port of New Orleans, an accounting of war reparations from World War I, the new unemployment relief programs, the Cleveland orchestra (with color illustrations of each instrument), Soviet propaganda posters, deep sea salvage, outfitting the babies of the wealthy (after all, the magazine was named Fortune), the rising economy of Brazil, and a photo essay of Europe’s top statesmen caught in casual poses (including Mussolini scowling at his guests over coffee).

If it’s possible, the advertising might even be more interesting than the editorial: furs, furniture, clothing, top hats, horse riding kits, cruise lines, exotic travel destinations (Miami and Hawaii were exotic at that time), yachts, and fine art. These products were among the ads in the November ’31 issue, all aimed at the top earners in society. Other ads were more industrial: plugging the makers of aluminum, brass, bolts, pipes, ball bearings, cars, trucks, and cement. Banks and insurance companies were vying for attention. The back cover, clearly the most expensive advertisement in the book, featured a handsome football player and two very fashionable adoring young ladies enjoying their Camel cigarettes under the headline “something worth cheering about.”

Of special note to those of us in the printing industry, paper manufacturers such as Crane’s Bond, Gilbert Paper and Kimberly-Clark advertised often in the early issues of Fortune to reach the top echelon of American business. Fine writing paper was touted as a necessity promoting the image of a successful company. The cover of November ’31, one of my favorites, was not an illustration of a ship, a plane, a train, or a steel furnace, but rather the image portrayed was that other important driver of economic growth, the printing press, turning out an issue of The Saturday Evening Post.

Without exception, the billionaires, the new owners of these iconic American titles, have vowed to stay out of the editorial side of the enterprise. Their statements are refreshing, especially after all the thrashing about at Time, Inc. over the past several years that management was breaking down the walls between the editorial and business departments, eliminating the firewall between “church and state” that has sustained an editorially independent press. We need a new model of support for the free press, and what appears to be emerging is ownership of these publications by people who are so wealthy that they can sit by and sustain the losses incurred by these broad-based general interest publications. The notion of a billionaire-supported free press is suspect, at least in my opinion, since the century-old advertiser-supported model relied on a constantly evolving and very diverse foundation of revenue sources, none alone so powerful that they could suppress the robust independent journalism we have enjoyed for so long. The new mogul-supported model concentrates the financial support in the hands of a very select few, however well-meaning their initial intentions.

Printing and Creative Services

After its print-affirming acquisition of LSC communications, announced last month, Quad/Graphics got back on course with its “Quad 3.0” strategy, announcing the acquisition of Periscope. The acquired company appears to have all the hallmarks of an upscale, hipster, chic, creative agency in a sophisticated urban setting, complete with rooftop garden meeting area and open work spaces (lest you doubt my “hipster-chic” characterization: no less than six dogs are featured prancing around the office in the one-minute intro video on the website). The Periscope deal mirrors Quad’s September acquisition of Peppermint Warszawa, an upscale creative agency in Warsaw, Poland.

Quad took baby steps into creative digital services back in 2014 when it acquired Brown Printing as part of its “Quad 2.0” strategy of consolidating the large printer segment of the industry. In that transaction, Quad landed the digital and mobile agency Nellymoser, which Brown had previously acquired (see The Target Report: Is the Printing Industry Devolving or Evolving? – March 2013), eventually rolling Nellymoser into its homegrown BlueSoHo creative production boutique.

A much bigger step, really more of a leap, was accomplished earlier this year when Quad acquired Ivie & Associates, the Texas-based marketing production services and marketing execution company (see The Target Report: Turning a Big Ship – Quad/Graphics Acquires – February 2018). Also in line with the “Quad 3.0” strategy was the acquisition of digital marketing services company, Rise Interactive, announced in March of 2018.

Joel Quadracci, chairman of Quad/Graphics, in the press release announcing the Periscope deal, proclaimed that the acquisition will create an “integrated end-to-end marketing platform that we believe will create more value than the traditional siloed agency approach.” Of course, the big advertising agencies (and let’s not exclude the global print management companies) are not waiting around quietly while Quad conquers the higher ground on the creative process ladder. I can hear the retort coming – what could be more siloed than a large capital-intensive, heavy-machinery, industrial printing company trying to integrate with a human-intensive, young, hip, group of creatives that bring their dogs to work and walk out the door at the end of every day?

While I wouldn’t bet against Quad succeeding to carve out a space somewhere in-between the top creative agencies and hard-core industrial-strength printing, it’s clear that Quad is covering its bet on the “3.0” creative strategy with the game-changing and much larger pending acquisition of LSC Communications. When that transaction is complete, Quad will instantly vault to the number one position and become the biggest printing and publication logistics company in the US.

On a much smaller scale than Quad, Firespring, headquartered in Lincoln, Nebraska, continued its evolution into a one-stop marketing services provider with the acquisition of Evol Empire Creative. Evol, as the acquired company is known, specializes in interactive digital, website design and video production. Firespring has grown through a series of acquisitions, including the August 2016 purchase of Jacob North Media Solutions which brought significant print capacity and expertise to the group. That same month, the company acquired an online crowdfunding platform, Deposit a Gift, bringing a unique fundraising service to its focus on the non-profit sector. Firespring has its roots in printing, originating in 2015 as a mash-up of five small printing companies. Mailing services were added shortly after the initial formation of the company with the purchase of On-Time Marketing. Firespring now has more than 200 employees and appears to be delivering on the concept of what a marketing service provider can become, a creative force in its market while still maintaining a strong core print component.

Labels

Private equity interest and activity in the label printing segment remains very strong. Fortis Solutions Group, a portfolio company of Main Post Partners, announced a double header deal with the acquisition of Premier Georgia Printing and Labels located in Flowery Branch, Georgia and the Austin Label Company located in Austin, Texas. The Georgia company also produces folding cartons.

Resource Label Group, with the backing of First Atlantic Capital, acquired Spectrum Label in Hayward, California. The acquired company produces pressure sensitive labeling. Two weeks later, Resource Label Group acquired Best Label, located in Cerritos, California. Best Label also produces pressure sensitive labeling, using letterpress, flexo and digital printing processes. (For more, see The Target Report: Private Equity LOVES Labels – August 2016).


2018 November - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries  

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
Higher Information GroupNo DataHarrisburg, PAArmstrong PrinteryNo DataHarrisburg, PA11/30/18No DataAcquisitionPrinting & copyingLink
Zanders-Paper
(NuCo of Terje Haglund)		No DataBergisch Gladbach
Germany		ZandersNo DataBergisch Gladbach
Germany		11/30/18No DataAcquisition
(DE Insolvency Sale)		Specialty papersLink
American News Company
(Port co. Chatham Asset Mngt.)		No DataChatham, NJThe News Group
(Sub. Jim Pattison Group)		No DataSmyrna, GA11/29/18No DataAcquisitionMagazine distributionLink
OSI CreativeNo DataIrvine, CANew Dimension ResearchNo DataMelville, NY11/29/18No DataAsset acquisitionMerchandise displaysLink
Orora$3,083Hawthorn,
Australia		Pollack Packaging$260.0Grand Prairie, TX11/29/18$80.5AcquisitionCorrugated boxes & suppliesLink
Sampco CompaniesNo DataPittsfield, MAQualprintNo DataPittsfield, MA11/28/18No DataMerger
(Graphic Arts Advisors)		Commercial printingLink
Quad/Graphics$4,150Sussex, WIPeriscopeNo DataMinneapolis, MN11/27/18$132.5AcquisitionCreative servicesLink
PPC Flexible Packaging
(Port co. Morgan Stanley Capital)		No DataBuffalo Grove, ILTemkin InternationalNo DataPayson, UT11/26/18No DataAcquisitionFlexible packagingLink
FirespringNo DataLincoln, NEEvol Empire CreativeNo DataLincoln, NE11/18/18No DataAcquisitionCreative servicesLink
Resource Label Group
(Port co. First Atlantic Capital)		No DataMemphis, TNBest LabelNo DataCerritos, CA11/15/18No DataAcquisitionLabel printingLink
Penske MediaNo DataLos Angeles, CAArt Media HoldingsNo DataNew York, NY11/13/18No DataAcquisitionMagazine publisherLink
Ricoh$18,720Tokyo, JapanColorGATE Digital Output SolutionsNo DataHanover, Germany11/12/18No DataAcquisitionColor management softwareLink
Montagu Private EquityNo DataLondon, UKFlexographic Packaging Business
(Div. Eastman Kodak)		$1,510Rochester, NY11/12/18$390.0AcquisitionFlexo printing platesLink
Fortune Media Group
(Chatchaval Jiaravanon)		No DataNew York, NYFortune Magazine
(Prop. Meredith)		No Data
($2,250)		Des Moines, IA11/9/18$150.0AcquisitionMagazine publisherLink
BR PrintersNo DataSan Jose, CAEndpoint DirectNo DataDenver, CO11/9/18No DataAcquisitionDirect mail marketingLink
SieboldNo DataCoral Springs, FLDR Press EquipmentNo DataWoodridge, IL11/5/18No DataAcquisitionOffset printing press partsLink
Digital Room
(Port co. H.I.G. Capital)		No DataLos Angeles, CALogo SportswearNo DataWallingford, CT11/5/18No DataAcquisitionPromotional items & apparelLink
Resource Label Group
(Port co. First Atlantic Capital)		No DataMemphis, TNSpectrum LabelNo DataHayward, CA11/1/18No DataAcquisitionLabel printingLink
Fortis Solutions Group
(Port co. Main Post Partners)		No DataVirginia Beach, VAAustin Label CompanyNo DataAustin, TX11/1/18No DataAcquisitionLabel printingLink
Fortis Solutions Group
(Port co. Main Post Partners)		No DataVirginia Beach, VAPremier Georgia Printing and LabelsNo DataFlowery Branch, GA11/1/18No DataAcquisitionLabels & folding cartonsLink


2018 November - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
Rex Printing Company11/20/18No Data18-55671Sterling Heights, MI6thEastern MI
Detroit		Phillip J. ShefferlyJay S. KalishBook & diary printing
Chapter 7 Filings:
Wet Ink Printing, Inc.11/5/18No Data18-23000Cerritos, CA9thCentral CA
Los Angeles		Sheri BluebondMichael J. VariscoCommercial printing


2018 November - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Hagadone Printing Hawaii1/11/19No DataHonolulu, HIHagadone CorpCoeur d'Alene, IDNov-18Commercial printingLink
Essentra Packaging12/13/18No DataLargo, FLEssentra PackagingNottingham, UKNov-18Packaging & plastic card printingLink
Bartash Printing11/30/18No DataPhiladelphia, PANoneN/ANov-18Commercial & newspaper printingLink
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Consolidation in Commercial Printing Rolls On - December 2018 M&A Activity

January 6, 2019, 8:24 pm
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The roll-up consolidation process is in full swing and gaining momentum in the commercial printing segment. The Mittera Group, based in Iowa and operating plants as far flung as New Jersey, Long Island, Florida and Texas, as well as much closer to home in Wisconsin, announced the acquisition of the Kansas City operation of Henry Wurst, a web and sheetfed commercial printer.

The sale to Mittera is a sudden reversal for the Henry Wurst company, which was confident enough in 2015 to invest a reported $8 million in a new five-unit Goss Sunday 2000 press to modernize its high-volume heatset web printing capabilities. The new press went into production in mid-2016 and doubled the potential page output of the two older presses that were retired in the upgrade. The company president, commenting on the company’s first major investment in quite some time, stated that the new press “puts us back in the game.” Shortly thereafter, in early 2017, Henry Wurst announced the acquisition of Universal Printing, a similarly configured heatset and sheetfed commercial printer located in St. Louis, at the far eastern end of Missouri. In what was a clear consolidation play, the Universal production facility was shuttered, moving production to the renewed platform at Henry Wurst.

The purchase of Henry Wurst by Mittera follows a well-defined playbook in which the Iowa-based consolidator has grown by acquiring larger and larger commercial printing companies, some of which were roll-ups themselves of several venerable companies that had been proudly independent family-owned printing companies. As the prospects of the industry have changed, many of these companies have come on the market at discount. Today’s consolidators in commercial printing are picking up the pieces and rationalizing the excess production capacity by closing facilities and shedding less productive equipment. While the purchase price for Henry Wurst was not disclosed, it was widely known that the Mittera’s acquisition last year of New Jersey-based Earthcolor, itself comprised of several defunct printing companies, was a distressed sale under pressure from the company’s lenders. That deal was structured as a “composition” (i.e. an orderly non-bankruptcy sale of intangible assets and fixed assets, accompanied by a wind-up of the predecessor corporation). That transaction catapulted Mittera onto the national stage; now a leader among the emerging consolidators we noted in past reports (see The Target Report: The Roll-Up Returns (to Commercial Printing – September 2014).



Commercial Printing and Diversified Services

H.I.G. Capital, one of the largest global private equity funds, once again voted with its wallet and expressed confidence in the future of print, announcing the acquisition of Vision Integrated Graphics. Vision, as its now known, is a Chicago area data-driven direct mail marketing powerhouse, with ancillary marketing services, retail display print, and fulfillment services. This is a secondary private equity buyout for Vision, which was previously backed by Concentric Equity Partners.

At H.I.G. Capital, commitment to the print industry runs deep; the fund established a separate platform investment when it acquired Digital Room in January 2018 from venture capital firm Insight Ventures. With revenue in excess of $80 million, Digital Room has four production plants and a multitude of web-to-print website brands including UPrinting, NextDayFlyers, PrintPlace, PrintRunner and 48HourPrint. H.I.G. subsequently bolted Logo Sportswear on to Digital Room. The acquired company sells promotional items and apparel company, all via online e-commerce sites.

GSB Digital, headquartered in Long Island City, New York, provides print and litigation support services to the New York City market and announced the acquisition of Aldine Printing.* GSB will be assuming the production for Aldine’s customers, primarily financial, legal and fashion companies requiring high-end corporate identity and event products.

Aldine’s departure from Varick Street is the latest in a long line of printing company exits from the heart of the traditional printing district in Manhattan, now populated by swarms of Millennials working at tech start-ups, drinking lattes at Starbucks and grocery shopping at the new Trader Joe’s. Printers in Long Island City, home to many of the printing companies exiled from the Varick Street print mecca, now face similar gentrification pressure which is sure to increase as Amazon settles in to its designated second HQ location. Some have already made the move out to the suburbs, completely abandoning New York City as a place to print.

Fuse, a roll-up of three former Chicagoland printing companies, Buhl Press, Kelmscott Communications and Rider Dickerson, took the next step in its growth-by acquisition strategy, acquiring Chicago-based Digital Hub.

SGM Technologies, a Dallas-based digital marketing agency, acquired United Group Printing,† also located in Dallas. Structured as a reverse tuck-in, SGM acquired United as a fully operating offset and digital printing facility, including the real estate, as the first step in its plan to grow by acquisition.

In the vast western Canadian region, the Burke Group, headquartered in Edmonton, Alberta, announced the acquisition of two Calgary-based commercial printing companies, Printcor and Topline Printing. Given that the acquired companies are more than three hours distant from Burke’s headquarters in Edmonton, across the Canadian Prairies, the plan is to consolidate the operations into the existing Topline plant in Calgary.

In 2017, the Burke Group acquired its major competitor in Edmonton, McCallum Printing. Sounding a lot like his American roll-up counterparts, the owner and CEO of the Burke Group stated that he “is moving quickly and strategically to drive the print market forward in Western Canada.” We expect that we’ll hear from Burke again.

Franchises

Alliance Franchise Brands, the roll-up of franchised operations in the graphic communications industry, announced the acquisition of RSVP Publications, a Florida-based direct mail system that produces and mails advertising card packages focused on upscale consumers. Alliance, based in Plymouth, Michigan, owns nine franchise systems with over 650 locations. RSVP Publications joins print and marketing service providers Allegra, Insty-Prints, KKP, and American Sir Speedy, as well as wide format print providers Image360 , Signs by Tomorrow, and Signs Now. True to form for Alliance, RSVP Publications is structured as a franchised operation and joins Alliance under the Allegra banner.

* Graphic Arts Advisors, publisher of The Target Report, served as advisors to Aldine Printing in this transaction.
† Graphic Arts Advisors, publisher of The Target Report, served as advisors to United Group Printing in this transaction.


2018 December - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries  

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
Mittera Group$165.8Des Moines, IAHenry Wurst
(Kansas City operations)		$91.5Kansas City, MO12/21/18No DataAsset Acquisition
(New Direction)		Commercial printingLink
Greif$3,870Delaware, OHCaraustar Industries
(Port co. H.I.G. Capital)		$1,400Austell, GA12/20/18$1,800AcquisitionPaperboard mills & productsLink
Manroland Goss
(Port co. American Ind. Partners)		$298.5Augsburg, GermanyGWS Printing SystemsNo DataWaalwijk, Netherlands12/20/18No DataAcquisitionPress sales & upgradesLink
GSB DigitalNo DataLong Island City, NYAldine PrintingNo DataNew York, NY12/20/18No DataAcquisition
(Graphic Arts Advisors)		Stationery printingLink
Rayacom GroupNo DataVancouver, BCWilson Business SolutionsNo DataHamilton, ON12/19/18No DataAcquisitionPrinting & copyingLink
Allegiance Fundraising GroupNo DataLakewood Ranch, FLOne to One No DataSarasota, FL12/17/18No DataAcquisitionDirect mail marketingLink
Alliance Franchise BrandsNo DataPlymouth, MIRSVP PublicationsNo DataTampa, FL12/14/18No DataAcquisitionDirect mail franchisesLink
FutureStakeNo DataGettysburg, PANew Leaf PaperNo DataWalnut Creek, CA12/12/18No DataAcquisitionPaper distributionLink
SGM TechnologiesNo DataUnited Group PrintingNo DataDallas, TX12/12/18No DataAcquisition
(Graphic Arts Advisors)		Commercial printingLink
H.I.G. CapitalNo DataMiami, FLVision Integrated Graphics
(Port co. Concentric Equity)		$98.0Bolingbrook, IL12/11/18No DataAcquisition
(Lincoln International)		Direct mail marketingLink
Burke GroupNo DataEdmonton, ABTopline PrintingNo DataCalgary, AB12/10/18No DataAcquisitionCommercial printingLink
Burke GroupNo DataEdmonton, ABPrintcorNo DataCalgary, AB12/10/18No DataAcquisitionCommercial printingLink
Cascades$3,380Kingsey Falls, QCUrban Forest Products
Clarion Packaging		$110.0Brook, IN
Clarion, IA		12/6/18$37.4AcquisitionPulp packagingLink
FuseNo DataBerkeley, ILDigital HubNo DataChicago, IL12/3/18No DataAcquisitionCommercial printingLink
Adams Publishing GroupNo DataMinneapolis, MNWatertown Daily Times
(Prop. James M. Clifford)		No DataWatertown, WI12/3/18No DataAcquisition
(Dirks, Van Essen)		Community newspapersLink
Adams Publishing GroupNo DataMinneapolis, MNDaily Jefferson County Union
(Prop. W.D. Hoard & Sons Co.)		No DataFort Atkinson, WI12/3/18No DataAcquisition
(Dirks, Van Essen)		Community newspapersLink
Koenig & Bauer (KBA)No DataWurzburg, GermanyDuran MachineryNo DataIstanbul, Turkey12/1/18No DataAcquisitionFolder-gluer machineryLink


2018 December - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
No Chapter 11 Filings Found this Month---------------------------
Chapter 7 Filings:
Arrow Graphics, Inc.12/4/18No Data18-33681Maryville, TN6thEastern TN
Knoxville		Suzanne H. BauknightPatrick Woodside, Jr.Commercial printing


2018 December - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Colonial Printing2/7/19No DataWarwick, RIBradford EquitiesWhite Plains, NYDec-18Commercial printingLink
American Printing & Envelope1/11/19No DataAuburn, MANoneN/ADec-18Commercial printingLink
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↧

BCC Solidifies Position in Mail Preparation Software – January 2019 M&A Activity

February 7, 2019, 6:28 pm
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BCC Software has acquired Satori Software, formerly one of the leading developers and providers of mail preparation software. The two former competitors, BCC Software and Satori, have each been through acquisition by and then divestiture from large mailing equipment manufacturers. This latest transaction, the culmination of a long and winding path for each company, brings together the two mailing software solution companies, now operating independently from large corporate parent organizations. Freed from the constraints of its former corporate owners, BCC has proclaimed that its future growth is dependent on “focus,” which may indeed be easier to achieve as a small company under private equity ownership.

BCC Software, based in Rochester, New York, was swallowed up by Bell + Howell in 2005. The logic of the deal was obvious: Bell + Howell made high-performance, high-volume automated mailing, sorting and related equipment; BCC Software was a provider of software solutions for professional mailers and institutions that processed large volumes of outgoing mail. It didn’t work out as planned. Saddled with excessive debt from years of constantly changing corporate strategies, acquisitions and divestitures, Bell + Howell declared bankruptcy in 2011. Philadelphia-based Versa Capital Management acquired the assets of Bell + Howell from the bankruptcy estate, and subsequently spun BCC Software out as an independent company in 2014, putting an end to the idea that there was synergy between the builder of mailing machines and the mailing software used to cleanse data inputs and presort mailstreams for postage discounts. In 2017, BCC Software was picked up by Thompson Street Capital Partners, a St. Louis-based private equity firm.

Satori Software followed a similar path into and out of the belly of a large corporate entity, albeit skipping the trip through bankruptcy court. Based in Seattle, Washington, Satori was a small, but highly-focused, software company that provided programs used by professional mailers and institutions that needed to cleanse data and process mail efficiently for maximum postage discounts and deliverability. Acquired by French company Neopost in 2009, once again the strategy was obvious; a large manufacturer of document sorting and processing equipment was taking a small focused software company under its wing to service common customers. This also did not work out as planned. Operating independently for most of its tenure under Neopost, in 2017 Satori was eventually rolled into Neopost’s GMC Software division. GMC provided Customer Communications Management (CCM) solutions. The newly combined GMC and Satori were rebranded as “Quadrient,” dedicated to the latest fad of customer-facing communication strategies, the “Customer Experience” or otherwise known as “CX.” The CEO of Quadrient stated “CX is the new battleground for business and understanding customers and the current state of their experience throughout the customer journey is critical to an organization’s success.” (I’m not sure what all this means, since I just want companies to make it easy for me to find and buy stuff, rather than going on a “journey” with them.) In any event, Neopost has decided that the collection of Satori Software products is no longer part of the CX journey. Satori is off the bus and no longer a fellow traveler on a customer’s journey at the mailbox, now sold to BCC Software.

Over the past 25 years, the industry has benefited from many small independent software companies that brought great increases in productivity to the printing and related industries via improved data management and increased automation. Many of those small software companies have been bought up, consolidated and folded into larger organizations. Could the BCC-Satori story be a harbinger of other printing industry-related software divisions, ready to be spun out from large corporate enterprises? Are small independent creative software shops more effective to provide niche solutions to the industry? Are print MIS systems next?

Commercial Printing and Diversified Services

The CJK Group divested the Kingsport Book specialty bookbinding company that it picked up three months ago as part of its acquisition of the Printing Consolidation Company, the erstwhile rollup supported by Blackford Capital. Clearly, CJK was after the other half of the acquired company, Dickinson Press, a book printing and manufacturing company which fits neatly into CJK’s strategy of building out a national book and specialty publication printing business. (see The Target Report: Legacy Printing Companies Fade Into History – April 2017). The spun-off bindery is being integrated into BindTech, a multi-plant high-end bookbinding services owned by Ohio-based private equity firm Signet.

Rengel Printing, located in St. Cloud, Minnesota, acquired local friendly competitor Continental Press.* The respective ownership families have known each other for generations and are combining forces. All operations, staff, and the former owners of Continental have moved in with Rengel Printing which touts almost 100 years of continuous service.

Sandy Alexander in Clifton, New Jersey, continued its evolution from high-volume commercial printer into a large diversified graphics communication company, furthering its presence in the retail wide format market with the acquisition of Signmasters. The acquisition strengthens Sandy’s position in the in-store-graphics market segment.

McClung Companies, a Waynesboro, Virginia printing and marketing services company, further diversified its service offerings with the acquisition of Commonwealth Mailing Systems,† based in Richmond, Virginia. The transaction underscores an industry trend in which commercial printers buy a full-service mailing services company, not only to acquire the customer base, but also to provide customers with a more comprehensive and expert mailing solution for their print and marketing needs.

Packaging

Diversified Labeling Solutions (DLS), a large label printer that serves print distributors in a trade-only strategy, has been acquired by Taiwan-based TSC. The acquired company operates label printing, warehousing and distribution facilities with a total in excess of 320,000 square feet of production space across the US, with locations in Nevada, Texas, Illinois and Georgia. TSC, which primarily provides barcode printers and supplies, plans to leave the DLS brand and operations intact as a separate wholly-owned division.

In the rapidly consolidating label printing segment, one of the most aggressive consolidators, Fortis Solutions Group, acquired Infinite Packaging, itself a rollup of several formerly independent label printers. Fortis is backed by Main Post Partners, and Infinite was backed by Svoboda Capital Partners. Between the two private equity firms, they have racked up no less than ten label printing companies since we began The Target Report in 2011. (For more, see The Target Report: Private Equity LOVES Labels – August 2016).

TricorBraun, a global leader in rigid packaging, has completed its second acquisition in the flexible packaging segment with the purchase of Pacific Bag. Demonstrating its commitment to expand into the flexible packaging market, TricorBraun is combining Pacific Bag with its previous acquisition in the flexible segment, Taipak, and creating a new division, TricorBraun Flex.

Oliver Printing & Packaging, the Ohio-based platform company in the folding carton segment backed by private equity firm Pfingsten Partners, has completed its second bolt-on with the acquisition of DISC Graphics, located on Long Island, New York. The acquired company manufactures high quality folding cartons, micro-fluted corrugated boxes and pressure sensitive labels. As the acquired company’s name implies and you might have guessed, DISC Graphics originally served the music industry, starting out as an in-plant printing operation for Pickwick Records. Pickwick, known as a low-budget operation, lays claim as the place where singer-songwriter Lou Reed and musician John Cale met. Reed and Cale later formed the avant-garde rock band The Velvet Underground. While DISC has grown and diversified far beyond its vinyl record music industry roots, the company website still showcases, among many other products, the company’s ability to produce super glossy specialty Blu-ray packaging, DVD sleeves and even the occasional vinyl record jacket.

* Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to Continental Press in this transaction.
†Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to Commonwealth Mailing Systems in this transaction.

2019 January - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries  

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
Product Identification CoNo DataWayne, NJHC Graphics Screen PrintingNo DataPaterson, NJ1/28/19No DataAcquisitionPoint of purchase displaysLink
BCC Software
(Port co. Thompson Street Capital)		No DataRochester, NYSatori Software
(Div. Quadient/Neopost)		No DataSeattle, WA1/28/19No DataAcquisitionMail processing softwareLink
BindTech
(Port co. Signet)		No DataNashville, TNSheridan Specialty Bindery
(Div. CJK Group)		No DataChurch Hill, TN1/25/19No DataAcquisitionBookbindingLink
McClung CompaniesNo DataWaynesboro, VACommonwealth Mailing SystemsNo DataRichmond, VA1/17/19No DataAcquisition
(Graphic Arts Advisors)		Mailing servicesLink
Sandy AlexanderNo DataClifton, NJSignmastersNo DataPassaic Park, NJ1/16/19No DataAcquisitionRetail in-store signageLink
TSC Auto ID TechnologyNo DataNew Taipei City, TaiwanDiversified Labeling SolutionsNo DataItasca, IL1/11/19No DataAcquisitionTrade label printerLink
DiditNo DataMelville, NYPrint Digital PlusNo DataRonkonkoma, NY1/10/19No DataAcquisitionDigital printingLink
TricorBraun
(Port co. AEA Investors)		No DataSt. Louis, MOPacific BagNo DataWoodinville, WA 1/8/19No DataAcquisitionFlexible packagingLink
Long Falls PaperboardNo DataStarbuck, WAPaperboard plant
(Div. Neenah Paper)		No DataBrattleboro, VT1/7/19No DataAcquisitionPaperboard millLink
Rengel PrintingNo DataSt. Cloud, MNContinental PressNo DataSt. Cloud, MN1/4/19No DataAcquisition
(Graphic Arts Advisors)		Commercial printingLink
PremierIMSNo DataHouston, TXAbsolute ColorNo DataHouston, TX1/3/19No DataMergerTrade commercial printingLink
Midland Paper$920.0Wheeling, ILCohereOneNo DataSan Rafael, CA1/3/19No DataAcquisitionPrint & marketing servicesLink
Oliver Printing & Packaging
(Port co. Pfingsten Partners)		No DataTwinsburg, OHDISC GraphicsNo DataHauppauge, NY1/3/19No DataAcquisition
(Mesirow)		Folding cartonsLink
Sign-Zone
(Port co. Pfingsten Partners)		No DataBrooklyn Center, MNXarismaNo DataHuntsville, AL1/2/19No DataAcquisitionLarge format fabric signageLink
ChartpackNo DataLeeds, MABorden & Riley Paper CompanyNo DataHollis, NY1/2/19No DataAcquisitionFine art papersLink
Fortis Solutions Group
(Port co. Main Post Partners)		No DataVirginia Beach, VAInfinite Packaging
(Port co. Svoboda Capital)		No DataLewisville, TX1/2/19No DataAcquisitionLabel printingLink


2019 January - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
Western Communications1/22/19No Data19-30223Bend, OR9thOregon
Portland		Trish M. BrownMichael W. FletcherNewspaper publisher
Chapter 7 Filings:
Studiocolor1/20/19No Data19-01643Bensenville, IL7thNorthern IL
Chicago		Janet S. BaerWilliam D. ChernyCommercial printing


2019 January - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
ITW Labels3/31/19No DataSan Jose, CAITW LabelsBogart, GAJan-19Label printingLink
Carvell Printing3/6/19No DataSacramento, CANoneN/AJan-19Commercial printingLink
Royal Printing3/13/19No DataGuilford, CTNoneN/AJan-19Commercial printingLink
Henry Wurst3/19/19No DataNorth Kansas City, MOMitteraDes Moines, IAJan-19Commercial printingLink
Marcal Paper
(Div. Soundview Paper Co.)		1/30/19No DataElmwood Park, NJNoneN/A1/30/19Paper productsLink
LSC Communications - Printing plant6/30/19No DataLynchburg, VALSC CommunicationsChicago, IL1/23/19Publication printingLink
Paper & pulping operationsMar-18No DataPot Hudson, LAGeorgia-Pacific
(Div. Koch Industries)		Atlanta, GA1/10/19G-P exiting communications papers businessLink
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Platinum Equity Likes Print – February 2019 M&A Activity

March 6, 2019, 10:55 pm
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In its latest foray into the print-related industries, Platinum Equity, one of the world’s largest private equity firms, announced the acquisition of Multi-Color Corporation in a take-private transaction. This is the latest transaction of many in which the investment firm has taken a positive position in businesses that put ink on a substrate. 

With $13 billion under management, Platinum has completed deals over the past several years in packaging, plastic cards, mail processing equipment, direct mail marketing programs, and pressure-sensitive papers, among others. The folks at Platinum who are charged with making smart investments have clearly decided that there are opportunities across the broad spectrum of companies that operate in print-related activities.

Platinum announced that it plans to combine Multi-Color with WS Packaging, the label and packaging company it acquired one year ago in February 2018 from private equity firm J.W. Childs. With Platinum Equity’s back-to-back acquisitions of these different, but highly complementary companies, the result will be a global producer of label technologies, including pressure sensitive, cut and stack, wraps, aluminum, in-mold, shrink sleeve, heat transfer, RFID and NFC, as well as flexible packaging and folding cartons. The combined company will compete in the increasingly global business of packaging and will have production facilities across the world: Multi-Color adds 71 plants in 26 countries to the 17 locations WS Packaging operates across the US.

A Roll-up of Roll-ups

Multi-Color, headquartered in Cincinnati, Ohio, is the result of a focused and steady drumbeat of acquisitions in the label printing segment, most significantly demonstrated with the acquisition of the label division of Vienna, Austria-based Constantia Flexibles. That transaction not only positioned Multi-Color for the eventual sale to Platinum, it was also afforded Constantia a “second bite of the apple” since it became a 28.7% shareholder of Multi-Color in that deal. Accordingly, Constantia will reap the benefits of Platinum’s purchase: a 32% bump over Multi-Color’s recent publicly traded share price.



WS Packaging, based in Green Bay, Wisconsin, was much less active than Multi-Color on the acquisition front in the five years prior to its sale to Platinum in 2018. Nonetheless, WS was also the result of a strategic roll-up of printing companies that focused on providing labels and related packaging products. The result was a powerhouse in US-based label, flexible packaging and folding cartons.



Investing in Print

Platinum has put its capital to work in print in more ways than just packaging. Over the past several years, the fund has consistently been willing to invest in the future of print in mature printing industry segments. The purchase of Pitney Bowes’ Document Messaging Technologies division, the maker of inserters, printers, sorters and related software was a vote of confidence in direct mail. The acquisition of PLI Card Marketing Solutions and subsequent bolt-on of Harvard Card Systems, both printers of plastic cards used in loyalty and membership programs, was a vote of confidence in the perception of value one gets when holding a substantial printed item. The purchase of Valpak, the direct mail producer of those ubiquitous blue envelopes stuffed with local coupons, was a vote of confidence that recipients respond to print that arrives at their doorstep. The purchase of Jostens, publisher and printer of yearbooks, was a vote of confidence in the desire of students to remember their accomplishments with a book that will last for years. Beginning in 2014, with the acquisition of the company in Australia and New Zealand that publishes phone books, this private equity fund has voted to invest in the future of print.



Commercial Printing and Diversified Services

EP Graphics, based in Berne, Indiana, acquired the remaining business of McCormick Armstrong in Wichita, Kansas. The acquisition was disclosed shortly after McCormick Armstrong announced that it was closing down after 118 years of continuous operation. The shuttered company was a combination web and sheetfed offset printer, and also offered digital printing, mailing and fulfillment services.

Two printing companies that exclusively serve print distributors changed hands. PDF Print Communications, located in Signal Hill, California, acquired Orion Press, a forms printer in Phoenix, Arizona, and announced plans to tuck the operations of Orion into its existing operations in Phoenix. Royal Business Forms, which also sells only to the trade, was acquired in a management buyout. The Brooklyn Park, Minnesota printer specializes in forms and label printing.


2019 February - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries  

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
EP GraphicsNo DataBerne, INMcCormick ArmstrongNo DataWichita, KS2/28/19No DataClosure & Tuck-inCommercial printingLink
Platinum EquityNo DataLos Angeles, CAMulti-Color Corporation$1,740Cincinnati, OH2/25/19$2,500Acquisition
(Goldman Sachs)		Label printingLink
AutoMate Label SolutionsNo DataHouston, TXDiverse Label PrintingNo DataBurlington, NC2/18/19No Data363 Sale in Ch. 11Label printingLink
PDF Print CommunicationsNo DataSignal Hill, CAOrion PressNo DataPhoenix, AZ2/12/19No DataAcquisition
(Corp Dev Assoc)		Forms printingLink
Greif$3,870Delaware, OHCaraustar Industries
(Port co. H.I.G. Capital)		No DataAustell, GA2/11/19No DataAcquisitionRecycled paperboard mfg.Link
ComGraphics ESOPNo DataChicago, ILComGraphicsNo DataChicago, IL2/9/19No DataSale to ESOP
(Prairie Capital)		Transactional printingLink
Royal Business Forms MngtNo DataBrooklyn Park, MNRoyal Business FormsNo DataBrooklyn Park, MN2/5/19No DataMngt. BuyoutForms & label printingLink
PPC Flexible Packaging
(Port co Morgan Stanley Capital)		No DataBuffalo Grove, ILHFM PackagingNo DataPewaukee, WI2/5/19No DataAcquisition
(TKO Miller)		Flexible PackagingLink


2019 February - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
Print Plus Corporation2/15/19No Data19-00797Ponce, PR1stPuerto Rico
Ponce		Edward A GodoyNoemi
Landrau Rivera		Printing & copying
CityView Publishing, LLC2/9/19No Data19-00586Wilson, NC4thEastern NC
Raleigh		David M. Warren John G. Rhyne Magazine publishing
Chapter 7 Filings:
Lingraph Packaging Services Company2/15/19No Data19-04113Glendale Heights, IL7thNorthern IL
Chicago		Janet S. BaerJoshua D. Greene Commercial printing


2019 February - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Bertek  Label & Card Solutions2/25/29No DataMilton, VTIdentification Multi SolutionsMontreal, QC2/25/29Label and card printingLink
Turley Publications4/1/19No DataPalmer, MANoneN/AFeb-19Community newspapers & commercial printLink
McCormick Armstrong2/21/19$11.5Wichita, KSNoneN/A2/21/19Commercial printingLink
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CJK Group Opens Next Chapter with Loan-to-Own Strategy – March 2019 M&A Activity

April 6, 2019, 1:13 pm
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The news broke on March 25th that boutique book printing and manufacturing company Thomson-Shore had filed that day for protection under Chapter 11 of the US Bankruptcy Code. It quickly became apparent that this was not going to be a free-fall bankruptcy in which the company hobbles on for months or years, haggling with creditors to put together a plan to trim debt, reorganize the company and emerge from bankruptcy with a cleaned-up balance sheet. Instead, the game plan called for a quick sale of assets under the supervision of the Bankruptcy Court, the dismissal of all the employees followed by an immediate resumption of operations, albeit limited, under the management of a new owner.

In a well-coordinated sequence of filings in the Bankruptcy Court, Thomson-Shore revealed that a sale of essentially all of its assets was already well under way with a preferred buyer. In what’s known as a “363 Sale” (based on the section of the U.S. Bankruptcy Code that permits the sale of assets free-and-clear of past claims and liens in a bankruptcy proceeding) Thomson-Shore has designated the CJK Group as its “stalking horse” bidder, the company it had selected to be in the preferred starting position in the 363 sale process. With a clear head start and advance planning, CJK is the company most likely to win the race to acquire Thomson-Shore’s assets.

Book printing industry consolidator CJK Group had solidified its position in advance of the bankruptcy filing by lending $760,000 to Thomson-Shore on March 1st as a pre-petition secured loan. That loan likely extended the life of Thomson-Shore and afforded CJK the time needed to develop a solid plan to buy the company on its own terms. To further support the company as it works though the bankruptcy process, CJK also provided $500,000 of DIP financing to Thomson-Shore within days of the bankruptcy filing (DIP stands for Debtor-in-Possession; a DIP loan is a form of financing afforded administrative superpriority over other claims in bankruptcy). As a secured lender and now also the DIP lender, CJK is in the position to include the face value of its secured loans as a “credit bid” included in the final price paid for the Thomson-Shore assets. In other words, CJK has already made a significant down payment towards its plan to purchase the Michigan book printer.

The only hiccup for CJK might be that a bidder emerges to top the $8.25 million price tag spelled out in the court filings and that a bidding war develops. The bidding procedures approved by the bankruptcy court require each bid to exceed the prior highest price in increments of $100K, which could quickly escalate the final price. In the event that CJK gets outbid, at least it will walk away with payment of its secured loans plus a $265K breakup fee that is in addition to the price paid for Thomson-Shore, small consolation for the risk taken and work invested, and a possible deterrent to other bidders.

With the deadline for competing bids set for the end of April, the Bankruptcy Court is scheduled to enter a final order of sale on May 1st. Let the race begin.


Commercial Printing and Convergence of Diversified Services

Salem One, a diversified printing and graphic services company in Winston-Salem, North Carolina, acquired Postmark. The purchased company, described as a “full-service direct marketing company,” clearly has its roots in the lettershop business, offering postal presorting, addressing, inserting and data hygiene services, with a smattering of upstream design and marketing services.

Envision3, a commercial printing company in the Chicagoland region with its roots firmly planted in offset printing, has continued to diversify with the acquisition of Direct Mail Solutions.* Envision3 offered mailing services before acquiring DMS, however, the acquisition provided the company with additional staff with extensive experience in mailing, as well as a customer base with a need for mailing services.

IBS Direct, a direct mail printer located in King of Prussia,† Pennsylvania, announced its merger with ClientLink, a mailing services and fulfillment provider also based in the suburbs of Philadelphia. The two companies are both recent acquisitions of Logan Marketing Group and are currently being rebranded under the moniker “Intellus.”

These acquisitions, as well as other similar deals, reflect a growing industry trend toward firms providing a full roster of services rather than focusing on one or two capabilities. As more and more printers add mailing services, and mailing service providers add digital printing capabilities, a convergence is occurring. We expect this trend to continue.

Commercial Printing and Consolidation

Consolidation within the generalized commercial printing industry continued unabated. John Roberts Company, a diversified graphics services company in Minneapolis offering web and sheetfed printing, as well as mailing and fulfillment services, made a geographic leap with the acquisition of the assets of HM Graphics in Milwaukee. The buyer announced plans to keep the acquired facility operating, retaining many of the employees. With the acquisition, the John Roberts Company transitions to become a multi-plant player with the bonus addition of significant wide format printing expertise.

Two companies in the San Diego metro area came together as Golden State Graphics merged into Zuza, the commercial printing and mailing services company formerly known as CPS Printing. In addition to printing, Zuza offers mailing and marketing support services.

Publicly traded printing company Ennis, with a highly diverse product offering sold exclusively through distributor channels, acquired Integrated Print & Graphics, based in South Elgin, Illinois.‡ The acquired company shares corporate DNA with Ennis, as both companies were originally established as manufacturers of business forms sold through independent distributors.

* Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to Direct Mail Solutions in this transaction.
†Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to CL Graphics, one of the companies that was acquired by and is now part of Integrated Print & Graphics.
‡Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to Maestro Media Print Solutions, one of the companies that was acquired by and is now part of IBS Direct.

2019 March - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries  

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
CJK GroupNo DataBrainerd, MNThomson-Shore$28.0Dexter, MI3/27/19$8.3363 Sale in Ch. 11Book manufacturingLink
Envision3No DataBloomingdale, ILDirect Mail SolutionsNo DataCarol Stream, IL3/25/19No DataAcquisition
(Graphic Arts Advisors)		Mailing servicesLink
St. Joseph's CommunicationsNo DataOntario, QCConsumer magazines (5 titles)
(Prop. Rogers Media)		No DataToronto, QC3/20/19No DataAcquisitionMagazine publishingLink
IBS Direct
(Rebranded as Intellus)		No DataKing of Prussia, PAClientLinkNo DataMontgomeryville, PA3/20/19No DataMergerDirect mail & fulfillmentLink
Progressive ConvertingNo DataAppleton, WINorthwoods Paper ConvertingNo DataBeaver Dam, WI3/17/19No DataAcquisitionPaper convertingLink
Ennis$287.2Midlothian, TX Integrated Print & Graphics$20.0South Elgin, IL3/15/19No DataAcquisitionCommercial printingLink
C-P Flexible Packaging
(Port co. First Atlantic Capital)		No DataYork, PAFlexo Transparent
(Port co. Oriz / Sidereal)		No DataBuffalo, NY3/14/19No DataAcquisitionFlexible packagingLink
LightBay Capital and
Freeman Spogli & Co.		No DataLos Angeles, CAFastsigns InternationalNo DataCarrollton, TX3/13/19No DataAcquisition
(North Point Advisors)		Signage franchisorLink
WestRock$16,720Norcross, GALinkx PackagingNo DataBeccles, UK3/8/19No DataAcquisitionCustom box machineryLink
Salem OneNo DataWinston-Salem, NCPostmarkNo DataWinston-Salem, NC3/8/19No DataAcquisitionMailing servicesLink
John Roberts Company$49.0Minneapolis, MNHM Graphics$17.0Milwaukee, WI3/8/19No DataAsset acquisitionCommercial printingLink
ZuzaNo DataCarlsbad, CAGolden State GraphicsNo DataSan Marcos, CA3/8/19No DataMergerCommercial printingLink
Golden West Packaging Group
(Port co. Lindsay Goldberg)		No DataSacramento, CAAllpack ContainerNo DataRenton, WA3/7/19No DataAcquisitionRetail display & packagingLink
Opus PackagingNo DataCaledonia, MIWabash ContainerNo DataMount Carmel, IL3/7/19No DataAcquisitionCorrugated boxesLink
Tension CorporationNo DataKansas City, MOMotion EnvelopeNo DataDallas, TX3/6/19No DataAcquisitionEnvelope manufacturingLink
The Berkshire Eagle
(Div. Birdland Acquisition)		No DataPittsfield, MASouthern Berkshire ShopperNo DataGreat Barrington, MA3/4/19No DataAcquisitionCommunity ad publicationLink
TranscendiaNo DataFranklin Park, ILPurestatNo DataLewiston, ME3/1/19No DataAcquisitionSpecialty ESD packagingLink


2019 March - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
Reading Eagle Company3/20/19$28.019-11728Reading, PAEastern PA
Reading		Richard E. FehlingEvan Beck CorenNewspaper publisher
Thomson-Shore, Inc.3/25/19No Data19-44343Dexter, MIEastern MI
Detroit		Thomas J. TuckerScott Kwiatkowski Book manufacturing
F+W Media3/10/19$67.719-11728New York, NYDelaware
Wilmington		Kevin GrossKenneth J. Enos Specialty publishing
Peeq Media LLC3/19/19No Data19-41555Alexandria, VA
(Long Island City, NY)		2ndEastern NY
Brooklyn		Carla E. CraigDawn Kirby Commercial & retail graphics
Chapter 7 Filings:
True Color Printing Inc3/5/19No Data19-12381Los Angeles, CA9thCentral CA
Los Angeles		Sheri BluebondJaenam J. Coe Printing & copying


2019 March - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Advertiser Printers4/25/19No DataDayton, KYNoneN/AMar-19Commercial printingLink
Graessle Mercer4/3/19No DataSeymour, INNoneN/AMar-19Commercial printingLink
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Search

The De-Evolution of Cenveo – April 2019 M&A Activity

May 6, 2019, 8:06 pm
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Cenveo announced its first M&A transaction since its emergence from bankruptcy in September 2018, with the sale of its long-run label and paper receipt businesses to Iconex, a portfolio company that Atlas Holdings carved out of NCR Corporation in 2016. With this divestiture, the latest in a long string of spin-offs, Cenveo continues its evolution from its beginnings in 1994 as a humble manufacturer of envelopes to a high-flying printing industry roll-up. With its fingers in multiple specialties, at one time or another, Cenveo has offered high-quality commercial printing, business forms for the distributor market, labels and packaging, office supplies, paper extrusion and coating, content management and production of scientific, technical and medical journals. In short, if there was ink being put on something, Cenveo was a buyer.

In high-end commercial printing, the segment of the printing world that I came from, the 1990’s was the heyday of print consolidation. In this highly competitive, but sometimes rarified, top echelon of super printers, the drumbeat of deals was primarily driven by two publicly-owned companies, Mail-Well and Consolidated Graphics. These serial acquirers used a combination of cash from debt and issuance of public stock, along with their own stock as currency, to roll-up many of the legendary names in the commercial printing industry. It seemed as if Mail-Well, the original name of Cenveo, and its arch-rival Consolidated Graphics were in a feeding frenzy to capture as many of the independent successful and renowned family-owned printing companies in the shortest time possible. There were some second-tier roll-ups, including Printing Arts America and Nationwide Graphics, but the real action was with Mail-Well and Consolidated.

Names such as The Graphic Arts Center in Portland and Anderson Lithograph in Los Angeles were among the icons of printers capable of meeting the demanding standards required to produce high-end automotive books and the best annual reports. Graphic designers would insist that their work only be printed at a select few printing companies that they elected to elevate to the stratosphere of high-end commercial shops, often traveling long distance to provide on-press guidance. Many of those iconic names disappeared in 2004 when Mail-Well jettisoned the 40-plus individual brand names that were the legacy of its non-stop acquisition spree and consolidated all its operations under the Cenveo brand. Both the Portland and Los Angeles locations were subsequently shuttered as the company downsized, upsized, downsized again and restructured in the intervening fifteen years.

Click on Chart to Enlarge

During its formative years from 1994 to 2001, Cenveo had acquired, on average, another printing plant and 120 new workers every other week for seven years. At one point, Cenveo employed more than 13,000 and operated at least 110 printing plants. Now out of bankruptcy, the company is privately-held and, according to its website, employs 6,000 and operates only slightly more than 30 facilities.

With the bankruptcy behind it, the new CEO of Cenveo (and son of the prior CEO) stated that this latest divestiture sets the stage for Cenveo to “be one of the leading manufacturers of envelope, custom labels and print related products.” It remains to be seen if Cenveo, no longer the formidable acquirer it once was, has finally found a defensible strategic position within the larger printing industry. We won’t be surprised if the company itself becomes a target as did its rival Consolidated Graphics in 2013 (See RR Donnelley buys CGX - Strategic Brilliance or Competitors' Opportunity?) Will the Cenveo brand, maybe not so iconic as its targets once were, but certainly a “player” on the field, go the way of so many others and fade into printing M&A history?

Commercial Printing and Convergence of Diversified Services
Knepper Press, a diversified commercial printing company operating out of its facility in the Pittsburgh, Pennsylvania metro area, acquired TBN, the commercial printing affiliate of The Buffalo News, the local newspaper in Buffalo, New York. The transaction is not dissimilar to others over the past several years as local and regional newspapers struggle to develop a sustainable revenue model in the face of competition from the internet. When they discover that adjacent commercial printing operations are not necessarily the path to better profits, the operation is spun out. Two years ago, another Pennsylvania printing company not too distant from Knepper, Intellicor Communications, acquired Intelligencer Printing from its parent, the publisher of The Intelligencer newspaper (See The Target Report: Legacy Printing Companies Fade Into History – April 2017).

MSP, a full-service direct mail production and marketing company, also located in the greater Pittsburgh area, announced the acquisition of David J. Thompson Mailing, a more traditional lettershop and mailing services company located several hours eastward across the state in Bloomsburg. The acquired company will be brought under the MSP brand, with plans to retain the acquired facility and employees. The transaction once again illustrates the trend that appears to be picking up steam; the consolidation of companies operating in the direct mail printing, mail processing and mailing services business.

2019 April - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries  

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
Iconex
(Port co. Atlas Holdings)		No DataGreenwich, CTLabels & Paper Receipt Business
(Div. Cenveo)		No DataJoplin, MO &
Jefferson City, TN		4/29/19No DataAcquisitionLabels & paper receiptsLink
Knepper Press$38.5Clinton, PATBN (Div. The Buffalo News)No DataBuffalo, NY4/26/19No DataAcquisitionCommercial printingLink
James CohenNo DataParsippany, NJNational Enquirer (+2 titles)
(Prop American Media)		No DataNew York, NY4/18/19$100.0AcquisitionTabloid newspaperLink
Koenig & Bauer (KBA)$1,378Wurzburg, GermanyAll-Print GroupNo DataStockholm, Sweden4/15/19No DataAcquisitionPackaging marking & codingLink
Siris Capital GroupNo DataNew York, NYElectronics for Imaging (EFI)$1,020Foster City, CA4/15/19$1,700Stock acquisitionImaging technologiesLink
Blooming Color$9.6Lombard, ILGraphics PlusNo DataLisle IL4/12/19No DataAcquisitionCommercial printingLink
MSPNo DataFreedom, PADavid J. Thompson MailingNo DataBloomsburg, PA4/11/19No DataAsset acquisitionMailing servicesLink
Signs.comNo DataSalt Lake City, UTFerrari ColorNo DataSalt Lake City, UT4/2/19No DataAcquisitionWide format printingLink
CCL Industries$5,160Toronto, ONHinsitsu Screen (Vietnam)No DataHaiduong, Vietnam4/1/19No DataAcquisitionLabel printingLink
Minuteman Press BarringtonNo DataBarrington, ILForrest PressNo DataLake Barrington, IL4/1/19No DataAcquisitionPrinting & copyingLink


2019 April - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
E Z Mailing Services Inc.4/18/19No Data19-17900Elizabeth, NJ3rdNew JerseyStacey L. MeiselKenneth L. BaumMailing services
Chapter 7 Filings:
Rose Printing Company, Inc.4/25/19No Data19-40222Tallahassee, FL11thNorthern FL
Tallahassee		Karen K. SpecieThomas B. Woodward Book printing
Trek Media Group, LLC4/25/19No Data19-02778Casselberry, FL 11thMiddle FL
Orlando		Cynthia C. JacksonMichael A. Paasch Commercial print & promotional
Johnson Publishing Company, LLC4/9/19No Data19-10236Chicago, IL7thNorthern IL
Chicago		Jack B. SchmettererHoward L. Adelman Magazine publishing


2019 April - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Siler Printing6/11/19No DataDenver, CONoneN/AApr-19Commercial printing, consolidating mergerLink
Southeast Media6/4/19No DataHouston, TXNoneN/AApr-19Commercial printingLink
Printcraft Press6/4/19No DataPortsmouth, VANoneN/AApr-19Commercial print operationLink
TBN (The Buffalo News)5/2/19No DataBuffalo, NYThe Buffalo NewsBuffalo, NYApr-19Commercial print operationLink
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↧

Sports Illustrated Print Edition Heads to Hospice – May 2019 M&A Activity

June 7, 2019, 8:00 pm
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Meredith, the publishing company that is slowly dismantling the portfolio of iconic Time-Life magazine titles that it acquired in 2018, has sold Sports Illustrated to Authentic Brands Group (“ABG”). Well, kinda.

The press release announcing the sale of Sports Illustrated begins with the somewhat obtuse statement that “Global Brand Owner Purchases a Sports Media Icon and Forges a Strategic Partnership with Meredith Corporation to Build a Global Platform Converging Sports, Culture and Entertainment.” My BS antenna went up with that description of the deal as a “Strategic Partnership,” since in my world of M&A transactions this euphemism is often code for something other than a real sale. Digging deeper into the details reveals that what the branding company really acquired was the intellectual property of the Sports Illustrated brands, including two million photos and the rights to use and sell licensed uses of the names Sportsperson of the Year, Sports Illustrated Kids, Sports Illustrated TV, and of course, the famous Sports Illustrated Swimsuit.

What ABG did not buy for its $110 million purchase price was the obligation to continue publishing the magazine. Meredith was apparently unable to find a buyer that would assume the legacy responsibilities of producing insightful editorial content, obtaining stunning photographs, and in general being bogged down in the nitty gritty world of publishing. In an odd twist, Meredith has agreed to operate the Sports Illustrated printed magazine and the accompanying website for at least two years. Odder yet, Meredith will pay ABG a licensing fee for the use of the Sports Illustrated brand, the brand it just sold.

As the owner of brands and licensing rights ranging from fashion (Jones New York, Juicy Couture, Hickey Freeman, Aeropostale), to sports stars (Shaquille O’Neal, Julius Irving, Greg Norman, Muhammed Ali), to entertainers (Elvis, Marilyn Monroe), ABG is described as “unencumbered” by physical assets.” The strategy with the Sports Illustrated brand will reportedly follow the same playbook; ABG will seek to have the Sport Illustrated brand placed on consumer goods, athletic equipment, video games and sports gambling. The brand will be shopped as a vehicle to promote live events, conferences, and sports camps. ABG will also mine the royalty rights for licensees to use any of the 60-plus years of photos and magazine cover images.

Subsequent to the purchase of Time-Life, the Sports Illustrated team has been kept separate in anticipation of a sale, however Meredith has now announced that it will be integrating the Sports Illustrated editorial and production functions into its normal operations alongside its other publications. With the clock running on the two-year commitment to keep publishing the magazine, it remains to be seen if this once-great chronicler of American sports culture will remain a vibrant and financially viable print publication while its name and images are positioned as a lifestyle brand.

Packaging

Welch Packaging, a privately-owned roll-up that has maintained a laser-like focus on its acquisition strategy within the corrugated box and retail display segments, is back on our deal log with another transaction squarely in its playbook, acquiring Heritage Packaging. The purchased company is in Lincoln, Illinois and produces corrugated cartons and retail displays. Welch is the poster child of a company that is executing on a highly defined growth by acquisition strategy and not straying from its core competency. Welch has completed an acquisition every year for 20 years. Starting with five employees, the company now has over 14 locations and in excess of a thousand employees. The company has also maintained a decidedly Midwestern flavor from its base in Indiana, acquiring companies in Ohio, Illinois, Michigan, Tennessee, Indiana, and Kentucky.

New-Indy Container Board, a joint-venture company formed in 2012 with backing from two family offices with deep roots in the paper and packaging industries, announced the acquisition of Proactive Packaging & Display. Located in Ontario, California, the acquired company produces corrugated retail displays utilizing flexographic and digital printing technologies. New-Indy is building out a multi-state company focused on making brown paper materials from recycled feedstocks. The addition of Proactive to New-Indy suggests the beginning of a vertical integration strategy, as some of the company’s brown paper stocks will now be utilized within the corporate family. Some of that brown paper will likely come from the Catawba, South Carolina paper and pulp mill that New-Indy acquired in October 2018. As we expected, New-Indy reportedly is planning to convert the paper machine in Catawba that has been producing fine printing grades to brown kraft linerboard grades, placing further pricing pressure on the paper grades used in commercial printing (See The Target Report: A Reversal of Fortune: Paper Mills Gain Leverage).

WestRock, the global packaging behemoth formed in 2015 when RockTenn acquired MeadWestvaco, was active again in May with the acquisition of UBS Printing Group in Corona, California. The acquired company will become part of WestRock’s Multi Packaging Solutions business, the PE-backed roll-up in the high-end folding carton business acquired by WestRock in 2017 (See The Target Report: WestRock Affirms Commitment to Paper). UBS Printing produces folding cartons, rigid setup boxes, retail displays and commercial printing products on a fleet of offset presses.

LBP Manufacturing, a portfolio company of Pritzker Private Capital, has announced the acquisition of Union Packaging. LBP, with facilities in the US, Poland and China, produces paper-based products such as sleeves for hot drinks, drink carriers, clamshell packaging for fast food, and similar products that primarily serve the food and beverage industries. The acquired company, a minority-owned enterprise, is located in the Philadelphia metro region and produces similar paper-based food carriers such as open-top French fry cups, burger clamshells, and pizza slice carriers.

Commercial Printing and Convergence of Diversified Services

Canfield & Tack, a commercial printing company in Rochester, New York, is absorbing the business of fellow Rochester-based printer Cohber Press. Canfield & Tack, the larger of the two companies, with approximately $15 million in revenue, has been operating out of two facilities. Cohber Press, with sales of approximately $9.5 million, has a larger and more efficient facility that has been underutilized. Canfield & Tack will be the surviving corporate entity, and even though it’s the larger company, it will be pulling up stakes and moving into the Cohber plant; a classic “reverse tuck-in” transaction. Canfield & Tack is a 100% ESOP-owned company and will be welcoming the Cohber staff members as new employee-owners of the merged operations. 

Corporate Document Solutions (“CDS”), a Cincinnati, Ohio based digital printing and managed print services company, announced the acquisition of Alliance Printing & Publishing. The acquired company brings with it not only additional revenues for CDS, but also traditional 40” offset printing, extensive bindery capabilities and in-house mailing services. Established in 1992, CDS is focused on serving the regional corporate market and is a 100% woman-owned company.

Talient Action Group, a digital and offset printing company in Manchester, New Hampshire, has acquired nearby Ben Franklin Printers. The acquiring company also owns a digital advertising agency and has been a serial acquirer to fuel its growth. This latest transaction comes two years after Talient absorbed the business of Proofing House Press in Salem, New Hampshire.*

Another serial acquirer, Alcom Printing Group, based in Harleysville, Pennsylvania has put another acquisition on its score board, picking up Payne Printery in Dallas, Pennsylvania. With the acquired company located almost 100 miles from Alcom’s headquarters and main production facility, Alcom has announced that it will maintain a local office in Dallas for sales, customer services, estimating and prepress to maintain the regional presence and service. This trend to establish customer-facing “spokes” at acquired locations is a trend we see and expect to grow as companies with stronger, highly efficient production facilities consolidate regional printing capacity through repetitive acquisition strategies.

* Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to Proofing House Press in this transaction.

2019 May - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries  

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
LBP Manufacturing
(Port co. Pritzker Private Capital)		No DataCicero, ILUnion PackagingNo DataYeadon, PA5/31/19No DataAcquisitionFolding cartonsLink
Smart SourceNo DataAtlanta, GAPrint distribution business
(Div. MPX)		No DataPortland, ME5/29/19No DataAcquisitionPrint distributorLink
Authentic Brands Group
(Port co. Leonard Green & Partners)		No DataNew York, NYSports Illustrated Brand
(Prop. Meredith)		No Data
($3,170)		Des Moines, IA5/27/19$110.0AcquisitionPublishing assetsLink
CCL Industries$5,270Toronto, ONColle a Moi$1.3Quebec City, QC5/23/19$3.0AcquisitionPersonalized labelsLink
MediaNews Group
(Port co. Alden Global Capital)		No DataDenver, COReading Eagle Company$28.0Reading, PA5/22/19$5.0363 Sale in Ch. 11Community newspaperLink
Sonoco$5,440Hartsville, SCCorenso Holdings AmericaNo DataWisconsin Rapids, WI5/21/19No DataAcquisitionRecycled paperboard & coresLink
Talient Action GroupNo DataManchester, NHBen Franklin PrintersNo DataHooksett, NH5/20/19No DataAcquisitionCommercial printingLink
Forum CommunicationsNo DataFargo, NDRochester Post Bulletin
(Prop Small Newspaper Group)		No DataRochester, MN5/16/19No DataAcquisition
(Dirks, Van Essen)		Regional newspaperLink
Canfield & Tack$14.9Rochester, NYCohber Press$9.4Rochester, NY5/16/19No DataAcquisitionCommercial printingLink
Premier Marketing Group
(Div. Grossman Marketing)		No DataManchester, MESuncoast Print SolutionsNo DataSarasota, FL5/15/19No DataAcquisitionPrint distributorLink
Brixey & Meyer CapitalNo DataDayton, OHPatriot ConvertingNo DataElk River, MN5/14/19No DataAcquisitionPaper convertingLink
Welch Packaging GroupNo DataElkhart, INHeritage PackagingNo DataLincoln, IL5/14/19No DataAcquisitionCorrugated boxesLink
View Newspaper GroupNo DataLapeer, MIDaily NewsNo DataGreenville, MI5/13/19No DataAcquisitionCommunity newspaperLink
Michigan Web PressNo DataLapeer, MIStafford PrintingNo DataGreenville, MI5/13/19No DataAcquisitionNewspaper printingLink
New-Indy ContainerboardNo DataOntario, CAProactive Packaging
(Port co. CK Pearl Fund)		No DataOntario, CA5/9/19No DataAcquisition
(Mesirow)		Corrugated retail displaysLink
Corporate Document SolutionsNo DataCincinnati, OHAlliance Printing & PublishingNo DataMiddletown, OH5/7/19No DataAcquisitionCommercial printingLink
Sign-Zone
(Port co. Pfingsten Partners)		No DataBrooklyn Center, MNPromicNo DataNederweert,
Netherlands		5/7/19No DataAcquisitionPromotional displaysLink
Alcom Printing GroupNo DataHarleysville, PAPayne PrinteryNo DataDallas, PA5/3/19No DataAcquisitionCommercial printingLink
Southwest Business Products No DataToronto, ONBinders & Index Tax Business
(Div DCM)		$234.0Brampton, ON5/3/19No DataAcquisitionSpecialty printed productsLink
Electronics for Imaging (EFI)$1,020Foster City, CABoya KimyaNo DataBursa, Turkey5/2/19No DataAcquisitionInkjet textile inksLink
WestRock$17,320Norcross, GAUBS Printing GroupNo DataCorona, CA5/2/19No DataAcquisitionFolding cartonsLink
New Orleans AdvocateNo DataNew Orleans, LATimes-Picayune
(Prop Advance Local Media)		No DataNew Orleans, LA5/2/19No DataAcquisitionMetro newspaperLink
Virtual Systems
(Rebranded as Print Reach)		No DataJacksonville, FLPagePath TechnologiesNo DataPlano, IL5/1/19No DataMergerMIS system for printingLink
C.J. GraphicsNo DataMississauga, ONAcme TicketNo DataMississauga, ON5/1/19No DataAcquisitionTicket printingLink


2019 May - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
American Printing Company, Inc. 5/3/19No Data19-01844Birmingham, AL11thNorthern ALTamara O. MitchellBill D. Bensinger Commercial printing
Chapter 7 Filings:
Independent Printing Co., Inc.5/30/19No Data19-17330Glen Burnie, MD4thBaltimoreDavid E. RiceRaymond E. DiBiagio, Jr.Commercial printing
Appleby Services, Inc.
dba Center Printing Co.		5/24/19No Data19-04923Sarasota, FL11thMiddle FLRoberta A. Colton James D. Jackman Commercial printing


2019 May - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Luke paper millJun-19No DataLuke, MDVerso PaperMemphis, TNApr-19Coated printing paper gradesLink
Transcontinental - Printing facility12/31/19No DataBrampton, ONTranscontinentalMontreal, QC5/8/19Consolidation of retail print operationsLink
Thomson-ShoreMay-19$28.0Dexter, MICJK GroupBrainerd, MN5/11/19Consolidation of book printing operationsLink
Performance POP7/10/19No DataDallas, TXNoneN/AMay-19Wide format, retail displayLink
Shelton-Turnbill7/11/19No DataEugene, ORNoneN/AMay-19Commercial printingLink
Pacific Coast Graphics8/7/19No DataWhittier, CANoneN/AMay-19Commercial printingLink
North American Communications5/20/19No DataDuncansville, PANoneN/A5/20/19Direct mail Link
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Print Publishing in Turmoil – June 2019 M&A Activity

July 7, 2019, 10:11 am
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The shakeout in the world of publishing continues unabated as titles in print face continued downward pressure in circulation, declining advertising revenues and inability to support the cost of editorial staffs, paper, printing and distribution. Meanwhile, the two remaining titans of magazine printing duke it out with the U.S. Department of Justice over their proposed merger. Designed to rationalize excess printing capacity with declining demand, the acquisition of LSC Communications by Quad can also be viewed as a desperate bid to gain pricing leverage over already beleaguered publishers.

One such publisher, Condé Nast, is the venerable company behind classic publications such as Vogue, Vanity Fair, The New Yorker, and GQ. Founded in 1909, the company has a long history of managing change in the media landscape and has kept up with the times with the acquisition of Wired magazine, the chronicler of emerging technologies originally inspired by the Whole Earth Catalog. In 2015, Condé Nast acquired the hip online music website Pitchfork; shortly thereafter ceasing publication of the accompanying printed quarterly magazine, retaining only the online delivery channels.

With loses reported in excess of $120 million announced last year, Condé Nast embarked on a sale process to offload its Brides, Golf Digest and W magazine titles. Brides magazine was sold in May. The buyer announced that after 85 years in print, the upcoming August/September issue will be the last time the magazine is printed, after which the publication goes to a strictly online format. Golf Digest was also sold in May. No plans were announced to cease publishing the print edition; at least that’s the scoop, for now.

In the latest resettlement of money-losing titles, W magazine moves from its prestigious ownership under Condé Nast to the less-than-glamorous stewardship of its new owner, Future Media Group. Future Media is the new holding company owned by the publisher of Surface magazine, the edgy, avant-garde design and hipster-culture, free-in-your-hotel-room glossy journal; as well as publisher of Watch Journal, the super-lux magazine distributed free at private air terminals and in luxurious high-end hotels.

The printed journals are core to Future Media’s distribution model, placed on behalf of advertisers in places of conspicuous consumption. Presumably print will continue to be a core format for W magazine; nonetheless Future Media will continue the transition, begun under Condé Nast, of W’s editorial content to online website and social media channels. Leaving no doubt about this, Future Media’s chief executive stated that the newly appointed editor-in-chief “has a forward-thinking sensibility that will bring W beyond its core print distribution into various offline, online and augmented formats.”

Meredith, the folksy Midwest publisher, has been deliberately and steadily dismantling the portfolio of Time-Life publications that it acquired in 2018. In keeping with its focus on “lifestyle” publications, primarily aimed at a female audience, Meredith has to date retained only the titles acquired in the Time-Life deal that fit this demographic audience, including Entertainment Weekly, InStyle, Travel & Leisure, and People magazine. The titles that are “newsier” and therefore contain quickly outdated information, have now all been sold, including Time Magazine, Fortune (See The Target Report: The Waning Fortunes of the Time Inc. Magazines), and Sports Illustrated (See The Target Report: Sports Illustrated Print Edition Heads to Hospice). Originally planning to sell Money magazine, Meredith announced that instead it will keep the title, however the current issue June/July will be the last in print. Money will be transitioned to online-only content.

Apparently, the U.S. Department of Justice determined that the last thing that magazine and book publishers needed was the merger of the two remaining behemoth printers and has sued to block Quad’s acquisition of LSC Communications. In an interesting twist, the Department of Justice lawsuit used the merger candidates’ own words against them, quoting several examples in which each side complained that if only they didn’t have to compete with the other, that would eliminate the last remaining impediment to establishing real pricing leverage in the market, especially for the printing and distribution of long-run high quality glossy titles.

In the event that Quad and LSC Communications prevail over the lawsuit filed by the Department of Justice to block their announced merger, the combined entity will be able to slash capacity and gain price increases. However, the ongoing reduction in the number of long and medium-run glossy publications that remain in print format may in itself be sufficient for publishers to maintain their downward pressure on print pricing.

Photobooks & Personalized Consumer Products

Shutterfly, the 800-pound gorilla in the digital photo storage, prints processing and personalized merchandise segment, announced that it was exiting the public markets and accepting an offer for $2.7 billion, including the assumption of debt, from giant private equity firm Apollo Global Management. Just to make sure that it would be the dominant player in a highly competitive and fragmented space, Apollo also announced that it was also snapping up Snapfish, an also-ran in the photo books and related online photo products printing segment.

Included with the Shutterfly deal, Apollo will also own Lifetouch, the photography and photo print company that Shutterfly acquired in January 2018. When Shutterfly announced the acquisition of Lifetouch, its market value soared as investors became enthusiastic about Shutterfly’s access to the 25 million students that Lifetouch photographs each year. That excitement did not last long when the projected synergies did not develop. Shutterfly’s stock price was overexposed and quickly retreated to levels not seen since 2016, creating an attractive opportunity for Apollo’s move to consolidate the segment.

Commercial Printing and Diversified Services

Mittera continues its national roll-up strategy with the acquisition of Sprint Denver, a commercial printing company. The Sprint manufacturing operation is slated to be consolidated into Mittera’s existing facilities. Mittera already has a facility in Denver, acquired with the purchase of the assets of Kansas City-based Henry Wurst company. The deal to acquire Sprint is the latest in a long string of acquisitions for Mittera, effectively a roll-up of roll-ups. (See The Target Report: Consolidation in Commercial Printing Rolls On).

Xpressdocs, a self-service on-demand marketing company based in Fort Worth, Texas acquired Amazingmail, a Phoenix, Arizona-based self-service direct mail printing company that utilizes proprietary software to connect with and support national brands with print runs as unique as one piece or up to many thousands per day. Xpressdocs completed the transaction with backing by private equity firm Falcata Capital.

Colortree Group, a Richmond, Virginia direct mail components printing company, closed its doors in June. This sudden closure was an abrupt about-face from the optimistic picture painted in 2017 when management acquired the company from Boathouse Capital. Boathouse had originally backed management in 2011 in a roll-up strategy, starting with the combination of two Virginia direct mail printing companies, Colortree and Graphic Innovations. The roll-up strategy apparently stalled after the 2013 acquisition of Direct Impressions, another Virginia-based direct mail printer. Eventually, Boathouse bailed out and sold the company back to the original management via the newly formed and oddly named entity, the Stingem Management Group. Unfortunately, it’s the 240 employees of this $57 million revenue printing company that got stung.


2019 June - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries  

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
HP Inc.$58,700Palo Alto, CAOneFlow SystemsNo DataLondon, UK6/26/19No DataAcquisitionWorkflow software systemLink
Future Media GroupNo DataNew York, NYW Magazine
(Prop. Conde Nast)		No DataNew York, NY6/25/19No DataAcquisitionMagazine publisherLink
Randa Duncan WilliamsNo DataHouston, TXTexas Monthly Magazine
(Port co. Genesis Park)		No DataAustin, TX6/25/19No DataAcquisitionMagazine publisherLink
Toppan Printing$13,000Tokyo, JapanInterprintNo DataArnsberg, Germany6/24/19No DataAcquisitionIndustrial décor printing Link
AlphaGraphics
Div. MBE Worldwide		No DataLakewood, COPrint SpeakNo DataSydney, Australia6/18/19No DataAcquisitionPrint MIS dashboardLink
Xpressdocs PartnersNo DataFort Worth, TXAmazingmailNo DataPhoenix, AZ6/18/19No DataAcquisition
(Woodbridge)		Direct mail printingLink
Paxton Media GroupNo DataPaducah, KYLebanon Democrat ( & others)
(Prop. Sandusky Newspaper Group)		No DataLebanon, TN6/18/19No DataAcquisition
(Cribb, Greene & Cope)		Community newspapersLink
Mittera GroupNo DataDes Moines, IASprint DenverNo DataDenver, CO6/12/19No DataAcquisitionCommercial printingLink
Apollo Global ManagementNo DataNew York, NYShutterfly$2,090Redwood City, CA6/10/19$2,700Acquisition
(Morgan Stanley)		Photobooks & printsLink
Apollo Global ManagementNo DataNew York, NYSnapfishNo DataSan Francisco, CA6/10/19No DataAcquisitionPhotobooks & printsLink
Penguin Random House
(Div. Bertelsmann)		$1,800New York, NYF+W Books
(Div. F+W Media)		$22.0New York, NY6/7/19$5.6363 Sale in Ch. 11Specialty publishingLink
Elliott ManagementNo DataNew York, NYBarnes & Noble$3,550New York, NY6/7/19$683.0AcquisitionBook retailerLink
Heidelberg$2,825Heidelberg, GermanyCrispy MountainNo DataMainz, Germany6/5/19No DataAcquisitionMIS system for printingLink
Fortis Solutions Group
(Port co. Main Post Partners)		No DataVirginia Beach, VALabel TechnologyNo DataMerced, CA6/3/19No DataAcquisitionLabels & flexible packagingLink
Modacentric
(Port co. Merchant Capital)		No DataRolling Meadows, ILModagraficsNo DataRolling Meadows, IL6/3/19No DataAcquisitionFleet, POP, & OEM graphicsLink


2019 June - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
No Chapter 11 Filings Found this Month---------------------------
Chapter 7 Filings:
Advantage Business Media, LLC6/18/19No Data19-11360Rockaway, NY3rdDelawareBrendan Linehan ShannonShannon Dougherty Humiston Trade magazine publishing
MJS Printing, Inc.6/6/19No Data19-11878New York, NY2ndSouthern NY
New York		James L. GarrityAllan R. BloomfieldCommercial printing


2019 June - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Amsterdam paper mill9/24/19No DataAmsterdam, NYWestRockNorcross, GAJun-19Corrugated packagingLink
Web Graphics printing plant9/27/19No DataQueensbury, NYAmsterdam Printing & LithoAmsterdam, NYJun-19Business forms & stationery printingLink
Colortree Group6/3/19$57.0Richmond, VAN/ANone6/3/19Direct mail & envelope printingLink
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What’s in a Letter? – July 2019 M&A Activity

August 6, 2019, 6:46 pm
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After rolling up the business of selling fonts, Monotype Imaging has announced that it is exiting the public market, accepting an offer from private equity firm HGGC. This highly profitable business reached the end of one road, veered off to the side, and is now being acquired as it struggles to find a new pathway forward. 

This is not a story of a distressed company, far from it. Rather, Monotype has been so successful in the consolidation of the font licensing business that the company has run out of significant acquisitions in its chosen market segment. Without a clear path to achieve future growth, the public markets have been punishing the stock price. Company management decided that it was time to sell, apparently before the company value declined even more. After Monotype ran a failed sale process in 2018 which saw 28 prospective buyers walk away without any definitive offers, HGGC emerged recently with an offer of $825 million in cash. Based on trailing twelve-month revenues of $244 million, the purchase price is 3.4 times revenues and 15.1 times the EBITDA of $54.5 million for the same period. Gross profit has been reported hovering around 85% of revenues, most of which are recurring and predictable, which explains the relatively high enterprise value (viewed from the perspective of those of us in the printing industry).

By 2015, having completed a long string of font-related acquisitions, Monotype had to look elsewhere for its next act. The company first acquired Swyft Media, a start-up providing mobile advertising and messaging apps. In a further drift away from the core business of licensing fonts, in 2016 Monotype acquired Olapic, which provides marketing automation software to capture and deploy user-generated visual content for social media and promotion. Olapic is not in the “steady as she goes” business of licensing fonts; the acquisition puts Monotype smack dab in the middle of the super-hot and rapidly developing business of marketing automation software. While this may prove out to be a prescient strategic move in the long run, Monotype laid off 80 Olapic employees when results fell short of expectations during the first year, and in the first quarter of 2019 the company reported a decline in the performance of the Olapic business unit.

This is not the first time that Monotype has regrouped and found a new way forward, nor will this be the first time the company is under private equity ownership. Indeed, this company is no stranger to technological disruption; the current Monotype company is the successor to the company that invented and manufactured one of the original technological disrupters, the Monotype hot metal caster. Along with the Linotype typesetter, these machines completely upended the laborious business of setting type by hand and paved the way for the tremendous growth in newspaper and book publishing. From its founding in 1887 to the 1960’s when phototypesetting was developed, the Monotype machine was considered the higher quality of the hot metal machines since each letter was separately cast and the typesetter could make minor changes in spacing or fix a misspelling by replacing a single incorrect letter. By contrast, the competing Linotype machine cast a complete line of type in one metal bar (or line), which was more compatible with rapid turnaround applications such as newspapers.



The erosion in the hot metal typesetting business was complete by 1992 when photo typography systems and desktop publishing software achieved absolute dominance. Failing to convert quickly enough to the new technology, Monotype filed for Administrative Receivership in the UK. After a series of owners and rebranding efforts, the company eventually was acquired by phototypesetting pioneer Compugraphic, by then a division of Agfa. Six years later, in 2004, Agfa divested the typesetting division, selling Monotype to private equity firm TA Associates. Resurrecting the Monotype name, TA Associates launched an aggressive roll-up strategy by acquiring Linotype, Monotype’s rival for more than a hundred years, by then a division of press manufacturer Heidelberg. Monotype returned to the public markets in 2007 and began to aggressively acquire other font companies, including font provider Ascender in 2010, digital font retailer Bitstream in 2012 (which included the online font seller MyFonts.com) and finally the last large independent digital font retailer FontShop in 2014.

From their early days, Monotype and Linotype did not just build machines, they also commissioned great designers to design fonts. Commissioned typefaces, many of which are ubiquitous today, included Gill Sans, Times New Roman, and Old Style Goudy. Several more classic fonts came along with the Linotype acquisition, including Helvetica, Frutiger and Optima. The ownership of these commissioned fonts, originally a value-added side product to the primary business of manufacturing machines, paved the way for Monotype’s eventual rebirth as a font licensing company.

Commercial Printing and Diversified Services

DG3 Group, the diversified printing and graphic services company headquartered in Jersey City, New Jersey, announced another acquisition in the UK. The acquired company, Newnorth Print Limited, will be consolidated into the existing two locations in the UK. With a core competency and origins in the financial printing segment, DG3 has focused on serving the financial centers of New York, London and Hong Kong, with support services in the Philippines. The company has been owned by Resilience Capital Partners since 2016 when it acquired DG3 from Arsenal Capital Partners (See The Target Report: Private Equity Participates in Printing Industry Consolidation).

Ennis, the publicly traded serial acquirer of trade-only printing companies, acquired The Flesh Company based in Fenton, Missouri. Included in the deal is subsidiary Impressions Direct which is focused solely on direct mail printing and services. Collectively, the two acquired companies had approximately $31 million in sales for their most recent fiscal year. In addition to the direct mail products, the acquired company provides business forms, checks and labels, sold mostly through print distributors and resellers.

PrintStar, a commercial printing company located in San Diego, California acquired the printing business of Sorrento Mesa Printing,* also of San Diego. The former owner of Sorrento Mesa is launching a new company focused on branding and promotional services. Suolo Communications, based in Minneapolis, Minnesota has acquired Commers Printing in Blaine, Minnesota. Suolo Communications was formerly known as RJM Printing and outgrew the printing-centric moniker. In 2016, the company rebranded with the Suolo name, billing itself as a “creative production agency” offering creative services, printing, signage and technical communications.

Coloredge, based in New York City, announced that it is merging with Primary Color Systems which is based in Cypress, California. Both companies offer high-end creative and display printing services for national brands primarily in the fashion, consumer goods and events marketing segments. Services at both companies include extensive prepress, retouching and package design, in addition to wide and grand format printing, structural design and installation. The merger is clearly intended to position the combined company as a national player, with additional locations in California, New Jersey, Atlanta, Georgia and two in China. We expect that this merger, which we see as similar to the Orora Visual roll-up, sets the stage for more national roll-ups in the wide and grand format segments.

* Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to Sorrento Mesa Printing in this transaction.

2019 July - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries  

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
HGGCNo DataPalo Alto, CAMonotype Imaging Holdings$244.0Woburn, MA7/26/19$825.0Acquisition
(J.P. Morgan)		Typefaces & FontsLink
Coloredge
(Port co. Saints Capital)		No DataNew York, NYPrimary Color Systems$62.0Cypress, CA7/26/19No DataMergerWide format & retail graphicsLink
Graphic Packaging$6,090Atlanta, GAArtistic Carton Company$63.0Elgin, IL7/23/19No DataAcquisitionPaperboard mill & convertingLink
Suolo CommunicationsNo DataMinneapolis, MNCommers PrintingNo DataBlaine, MN7/18/19No DataAcquisitionCommercial printingLink
Alphagraphics Austin
(Div. A Dog Solutions)		No DataAustin, TXSign SatisfactionNo DataAustin, TX7/17/19No DataAcquisitionSignageLink
Ennis$415.4Midlothian, TX The Flesh Company$31.1Fenton, MO7/11/19No DataAcquisitionForms & labelsLink
PrintStarNo DataSan Diego, CASorrento Mesa PrintingNo DataSan Diego, CA7/10/19No DataAcquisition
(Graphic Arts Advisors)		Commercial printingLink
GrimcoNo DataFenton, MODuratex Media Business
(Div. Agfa Corporation USA)		No DataElmwood Park, NJ7/8/19No DataAcquisitionWide format substratesLink
Ricoh$18,100Tokyo, JapanDocuWareNo DataNew Windsor, NY7/2/19No DataAcquisitionDocument automationLink
DG3 Group
(Port co. Resilience Capital)		$148.0Jersey City, NJNewnorth Print LimitedNo DataBedford, UK7/2/19No DataAcquisitionCommercial printingLink
KKR No DataNew York, NYCorel
(Port co. Vector Capital)		No DataOttawa, ON7/2/19No DataAcquisitionGraphic & creative softwareLink
McKinley Paper Co.
(Sub. Bio Pappel)		No DataPrewitt, NM
(Mexico City, Mexico)		U.S. CorrugatedNo DataWashington, PA7/1/19No DataAcquisitionCorrugated packagingLink


2019 July - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
No Chapter 11 Filings Found this Month---------------------------
Chapter 7 Filings:
McKella2807/12/19No Data19-23597Pennsauken, NJ3rdNew Jersey
Newark		Jerrold N. Poslusny Jr.Ira Deiches Marketing service provider
SAP Digital Corp.7/2/19No Data19-17759Alhambra, CA9thCentral CARobert N. KwanJonathan J. Lo Commercial printing
Preferred Packaging Corp.
(and affiliated company)		7/3/19No Data19-23111Lyndhurst, NJ3rdNew Jersey
Newark		Vincent F. PapaliaJonathan I. RabinowitzCorrugated cartons & displays


2019 July - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Quad/Graphics - Printing facility9/10/19No DataMidland, MOQuad GraphicsSussex, WI Jul-19Special interest publications
Formerly Quebecor Printing facility		Link
Taylor Corp. - Printing facility9/3/19No DataColumbus, OhioTaylor Corp.North Mankato, MN7/15/19Vectra Visual facility - Retail displayLink
Gateway Press9/12/19No DataLouisville, KYN/ANoneJul-19Commercial printingLink
NuPak Printing8/15/19No DataRed Lion, PAN/ANoneJul-19Folding cartonsLink
Industrial Marking Systems8/27/19No DataMilton, VTN/ANoneJul-19Label printingLink
↧

The Target Report Annual Recap – August 2019 M&A Activity

September 7, 2019, 8:58 pm
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As readers of The Target Report know, we view the industry from the perspective of transactional activity. Over the past eight years, we have chronicled, logged, and commented on the robust merger and acquisition activity in the printing, packaging and related industries. As we get ready for the fall season which is replete with multiple trade shows, peer group meetings and opportunities as more companies come to market, we take a look back at the data on transactional activity that we have compiled and reported to you in our monthly reports. Our view this month is from the “30,000-foot level,” parsing the industry transactional data by industry segment, including bankruptcy filings and plant closures. This year we take a deeper dive and seek to provide some insight into not just the quantity and seasonality of transactions by segment, but also a view into the rationale that is driving deal activity.

We reviewed, categorized, sorted, counted and charted the data we have collected, comparing the past two years. Based on the number of transactions, the past twelve months were a bit quieter than the twelve months ended last August, with approximately 8% fewer transactions. Last year at this time, our year-over-year analysis showed that the trends were amazingly consistent to the prior year. M&A activity in our industry has slowed down, but not by much.

Commercial printing companies (general, retail inserts, catalog printers, copy shops and traditional display) and packaging companies (labels, folding cartons, flexible packaging and corrugated cartons) once again rank highest in the number of deals announced, followed closely by print-centric publishing companies (newspapers and magazines). Activity in the wide format segment (banners, grand format, trade show and retail signage) was steady and stable. There were a significant number of deals in the materials manufacturing segment, primarily due to the turmoil in the papermaking and distribution industry.



When we look at the seasonality of transactional activity, as shown in the chart below, we see a picture of the overall reduced activity, with a consistent downward trend each year as we get to the holiday season and year end.



Transactional activity tells us that an industry segment is undergoing change, however the number of deals does not tell us if that activity is indicative of positive or negative change. To determine a directional indication, we track the number of bankruptcy filings and non-bankruptcy plant closures and correlate this information with the overall transactional activity. Our thesis, born out over several years and confirmed by industry stats derived from other sources, is that an industry segment with a high number of transactions that is also experiencing closures and bankruptcies is or will be in a contraction phase. There will be opportunities for consolidation at bargain prices for those companies that defy the downward trend. This has certainly been true in the commercial printing segment (and obvious to even those outside our industry).

As we have noted over the past year, there have been warning signs emerging from our data in the wide format segment, especially in the undifferentiated end of the wide format business that offers wide format printing on a square foot pricing basis. Book printing has also been a difficult segment for some, with acquisition opportunities presenting from bankruptcies and closures.

Conversely, segments in which the number of transactions does not correlate directly with closures and bankruptcies are more likely to be expanding and consolidation opportunities will come at much higher prices. Virtually all the packaging segments are experiencing steady transactional activity, without the corresponding bankruptcy filings and plant closures, indicating a very healthy environment for sellers as the industry consolidates.



As noted, we also track activity in non-bankruptcy plant closures; many companies simply close up and just disappear without a formal bankruptcy filing. Other times, a closure does not mean that the company has ceased operating, it may simply be that one of the larger printing firms is “rationalizing” their production capacity. Either way, closures are indicative of change, usually resulting from downward pressure in a market segment. Consistent with the other data and as expected, general commercial printing companies represent the majority of printing facilities closing up shop.

Several binderies, book printing and newspaper printing companies closed up shop over the past year. Newspaper and magazine publishers and the printers that serve them have closed, as well as a number of paper mills affected by the reduction in demand for these papers.



When we look at the rationale behind the transactions in the commercial printing segment, we find a loud and clear predominance of tuck-in deals in which the customers of the acquired company are transitioned to the buyer’s production facility. In these tuck-in transactions, buyers will often leave the disposition of the plant and equipment to the seller, or to the seller’s agent, avoiding responsibility for trade and other debt, possibly “cherry picking” certain equipment that is needed or desirable for the smooth continued servicing of the acquired customers. In two instances out of the twenty-eight tuck-ins, the transaction was a “reverse tuck-in” in which the buyer acquired the assets and facility of the seller and moved their business into the purchased company.

Nonetheless, there were still eleven acquisitions in the commercial printing segment where the acquired facility was important and will remain in operation. That was especially notable in one acquisition of a retail inserts printing company and another transaction where the target company produced retail displays.

There were seven acquisitions where the acquirer noted that the purchased company added to their service offerings, as well as seven deals where the logic was to expand geographically. Of all thirty-nine transactions that we noted in the commercial printing segment, only four had a private equity sponsor and there were no companies purchased to form a new “platform” for building out a larger company.



The picture that emerges in the packaging segment is very different. Of the thirty-three transactions that we recorded over the past twelve months in the packaging segment, only two were reported to be tuck-ins, one that produced labels and one that manufactured folding cartons. In all the other cases, the buyers noted that the acquired location was an important element of the rationale to complete the deal. In some, the acquired company had multiple locations, or was global in scope. In eighteen instances, geographic expansion or diversity of the acquired locations was also noted as a key element in the buyer’s logic.

Private equity was involved in eighteen of the transactions, clear evidence that the roll-up model, with financial sponsorship from private equity, is in full swing across the various packaging segments. Interestingly, we did not note any new “platforms” being established by private equity in packaging, indicating to us that competition is already stiff among the existing players for packaging properties as they come on the market, squeezing out opportunities for the formation of new platform companies.



For our purposes in forming a picture of the various market segments that comprise the overall print-centric industries, we separate out companies that produce mostly wide format products from the more generalized commercial printing segment. Here we see proportionately fewer tuck-ins than in general commercial printing, with only three tuck-ins noted out of twelve total deals. The other nine transactions were based on maintaining operations at the acquired facility, some of which were significant in size.

Only two of the deals were based on adding wide format as a new service offering, which we attribute to the maturation of the wide format business and widespread adaption of these technologies into the larger industry. Three buyers noted geographic expansion as a fundamental reason for completing the acquisition; one of the larger deals was billed as a merger of equals and created a national footprint bridging east and west coasts. Four deals involved private equity firms, and there were two new platforms formed, indicating to us that private equity is taking note of the wide format segment.



And finally, we dug into the mailing services segment, which we have found to be more active over the past couple years. Of six deals we recorded, two were tuck-ins, in both cases the acquirer was a commercial printing company that was seeking to add mailing services or to expand and improve their current service offering. Private equity was not involved in any of the transactions and no new platform companies were formed. Two of the deals expanded the buyer’s business geographically, and in one transaction a commercial printing company acquired a fairly significant mailing services business, announcing that the acquired location would continue as a stand-alone operation.







2019 August - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
Wallace Carlson$10.7Minnetonka, MNJ-C PressNo DataOwatonna, MN8/30/19No DataAcquisitionCommercial printerLink
Champaign Multimedia GroupNo DataWest Frankfort, ILNews-Gazette MediaNo DataChampaign, IL8/30/19No DataAcquisitionCommunity newspapersLink
DIC Corporation$7,433Tokyo, JapanBASF Colors & Effects
(Div. BASF)		No DataLudwigshafen am Rhein, Germany8/29/19No DataAcquisitionPigmentsLink
DrummondNo DataJacksonville, FLPSP RetailNo DataDecatur, GA8/25/19No DataAcquisitionWide format & retail graphicsLink
United Business MailNo DataMinneapolis, MNCommingle Business
(Div. LSC Communications)		No DataAurora, IL8/21/19$11.3AcquisitionCommingling servicesLink
Paper Converting Machine Co.
(sub. Barry-Wehmiller)		No DataGreen Bay, WIRDP MarathonNo DataLaval, QC8/16/19No DataAcquisitionFlexo & gravure pressesLink
Paper Converting Machine Co.
(sub. Barry-Wehmiller)		No DataGreen Bay, WIIPT DigitalNo DataSarasota, FL8/16/19No DataAcquisitionFlexo press conversionsLink
Finch Paper
(Port co. Atlas & Blue Wolf)		$280Glen Falls, NYFrench Paper Co.No DataNiles, MI8/16/19No DataAcquisitionUncoated printing papersLink
SoliscoNo DataScott, QCNorecobNo DataSt-Jules, QC8/16/19No DataAcquisitionCatalog & book printingLink
Signature GraphicsNo DataPortland, ORTarget Media Northwest
(Div. Lee Enterprises)		No DataSpokane, WA8/13/19No DataAcquisitionRetail circular printingLink
Specialty Graphic Imaging Association (SGIA)No DataFairfax, VANAPCO MediaNo DataPhiladelphia, PA8/6/19No DataAcquisitionMagazine publisherLink
Phase 3 Marketing and Communications$26.0Atlanta, GAImagersNo DataAtlanta, GA8/6/19No DataAcquisitionCommercial printerLink
New Media Investment
(Parent of GateHouse Media)		$1,590New York, NYGannett$2,790McLean, VA8/5/19$1,380AcquisitionNewspaper publisherLink
Avant Publications
(Div. Champion Media Group)		No DataLaurinburg, NCTimes Leader
(Prop Civitas Media)		No DataWilkes-Barre, PA8/2/19No DataAcquisitionCommunity newspapersLink
Sappi$5,830Johannesburg,
South Africa		Paper mill
(Prop. Rayonier)		No DataMatane, QC8/1/19$175.0AcquisitionPulp MillLink


2019 August - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
Costello Industries, Inc.
dba Costello Printing & Design		8/26/19No Data19-23365Tarentum, PA3rdWestern PA
Pittsburgh		Gregory L. TaddonioChristopher M. Frye Commercial & book printing
Chapter 7 Filings:
Southeast Media, Inc.8/20/19No Data19-34639Conroe, TX5thSouthern TX
McAllen		Eduardo V. RodriguezTheresa D. Mobley Commercial Printing
WTD Printing, Inc.8/8/19No Data19-82352Decatur, AL11thNorthern AL
Decatur		Clifton R. Jessup Jr.John Zingarelli Printing & copying


2019 August - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Quad/Graphics - Printing facility9/14/19No DataShakopee, MNQuad GraphicsSussex, WI 8/14/19Retail inserts
Formerly Vertis printing facility		Link
LSC Communications - Printing plant11/30/19No DataTorrance, CALSC CommunicationsChicago, IL8/8/19Magazine & catalog printingLink
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Behind the Scenes in Photobooks – September 2019 M&A Activity

October 7, 2019, 8:03 pm
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Seattle-based RPI announced the acquisition of on-demand printing assets from SoftPrint Holdings. The acquired assets include the ColorCentric production facility located in Rochester, New York. The acquisition includes ColorCentric’s “printernet” software that drives personalized print-on-demand production of products that are produced by a network of printing companies located in Canada, Australia, and New Zealand, as well as in the United States. The ColorCentric model layers perfectly onto the RPI business-to-business model, producing photobooks and other personalized printed products for resellers.

Cruise all the available pages on the RPI and ColorCentric websites, and try as you might, you will not find the expected photobook app to build your own personalized photobook, calendar, holiday card or other printed items. Nor can you find a way to place an order. That’s because RPI, and the newly acquired ColorCentric, operate behind the scenes as “white label” back-end manufacturers for other online websites, large scale retailers and commercial print providers.

With financial backing from private equity firm Riverlake Partners and additional funding from HCAP Partners, RPI has added onto its original west-coast production platform, establishing RPI Europe in 2011 with the purchase of Paro, a printing company in Eindhoven, the Netherlands. In 2013, the company reached across the US to establish an east coast manufacturing facility with the acquisition of DPI in Atlanta, Georgia.

RPI was not originally a technology start-up, rather the company had its roots firmly in commercial and document printing, having been established in Seattle back in 1979 as Reischling Press. In what must have been a move fraught with risk and uncertainty, the company made the prescient decision in 2006 to jettison its commercial print division and shift exclusively to private label manufacturing for e-commerce companies. With the explosion of the market for on-demand printed products, now widely available online and also at retail big-box stores, it appears to have been a good move. 

However, with this latest deal, there appears to be a shift in strategy afoot at RPI: the acquisition from SoftPrint Holdings also included Picaboo.com, the consumer-facing website. In addition to the usual photobooks, calendars and holiday cards, Picaboo also offers the latest rage in consumer printed products, personalized home décor items including wall canvas prints, photo panels, metal prints, and fabric items such as personalized pillows and blankets. Unlike RPI, which started as a printing company, Picaboo was founded as a pure technology solution company in 2002 in the midst of the dot-com bust. With venture capital backing secured in 2004, the company launched its desktop photo album software in 2005, eventually transitioning to an exclusively browser-based application. In contrast to the ColorCentric platform, a visitor to Picaboo.com is quickly guided to build a personalized product and place a direct order.

With Picaboo, RPI will be up against some very formidable competition from the twin print personalization giants Shutterfly and Snapfish. Both are now owned by Apollo Global Management which purchased the companies three months ago. (See The Target Report: June 2019, Photobooks & Personalized Consumer Products).

We expect that there will be fallout in the market for photobooks and personalized products, which has rapidly matured along with the sophistication of online tools, digital printing technologies and automation to drive efficient print production. We checked back to see how another online photobook company, Chatbooks, is doing in this hypercompetitive market. With funding from Aries Capital Partners, the company appears to still be in the game, albeit with a much more limited offering than the competition. (To see their clever and entertaining consumer print marketing that is still worth a look and a laugh, see The Target Report: February 2017, Consumer Web-to-Print).

Packaging

Transcontinental continues its steady strategic transformation from a printing and publishing company into a packaging powerhouse. Canada’s largest printing company acquired Trilex, a plastics and packaging company in Ecuador that specializes in the production and sale of packaging materials and protective barriers for banana farmers. Further executing its two-prong transitional strategy (acquire packaging assets; divest publishing assets), Transcontinental sold the majority of its specialty media publications and event planning activities to the Contex Group and Newcom Media. (For more about the transformation of Transcontinental, including charts of acquisitions and divestitures since the company embarked on this journey, see The Target Report: April 2018, Getting Flexible in Your Middle Years).

Lebelink, based in Anjou, Quebec, acquired label printer Labelix, located in nearby Granby. Labelink produces a wide variety of products, including shrink sleeves and flexible packaging. The company has four facilities in Canada and one in Fredericksburg, Virginia.

Commercial Printing and Diversified Services

Wise Business Forms, a print provider selling exclusively via print resellers and distributors, acquired Shawnee Systems, a trade-only print manufacturer located in Cincinnati, Ohio that produces business forms. Wise, headquartered in Alpharetta, Georgia, has five manufacturing locations, extending up the eastern coast to Maine and west to Indiana.

Commercial printing company, Range Printing, based in Brainerd, Minnesota announced the acquisition of Spectrum Marketing Services, a regional printing company with strength in the decorated apparel segment.

In an unusual move, three trade creditors of the defunct Colortree Group, which closed its doors abruptly in June, filed a petition in the US Bankruptcy Court in September to force the remnants of the company into an involuntary Chapter 7. Presumably, the creditors wanted to gain some court oversight of the process and have a seat at the table. The filing will mean that a trustee will be appointed to oversee the disposition of remaining assets to the unsecured creditors, if any, after satisfaction of administrative and secured claims. (See The Target Report: June 2019 M&A Activity).


2019 September - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
Range PrintingNo DataBrainerd, MNSpectrum Marketing ServicesNo DataLittle Falls, MN9/30/19No DataAcquisitionCommercial printingLink
EO Media GroupNo DataThe Bulletin
(Prop. Western Communications)		No DataBend, OR9/25/19$0.8363 Sale in Ch. 11Community newspaperLink
RPI
(Port co. Riverlake Partners)		No DataSeattle, WAPicaboo.com
(Div. SoftPrint Holdings)		No DataBoise, ID9/25/19No DataAsset AcquisitionPhotobook printingLink
RPI
(Port co. Riverlake Partners)		No DataSeattle, WAColorCentric / Printernet
(Div. SoftPrint Holdings)		No DataRochester, NY9/25/19No DataAsset AcquisitionPhotobook printingLink
Vox MediaNo DataWashington, DCNew York MediaNo DataNew York, NY9/24/19No DataAcquisitionMagazine publisherLink
OrafolNo DataOranienburg,
Germany		Kay Automotive GraphicsNo DataLake Orion, MI9/19/19No DataAcquisitionIndustrial printingLink
Contex GroupNo DataMontreal, QCSpecialty media assets
(Prop. Transcontinental)		No DataMontreal, QC9/19/19No DataAcquisitionBusiness publicationsLink
Newcom MediaNo DataEtobicoke, ONSpecialty media assets
(Prop. Transcontinental)		No DataMontreal, QC9/19/19No DataAcquisitionInvestment publicationsLink
LabelinkNo DataAnjou, QCLabelixNo DataGranby, QC9/18/19No DataAcquisitionLabelsLink
Wise Business FormsNo DataAlpharetta, GAShawnee SystemsNo DataCincinnati9/18/19No DataAcquisitionForms printingLink
East Arkansas BroadcastersNo DataJonesboro, ARStuttgart Daily Leader
(Prop. Gatehouse Media)		No DataStuttgart, AR9/17/19No DataAcquisitionCommunity newspaperLink
Southland PrintingNo DataShreveport, LADigital Printing SystemsNo DataAzuza, CA9/9/19No DataAsset acquisition
(Strategic Growth)		Parking system ticketsLink
Transcontinental$1,957Montreal, QCTrilexNo DataGuayaquil,
Ecuador		9/5/19No DataPurchase of Majority InterestPlastic packagingLink
FCA Packaging
(Port co. Delos Capital)		No DataMoline, ILTranspak
(Div. Quad/Graphics)		No Data
($4,220)		Sussex, WI9/4/19$10.0AcquisitionIndustrial wood cratingLink
Curated Experiences GroupNo DataTampa Bay, FLEditor and Publisher
(Prop. Duncan McIntosh Co.)		No DataIrvine, CA9/3/19No DataAcquisitionTrade news publisherLink


2019 September - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
No Chapter 11 Filings Found this Month---------------------------
Chapter 7 Filings:
Colortree Group, Inc.9/11/19$57.019-34739Richmond, VA4thEastern VA
Richmond		Keith L. PhillipsPro SeDirect mail & envelope printing


2019 September - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Midlands Printing10/16/19No DataCamden, SCN/ANoneSep-19Commercial printingLink
Lifetouch - Printing facility11/6/19No DataLoves Park, ILLifetouchEden Prairie, MNSep-19Yearbook printingLink
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Market for Label Printing Catches Fire – October 2019 M&A Activity

November 7, 2019, 8:46 pm
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The number of M&A transactions in the label printing segment shot up in October after several rather tepid months including three months in the last twelve in which we found no acquisitions of label printing companies. One reason for the slow pace of new label deals may be because valuations are reportedly at record highs for companies that print labels. With purchase price multiples near or even exceeding double digits, buyers in the label segment are being especially careful, extending due diligence and digging deep to make sure the high price is warranted. Nonetheless and despite high valuations, competition for the most viable acquisition candidates is stiff and almost entirely fueled by large private equity funds seeking to build out their existing label platforms. Without exception, recent deals have been backed by investment funds with billions of dollars to invest. Smaller players are being priced out of the action.

ProMach acquired Jet Label, based in Edmonton, Alberta. With over $827 million in total revenues, ProMach’s primary business is not label printing and converting, rather the company mostly designs and manufactures over 300 models of machinery that make, fill, cap, close, seal, wrap, convey and transport a wide variety of packaging types. With the acquisition of Jet Label, the company expands its limited, but growing, presence in label printing and converting. The addition of Jet Label adds a seventh label converting facility to the six existing converting plants that extend from California to New Hampshire. A sideline of the much larger machinery business, ProMach’s ID Technology division provides its customers with prime labels, printed tapes and coding systems that complement the packaging processes enabled by the core equipment side of the business. Leonard Green & Company, the private equity fund that owns ProMach, traces its roots back to 1969 and the early days of the private leveraged buyout. The fund now has more than $23.5 billion under management.

Label rollup company Fort Dearborn acquired substantially all of the assets of Walle Corporation, a label printing company located in Alpharetta, Georgia. Walle ran into financial difficulty and liquidity constraints which led to the marketing and sale of the company. The acquired assets include an offset plant in New Orleans that produces cut and stack paper labels, as well as film and in-mold labels. The company also has a flexo plant in Winchester, Kentucky that produces roll-fed and shrink-sleeve labels. Fort Dearborn has appeared on The Target Report deal logs five times as the buyer and in 2016 as the seller when the company was acquired by private equity firm Advent International. (See The Target Report: August 2016, Private Equity Loves Labels). Advent is truly international, with investments in 41 countries and $54.3 billion under its management. Company owners in the commercial printing segment will also know of one of Advent’s other portfolio companies, Williams Lea Tag, the print management company. Printing company owners cringe and prepare for hardball negotiating upon learning that one of their clients is shifting their print spend to Williams Lea. (See The Target Report: August 2017, Williams Lea Tag is on the Move).



Inovar Packaging Group, based in Dallas, acquired Flexo-Graphics, a label printing company located in Butler, Wisconsin. The acquisition establishes Inovar in the Midwest in addition to its plants in New England, Florida and Texas. Inovar has enjoyed the financial sponsorship of AEA Investors since 2016 and has appeared as a buyer of label companies six times on our deal logs since. AEA Investors is also a big player in the rigid plastic and glass packaging segments, having acquired TricorBraun, also in 2016. AEA Investors is not a newcomer to the private equity business and does not seek institutional investors, rather it’s more of a “super family office” that was founded in 1968 by Rockefeller, Mellon and Harriman family interests. With over $15 billion under management, the fund includes more than “75 participants who include some of the world’s pre-eminent industrial families, business executives and former government leaders” who clearly believe that packaging is a good investment.

PPC Flexible Packaging, a portfolio company of Morgan Stanley Capital, has acquired Popular Ink from Highlander Partners. Popular Ink, located in McKinney, Texas, produces pressure sensitive labels, as well as shrink sleeves and various forms of flexible packaging including stick packs, pouches and stand-up bags. Earlier this year, PPC acquired HFM Packaging, the same month that Platinum Equity purchased label printer Multi-Color Corporation and merged it with WS Packaging, forming one of the largest of the consolidations in the segment. (See The Target Report: February 2019, Platinum Equity Likes Print). Morgan Stanley Capital Partners is the private equity segment of Morgan Stanley, the financial services firm with over $40 billion in annual revenues.

Fortis Solutions Group, usually an active participant in the stiff competition for desirable acquisition targets in the label segment, recently chose instead to go down the organic path to growth and opened a greenfield startup plant in Napa, California. The new plant was established specifically to focus on the wine, craft beer and spirits industries. The new facility will operate both flexo and digital offset presses. However, don’t count Fortis out of the acquisition game; the company earlier this year acquired Infinite Packaging from Svoboda Capital Partners which itself had rolled up several label printers to create Infinite. Fortis is a portfolio company of Main Post Partners. Main Post is a relative newcomer to the private equity scene, established in 2014 with “only” $1.1 billion now under its management.

Eschewing the more lucrative exit route in the hot label segment and not selling to a private equity-backed rollup, Macaran Printed Products, located in Cohoes, New York, has become a 100% employee owned company. The owner noted that he chose the ESOP route when selling the company to protect and reward his 55 employees. The company primarily prints pressure sensitive labels. The new owners, the employees, will need to work diligently and find ways to fund ESOP requirements and still be able to reinvest in the latest technology needed to survive and grow in the consolidating and highly competitive label business. As evidenced by the recent M&A trends in the label printing segment, their competitors are increasingly owned by and financially supported by super-sized investment funds that will invest to grow their label printing platform companies.

Commercial Printing and Diversified Services

Transcontinental, the largest printing company in Canada, which has been laser-focused on transforming itself from a magazine and newspaper publisher and printer into a packaging company, veered off course and acquired Holland & Crosby. The purchased company is based in Mississauga, Ontario and produces wide format printing and in-store displays for retail. Since we first wrote about Transcontinental and its transformative strategy back in 2014, the company has been a consistent serial acquirer of flexible packaging assets, culminating in the mega deal in which the company acquired Coveris Americas. Over the same time period, Transcontinental methodically divested newspaper and non-differentiated commercial printing assets. The acquisitions and divestitures combined to make packaging the source of more than half of the company’s revenues. (See The Target Report: April 2018, Getting Flexible in Your Middle Years).

As we noted in our annual review of M&A activity in September, there has been an increase in the number of acquisitions of mailing service and fulfillment-related companies over the past two years. In that vein, Court Square Capital Partners acquired Lakewood, New Jersey-based J. Knipper and Company. Knipper provides direct mail and fulfillment services exclusively to the pharmaceutical, biotech and medical device markets. Specialized services include sample programs that require stringent compliance with FDA and other regulatory agencies. Direct mail and print management are part of a larger “value-added” offering.

H.I.G. Capital once again voted with its wallet and expressed confidence in print-centric businesses with a major “growth investment” in Circle Graphics. Based in the Denver area, Circle Graphics is a highly focused powerhouse in the production of outdoor advertising graphics for the billboard industry. According to industry sources, the company has established itself as the low-cost provider utilizing custom-made digital printers and in-house ink production, effectively dominating the outdoor market. A second division of Circle Graphics provides personalized custom wall décor as well as pre-designed art images, serving the growing market for creating highly individualized environments utilizing digital printing technologies. 

2019 October - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
ProMach
(Port co Leonard Green & Partners)		$827.0Covington, KYJet LabelNo DataEdmonton, AB10/31/19No DataAcquisitionLabel printingLink
Fort Dearborn
(Port co. Advent International)		$478.1Elk Grove, ILWalleNo DataAlpharetta, GA10/31/19No DataAsset Acquisition
(SSG Capital Advisors)		Label printingLink
Graphic Systems ServicesNo DataSpringboro, OHGlobal Web FinishingNo DataMerrillville, IN10/29/19No DataAcquisitionWeb finishing systemsLink
Paragon Group$1,300London, UKEuro Global Document Solutions
(Div. R.R. Donnelley)		$270.0
($6,410)		Chicago, IL10/28/19No DataAcquisitionDocument managementLink
H2 Equity PartnersNo DataAmsterdam, NetherlandsContiweb
(Port co. American Ind. Partners)		No DataBoxmeer, Netherlands10/23/19No DataAcquisitionWeb handling systemsLink
Macaran Printed Products ESOPNo DataCohoes, NYMacaran Printed Products
(Div. W.N. Van Alstine & Sons)		No DataCohoes, NY10/16/19No DataSale to ESOPLabel printingLink
Inovar Packaging Group
(Port co. AEA Investors)		No DataDallas, TXFlexo-GraphicsNo DataButler, WI10/15/19No DataAcquisitionLabel printingLink
Solutions in Print$17.0Davenport, IAPerformance GroupNo DataOmaha, NE10/15/19No DataAcquisition
(Corp Dev Assoc)		Print managementLink
Schneps MediaNo DataNew York, NYAM New York
(Prop. Newsday)		No DataMelville, NY10/11/19No DataAcquisitionCommunity newspaperLink
Atar CapitalNo DataLos Angeles, CAKeypoint Intelligence
(InfoTrends & Buyers Lab)		No DataFairfield, NJ10/10/19No DataAcquisitionDigital imaging analysisLink
PPC Flexible Packaging
(Port co Morgan Stanley Capital)		No DataBuffalo Grove, ILPopular Ink
(Port co Highlander Partners)		No DataMcKinney, TX10/9/19No DataAcquisitionFlexible packaging & labelsLink
Inland Press Association
(America's Newspapers)		No DataDes Plaines, ILSouthern Newspaper Publishers AssociationNo DataAtlanta, GA10/8/19No DataMergerTrade associationLink
Novolex
(Port co. Carlyle Group)		No DataHartsville, SCZenith Specialty BagsNo DataCity of Industry, CA10/4/19No DataAcquisitionFood packagingLink
Court Square Capital PartnersNo DataNew York, NYJ. Knipper and CompanyNo DataLakewood, NJ10/2/19No DataAcquisitionDirect mail & fulfillmentLink
H.I.G. CapitalNo DataMiami, FLCircle Graphic HoldingsNo DataLongmont, CO10/2/19No DataInvestmentOut-of-home graphicsLink
Transcontinental$1,957Montreal, QCHolland & CrosbyNo DataMississauga, ON10/2/19No DataAcquisition
(New Direction)		Wide format, in-store displayLink


2019 October - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
Tiger Oak Media, Incorporated10/7/19No Data19-43029Minneapolis, MN8thMinnesota
Minneapolis		Michael E. RidgwaySteven B. NosekRegional magazine publishing
No Chapter 7 Filings Found this Month---------------------------


2019 October - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Sentinel PrintingDec-19No DataSt. Cloud, MNCJK GroupBrainerd, MNOct-19Consolidating plantsLink
Family Circle MagazineDec-19No DataDes Moines, IAMeredithDes Moines, IAOct-19Ceasing publicationLink
Keystone MillbrookDec-19No DataGrand Ledge, MIN/ANoneOct-19Commercial printingLink
CRT Custom ProductsDec-19No DataWhites Creek, TNN/ANoneOct-19Folding cartonsLink
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Search

Commercial Printing: Consolidation or Regional Expansion? – November 2019 M&A Activity

December 7, 2019, 8:29 pm
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Three out of every four transactions in the commercial printing business are structured as a “tuck-in.” The buyer folds the acquired customers into their existing production capacity, hires selected qualified employees, with special focus on those people that touch the customer, and maybe cherry-picks some of the equipment. The seller is left to close up shop, sell off the remaining equipment and wind-down the business entity.

What about the one out of four transactions that is not a tuck-in? Is another trend emerging in the consolidating commercial printing segment?

Mittera Group, the Iowa-based commercial printing juggernaut, acquired the business assets of Chicagoland commercial printer Fuse. Mittera is now the most active consolidator in the commercial printing segment and arguably the only player on the national stage since the heady days when CGX and Mail-Well, fueled by debt and public stock, were competing to build out national multi-location commercial print production platforms. Privately held Mittera is now a “roll-up of roll-ups,” snapping up smaller consolidators when they become available for purchase. (See The Target Report: December 2018, Consolidation in Commercial Printing Rolls On).

Fuse was the mini roll-up comprised of the former Kelmscott Communications, Rider Dickerson and Buhl Press. The three companies were mashed together in 2016 with reported combined revenues of $40 million. As is the case with seventy-five percent of all acquisitions in the commercial printing business, the driving logic behind the creation of Fuse was the consolidation of the operations of all three companies. After a build-out of the Buhl Press facility in Berkeley, Illinois, the other two production facilities were shuttered and the business “tucked-in” under one roof. The Fuse roll-up rolled onward in 2018 with the acquisition of Digital Hub, but then stalled. Now Fuse has itself become the acquisition target of the much larger Mittera.

However, the Fuse deal is different than the great majority of acquisitions that we list in The Target Report in the commercial printing segment in which the acquired facility is closed. In this case, Mittera has announced plans to continue operating in the Fuse facility. According to the new president of the Fuse business, now rebadged Mittera Chicago, the company is committed to “grow our Chicagoland presence,” indicating that the acquisition of Fuse will not be another closure and tuck-in. Rather, the deal represents a regional expansion of Mittera’s production footprint.

Knepper Press, the diversified printing services company located adjacent to the Pittsburgh International Airport, purchased Dual Print & Mail in upstate New York.* Dual Print & Mail was formerly owned by digital direct mail printer Compu-Mail which had acquired the troubled web and sheetfed printer in 2014. Compu-Mail’s goal was to secure a reliable local source for offset printing that was adjunctive to its core digital direct mail business. After effecting a turnaround of Dual Print & Mail, Compu-Mail decided to exit the offset business.

In what turned out to be fortuitous timing for Dual Print & Mail, Knepper Press had earlier this year acquired TBN, the commercial printing business of The Buffalo News. The acquisition of TBN was a strategic move to reach into the Buffalo, New York region. (See The Target Report: April 2019, Commercial Printing and Convergence of Diversified Services). Operating from its secure position in the Pittsburgh market, Knepper’s next step was to acquire a production facility in the upstate New York region to support and augment the newly acquired TBN business. The acquisition of Dual Print & Mail cements the regional expansion strategy and brings a second fully equipped web and sheetfed offset facility under Knepper’s ownership and management.

Knepper Press and Dual Print & Mail will continue to operate as separate stand-alone facilities, sharing resources and seeking to achieve increased efficiencies across a multi-plant production platform. Unlike Mittera, Knepper’s plan does not appear to be part of a larger roll-up strategy, rather the acquisition was a strategic expansion into another metropolitan region that is within a reasonable driving distance from the company’s core market. But, at least in one respect, Knepper’s purchase of Dual Print & Mail is similar to the Mittera acquisition of Fuse; unlike the majority of deals in commercial printing; the plants in these two cases will continue to operate.

A similar expansion strategy has been methodically executed by Drummond, a commercial printing and graphic services company headquartered in Jacksonville, Florida. Through a series of acquisitions, beginning in 2012, Drummond has built out a considerable commercial printing presence in the greater Atlanta, Georgia metropolitan area. While some of the Drummond acquisitions have been consolidated into a unified production platform via classic “tuck-in” transactions, the company has clearly committed to building a permanent presence in the Atlanta market while maintaining their original Florida operation. Most recently, Drummond acquired PSP Retail with 90,000 square feet of production space in Decatur, Georgia. The acquired company produces in-store graphics and signage. According to the CEO of Drummond, the acquisition resulted in “two complimentary operations” in the Atlanta market. There was no mention of a tuck-in of acquired operations into one of the company’s existing facilities.

Mittera, Knepper and Drummond represent a sub-trend within the larger market for commercial printing companies. Each has established a strong core geographic base (e.g. Des Moines, Pittsburgh, Jacksonville) and is growing strategically by establishing a stake in a new region and then building out from there with additional acquisitions (or in the case with Mittera, acquiring former consolidators).

However, we do not expect the basic underlying dynamic in the commercial printing segment to change. Demand for commercial printing services is predicted to decline, albeit at a rate that is less drastic than in the past decade. That decline will drive more consolidation. These market conditions mean that in all likelihood three out of every four transactions will continue to be “tuck-ins” in which the acquired business is closed, and customers and key employees are transitioned to the acquirer’s existing production facility. Nonetheless, we note that another trend is emerging in which financially healthy and operationally efficient regional companies leapfrog to an adjacent metro market and build out an additional geographic market position via a series of strategically sound acquisitions.

Diversified Graphic and Marketing Services

H.I.G. Capital is on a tear, making significant investments in print-centric companies, and now is invested across the printing industry, from digital to display to direct mail.



In its latest move, H.I.G. portfolio company Vision Integrated Graphics has acquired SourceLink Acquisition. The acquired company provides personalized marketing solutions using proprietary data modeling. Notably, the purchase includes the New York-based boutique digital agency Path Interactive which SourceLink acquired in 2018.

While both Vision Integrated Graphics and SourceLink Acquisition are prodigious producers of direct mail and other print-centric graphic communications, the sizzle is in the data-analytics, predictive modeling, creative services and multi-channel execution that drives higher response rates. Layered on top of, and obscuring the company’s core print production, SourceLink touts its digital team and non-print services including SEO, paid search, social media, digital media, design, and video production.

Despite the dominance of digital marketing services in the customer-facing messages from Vision and SourceLink, it’s clear from the roster of H.I.G. acquisitions over the past several years that this global private equity powerhouse believes in the future of print.

* Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to Dual Print & Mail in this transaction.

2019 November - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
Knepper PressNo DataClinton, PADual Print & MailNo DataCheektowaga, NY11/29/19No DataMerger
(Graphic Arts Advisors)		Commercial printingLink
ImpactNo DataMinneapolis, MNInfinity DirectNo DataPlymouth, MN11/27/19No DataAcquisitionDirect mail marketingLink
All American Label and PackagingNo DataDublin, CALabel Art of CaliforniaNo DataOakland, CA11/22/19No DataAcquisitionLabel printingLink
Avery Dennison$7,070Glendale, CATransponder Business
(Div. Smartrac)		$140.0Amsterdam,
The Netherlands		11/21/19$252AcquisitionRFID InlaysLink
Mittera GroupNo DataDes Moines, IAFuseNo DataBerkeley, IL11/21/19No DataAsset AcquisitionCommercial printingLink
Vision Integrated Graphics
(Port co. H.I.G. Capital)		No DataBolingbrook, ILSourceLink AcquisitionNo DataItasca, IL11/21/19No DataAcquisitionDirect Mail & MarketingLink
J.S. McCarthy Printers ESOPNo DataAugusta, MEJ.S. McCarthy PrintersNo DataAugusta, ME11/20/19No DataAcquisitionCommercial printingLink
CFSNo DataNorton, MAThe Field CompaniesNo DataWatertown, MA11/15/19No DataAcquisitionPrint & fulfillment servicesLink
CCL Industries$4,035Toronto, ONStuck on You Holdings$8.3Breakwater,
Australia		11/14/19$8.1AcquisitionCustomized labelsLink
Walker360No DataMontgomery, ALAmerican Printing CoNo DataBirmingham, AL11/12/19No Data363 Sale in Ch. 11Commercial printingLink
POS Professional Office ServicesNo DataWaterloo, IAPalmer PrintingNo DataWaite Park, MN11/11/19No DataAcquisitionCommercial printingLink
AR Metallizing
(Div. Nissha)		No DataGenk, BelgiumEurofoil Paper CoatingNo DataBerlin, Germany11/8/19No DataAcquisitionSpecialty substratesLink
Global GraphicsNo DataCambridge, UKXitron
(Div. Vanguard Graphics Int'l)		$4.8Ann Arbor, MI11/8/19$4.5AcquisitionPrint imaging softwareLink
Fujifilm$20,846Tokyo, JapanFuji Xerox$11,100Tokyo, Japan11/5/19$2,300Buyout of MinorityDigital printing devicesLink
Stouse
(Port co. Goldner Hawn)		No DataNew Century, KSMagna-PlusNo DataKansas City, KS11/4/19No DataAcquisitionLabel printing & promoLink
Northwestern Printers Mngt.No DataHays, KSNorthwestern PrintersNo DataHays, KS11/2/19No DataMngt. BuyoutPrinting & copyingLink


2019 November - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
First Class Printing, Inc.11/6/19No Data19-14730Fayetteville, TN6thEastern TN
Chattanooga		Shelley D. RuckerSteven L. LefkovitzCommercial printing
Beach Mountain Press, Inc.
(DBA Minuteman Press)		11/18/19No Data19-71508Roanoke, VA4thWestern VA
Roanoke		Paul M. BlackRichard Daniel Scott Printing & copying
J&M Printing, Inc.11/12/19No Data19-27028Rocklin, CA9thEastern CA
Fresno		Fredrick ClementDale A. OrthnerCommercial printing


2019 November - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Impika inkjet manufacturing facilityTBDNo DataAubagne, FranceXeroxNorwalk, CT11/26/19Inkjet productionLink
LSC Communications - Printing facilityDec-19No DataPhiladelphia, PALSC CommunicationsChicago, ILNov-19Bible printingLink
American Printing1/30/20No DataBirmingham, ALN/ANoneNov-19Commercial printingLink
Melnor Graphics2/10/20No DataToledo, OHN/ANoneNov-19Retail insert printingLink
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The Penguin’s Native Tongue is Now German – December 2019 M&A Activity

January 6, 2020, 2:46 pm
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Bertelsmann, the massive media company based in Germany, has announced that it will soon become the sole owner of Penguin Random House. Upon approval by regulators, which is expected, the company will purchase the remaining 25-percent of the joint-venture now owned by Pearson, the UK-based publisher that is shedding non-educational assets. Penguin, owned by Pearson, and Random House, owned by Bertelsmann, came together in 2013 to form the world’s largest book publishing group, bringing many familiar names under one roof. Much of the publishing industry had been in continuous “roll-up” mode for decades, similar to the printing industry; the joint-venture was one more continuation of that process. Previous acquisitions on both sides of the joint venture included well-known and respected publishing houses including Doubleday, Modern Library, Alfred A. Knopf, Pantheon, Ballantine Books, Bantam, Dell, and many others. 

One of the most famous and historic trade names of the combined entity was Penguin, surviving the latest merger and still enshrined on the company marquee, slated to remain the lead name in the new wholly-owned subsidiary of the Bertelsmann publishing division. The new entity will, amazingly, consist of more than 300 different brands or “imprints” under which the company publishes books. Similar to how the Volkswagen, Audi, Porsche and Bentley brands are all manufactured by one company but target different customers, all 300 imprints will be published under the overarching Bertelsmann umbrella, but marketed to different audiences and demographic segments. Like the VW Beetle, the Penguin imprint got its start in the 1930’s and was conceived as a low-cost alternative to traditional methods, effectively accomplishing its intended function, but priced to be affordable to the masses.

Penguin founder Sir Allen Lane had publishing in his blood. He rose quickly from apprentice to the position of managing editor at his uncle’s publishing company. Sir Allen took risks; he was the first to publish James Joyce’s highly controversial Ulysses in England (much later in life, taking another risk, he purposely published an uncensored edition of D.H. Lawrence’s Lady Chatterley’s Lover just to test the censorship laws in England). In 1934, when traveling back from a weekend visit with mystery writer Agatha Christie at her country home, he found himself without something to read and was aghast that the only reading material available at the train station were magazines and reprints of Victorian novels. Hence, the idea was born for inexpensive editions of quality literature, sold in vending machines and at non-traditional outlets for books such as tobacco stores and, of course, railway stations. Sir Allen priced the original editions equal to a pack of cigarettes, so low that some authors, including George Orwell, took it upon themselves to protest the idea which they believed would undermine the market for books.

The idea was not new, however. Several years before, a German company had established Albatross Books in Hamburg based on the same ideal of publishing inexpensive paperback versions of quality literature. Not only did Sir Allen adopt the use of a bird as the brand name and the logo, his books, like the German predecessor, were sized to approximate the proportions of the golden ratio, used modern sans-serif fonts, and eschewed the use of illustrations on the covers favoring instead simple graphic treatment with typography and color-coded by genre.

Dancing Penguin from 1938
The idea took off and eventually other publishers and authors agreed to sell Penguin the rights to publish an inexpensive paperback edition of their titles under the Penguin imprint. Penguin titles were primarily focused on great fiction (best-known for the orange banded covers) but also included crime novels (green), travel and adventure (pink), biographies (dark blue), drama (red), essays (purple), miscellaneous (yellow) and world affairs (grey). The success of the Penguin brand was followed up by Pelican Books (light blue) which published non-fiction titles, and then by Puffin Books for children. The original name for the brand was suggested by a typist listening in on Sir Allen’s conversation. He then sent a young staff member off to the London Zoo to draw the original Penguin logo. The logo morphed over the years, sometimes upright and stiff, other times happily dancing. Occasionally, the book was embellished with a pair of back-to-back dancing penguins, for reasons that are no longer obvious or explained.

According to recent reports, it appears that the market for printed books has stabilized, or at worst, is declining only slightly. Print, at least when it comes to books, is not dead, nor is the printed book on life support as appears to be the case for many newspapers and magazines. To support its commitment to printed communications, especially books, Bertelsmann’s subsidiary Bertelsmann Printing Group maintains a global staff in excess of 8,200 employees, with more than 20 manufacturing sites in Europe and the U.S. If it were a standalone company, the Bertelsmann Printing Group would be the largest printing company in Europe. On a global basis the company’s revenue is approximately $1.8 billion annually.

In the U.S., Bertelsmann has acquired several companies and operates plants that specialize in book printing and related services. Berryville Graphics, in Virginia, operates a highly automated hardcover and softcover book manufacturing facility. Coral Graphics, located on Long Island, New York, with additional facilities in Virginia and Kentucky, prints highly decorated book components including book covers, jackets and inserts. Offset Paperback Manufacturers (OPM), located in northeast Pennsylvania, produces several hundred million paperbacks each year. The U.S. operations combined employ 1,300 with revenues in excess of $230 million.

It’s been 88 years since two Germans and an Englishman launched the predecessor concept to Penguin Books in Hamburg. Through the vicissitudes of world events, Albatross Books was eventually shuttered and one of its founders emigrated to America and eventually headed up Penguin Books in the U.S., the successor to his own original concept. Later this year, the world’s leading company that produces inexpensive books produced for the masses goes home to roost in Germany.

Commercial Printing and Diversified Services

Walsworth, with reported revenues just shy of $180 million and based in Marceline, Missouri, announced the acquisition of Ripon Printers, located in Wisconsin. More than half of Walworth’s business is book manufacturing with a specialty in the production of yearbooks. The company also prints magazines, catalogs and general commercial work. With revenues of $50 million, the Ripon acquisition significantly moves the needle for Walsworth and brings additional catalog and magazine work to the mix, as well as direct mail and fulfillment services.

Print Management Services

Another global private equity investment firm has entered the marketing execution services business, suggesting that at least this firm of financial investors believes there is still more margin to squeeze out of suppliers in the marketing services supply chain. This time Blackstone, the third largest private equity firm in the world, has acquired a substantial minority interest in HH Global, the UK-based procurement and creative production company. Lest sellers of graphic communication products have any doubt about HH Global’s core deliverable, the company’s website makes it clear; their services, in order, are print procurement, point-of-sale procurement, packaging procurement, and promotional products procurement. Procurement.

Blackstone’s investment follows the acquisition of Williams Lea Tag by Advent International in 2017, now the tenth largest global private equity fund (See The Target Report: August 2017, Williams Lea Tag is on the Move). We expect that private equity’s entry into the mix portends even more competitive pricing pressure on suppliers when these print management service companies come knocking.


2019 December - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
Sonoma Media InvestmentsNo DataSanta Rosa, CASonoma County Gazette$0.5Forestville, CA12/27/19No DataAcquisitionCommunity newspaperLink
Taylor Printing GroupNo DataFredericton, NBBounty Print (Nova Scotia Ops)
(Div. SaltWire Network)		No DataHalifax, NS12/19/19No DataAcquisitionCommercial printingLink
Walsworth$179.3Marceline, MORipon Printers$50.0Ripon, WI12/18/19No DataAcquisitionCommercial printingLink
Delta Media Group
(Affil. O'Rourke Media Group)		No DataKiel, WIRipon Commonwealth PressNo DataRipon, WI12/18/19No DataAcquisitionCommunity newspaperLink
Bertelsmann$19,600Gütersloh, GermanyPenguin Random HouseNo DataNew York, NY12/18/19$675.0Buyout of MinorityBook publisherLink
The Daily GazetteNo DataSchenectady, NYThe Recorder
(Prop. McClary Media)		No DataAmsterdam, NY12/16/19No DataAcquisitionCommunity newspaperLink
Greg EllisonNo DataDenver, COSpeedPro DenverNo DataDenver, CO12/13/19No DataAcquisitionWide format franchiseLink
Fineline Technologies
(Port co. Summit Partners)		$110.0Norcross, GAConsolidated PrintingNo DataVan Buren, AR12/12/19No DataAcquisitionTicket printingLink
Palm Beach Media Group
(Sub. Hour Media Group)		No DataTroy, MIGulfstream Media GroupNo DataFt. Lauderdale, FL12/11/19No DataAcquisitionMagazine publisherLink
Tenex Capital ManagementNo DataNew York, NYOrbus Exhibit & Display GroupNo DataWoodbridge, IL12/5/19No DataAcquisitionTrade show displaysLink
BlackstoneNo DataNew York, NYHH GlobalNo DataLondon, UK12/3/19No DataMinority InterestMarketing execution servicesLink
Bloom Family Sir SpeedyNo DataWestbury, NYBigTime DesignsNo DataHauppauge, NY12/1/19No DataAcquisitionWide format printingLink


2019 December - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
Print Mates, Inc.
(Div. Generation Next Franchise Brands, Inc.)		12--15-19No Data19-17923San Diego, CA9thNevada
Las Vegas		Mike K. NakagawaMatthew C. ZirzowPhotobooks & photo products
G&A Label, Inc.12/4/19No Data19-32013El Paso, TX5thWestern TX
El Paso		H. Christopher MottCarlos A. MirandaLabel printing
Chapter 7 Filings:
Octagon Graphics, LLC12/11/19No Data19-11687Safety Harbor, FL11thMiddle FL
Tampa		Michael G. Williamson Kevin A. ComerWide format digital & screen printing
Chapter 15 Filings:
Lecta Paper UK, Ltd.12/19/1919-13990Barcelona, Spain2ndSouthern NY
New York City		Michael E. Wiles Robert H. TrustPressure sensitive papers


2019 December - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Ten PublishingDec-19No DataEl Segundo, CAN/ANone12/6/19Closing 19 automotive titlesLink
↧
↧

The Smartest Investor Ever Exits Newspapers – January 2020 M&A Activity

February 6, 2020, 7:17 pm
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Warren Buffet, arguably the greatest investor in the world, has decided to leave the club of billionaires that own and support publications that have been withering and would otherwise be facing certain death and closure. We see his exit as especially significant. While many newspapers lower page counts, publish three or four days instead of seven, reduce page size and cut run lengths, there has been a promising star on the horizon: Warren Buffet the “Oracle from Omaha.” Buffet acquired newspapers in mid-size cities and smaller towns across the country, and often expressed confidence while others predicted doom. That hopeful light has gone out with the sale of BH Media Group, the umbrella company for most of Berkshire Hathaway’s newspapers. The Buffalo News, which was owned independently of the group, was also included in the sale, making the exit virtually complete.

The buyer, Lee Enterprises of Davenport, Iowa, will add 31 daily newspapers to the 50 it already owns and nearly double its readership. Announcing the sale, Buffet stated that “We had zero interest in selling the group to anyone else for one simple reason: We believe that Lee is best positioned to manage through the industry’s challenges.” While the announcement of the sale surprised many in the newspaper industry, since Buffet is famously not a seller of companies once acquired, the choice of buyer was not surprising. The relationship between the two companies goes back at least to 2012 when Buffet’s Berkshire Hathaway rescued Lee Enterprises out of bankruptcy, buying $85 million of Lee’s debt that was held by Goldman Sachs. Berkshire was reported at that time to also have acquired an equity position in Lee approaching 4%. Lee Enterprises was choking on the debt hangover from its $1.46 billion purchase of the Pulitzer papers back in 2005 as well debt from other prior acquisitions that comprise the Lee collection of newspaper titles. In 2013, Berkshire Hathaway came to Lee’s rescue again, refinancing the remaining Pulitzer debt at a reduced fixed interest rate and extended maturity date, and with no up-front financing fees to boot.

As the relationship deepened between the two companies, in June 2018 BH Media handed over the daily management of most of its newspapers and digital media products to Lee, effectively exiting the operational aspects of the newspaper business. Clearly, a sale to any company other than Lee Enterprises would have been very difficult, given that Lee was already deeply entrenched in the day-to-day running of the newspapers.

The total revenue of the sold properties was $373.4 million last year, with a respectable adjusted EBITDA of $47.4 million (12.7%). Lee Enterprises paid $140 million cash which represents a multiple of 3.0x times EBITDA, which we hear is typical for newspapers in today’s market. Expressed relative to revenues, the price paid was 37% of 2019 revenues.

Buffet has been a man with a deep affinity for newspapers his entire life. He started his business career selling magazines door to door, and was a newspaper delivery boy in high school, back when such a thing existed. One tale about Buffet’s entrepreneurial spirt claims that he personally delivered over 500,000 papers before moving onto bigger and better business ventures, placing pinball machines in barber shops and then selling the enterprise for a tidy profit. Known for his folksy and modest style, Buffet has enthusiastically conducted and participated in a newspaper throwing contest each year at the company’s annual meeting. Not the typical sport of billionaires!

Nonetheless, ever the diligent investor, Buffet saw that the newspaper business was coming to an end, at least for those publishing in the secondary metro, regional and community markets. In April 2019, Buffet served up his prognosis for the newspaper industry in an interview with Yahoo Finance in which he announced that newspapers, with the possible exception of the big three, “are going to disappear.” Buffet added that the newspaper business “went from monopoly, to franchise, to competitive, to … toast.”

Despite the apparent exit from the newspaper business, Berkshire Hathaway remains deeply invested in the business that Lee acquired; the funds used to pay the $140 million purchase price were lent to Lee by Berkshire Hathaway! In addition, Berkshire ramped up the financing package to a total of $576 million at 9% annually with a 25-year maturity and no performance covenants, paying off all of Lee’s other lenders. The lifeline of extended fixed rate debt was rewarded with a 67% bump up in Lee’s stock price by the end of the day. Effectively, Berkshire Hathaway has traded its operational and equity position in for a senior secure debt position but still bears the risk that Lee can navigate the highly likely impending wind-down of the printed products and concurrent transition to digitally delivered local and regional content.

Tellingly, Berkshire Hathaway has retained title to all the real estate, granting Lee ten-year lease terms on the properties associated with the publishing assets. It’s worth noting that the real estate is often the gem that remains when many local newspapers eventually shut down the printing operations. As noted recently by industry pundit Frank Romano, remarking on the repurposing of former newspaper headquarters, “one condo in the iconic Chicago Tribune building was offered for $7.6 million.” Despite having sold the publishing business at what appears to be a loss, it may be that the real estate, retained by Buffet’s company, may in the end prove him once again to be the smartest investor after all.

Wide Format, Retail Display & Outdoor

TC Transcontinental, after engineering a dramatic and consistently executed strategic transformation from Canada’s biggest printer of publications into a flexible packaging manufacturing powerhouse, has now embarked on another strategic direction. Similar to the company’s move into flexible packaging, the new direction is clearly articulated. The company’s latest press release announced the recent acquisition of Artisan Complete Limited as “aligned with TC Transcontinental’s strategy to continue growing in the in-store marketing product printing vertical, where the Corporation is already a key player in Canada.” With its second acquisition of a wide format, in-store display printing company within a three-month period, Transcontinental is, as before, unswervingly executing its strategy. While not eschewing the possibility of further acquisition activity in the flexible packaging space, the company is clearly pursuing another new direction.

As other large publication-centric printing companies stumble strategically with loosely described efforts to offer every service imaginable or move upstream and compete with and/or acquire creative advertising agencies, TC Transcontinental continues to transform itself via acquisitions to develop new well-defined production-oriented segments of its business that are adjacent to its historical strengths, but with more promising future prospects than its traditional publication printing business (see The Target Report: April 2018, Getting Flexible in Your Middle Years).

In other transactional activity in the wide format and related services segment, Gemspring Capital acquired Skyline Displays which provides hardware, pop-up booths and much more for displays and exhibits for trade shows and events. Simultaneously, Gemspring bought TradeTec, the largest formerly independent dealer of Skyline products. The two companies will be combined under the Skyline brand.

Outdoor Image, located in Duluth, Georgia and a provider of out-of-home advertising and related services, has acquired Kramer Graphics in Dayton, Ohio. Kramer produces graphics for billboards, point-of-purchase displays, grand format building drapes, vehicle wraps and large-scale floor graphics. The company intends to retain all current staff and operate both locations.

Circle Graphics, one of many print-centric portfolio companies owned by mega private equity firm H.I.G. Capital (see The Target Report: November 2019, Diversified Graphic and Marketing Services) took quick advantage of H.I.G.’s bountiful financial backing and acquired Metromedia Technologies. Based in New York City, with additional facilities in Ohio and California, Metromedia produces super-sized graphics that adorn buildings in Times Square and other high-intensity areas requiring skilled installation, wrap double-decker buses, and decorate sports arenas. The roll-up in grand format has begun in earnest.

Commercial Printing and Diversified Services

Graphic Village, based in Cincinnati, Ohio, is back on our deal log again. The company has grown strategically through acquisition; its latest move the purchase of Intrinzic which it identified as a “branding consultancy.” The acquired company provides brand concept development, design services, social media marketing, SEO, and other digital marketing services. Graphic Village has grown into a $22 million diverse graphic services company via serial acquisitions, including a folding carton manufacturer and a commercial printing company, both acquired in 2018. (See more about Graphic Village and links to other sources in The Target Report: September 2018).

Hederman Brothers Printing, a commercial printing company in Madison, Mississippi that dates back to 1898, has acquired Service Printers, a local commercial printer that will be tucked-in. The company has also recently diversified from its traditional offset and digital printing offerings and added wide format services, banners and vehicle wraps.


2020 January - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
CCL Industries$4,069Toronto, ONIbertex Etiquetaje / Eti-Textil$7.7Elche, Spain1/31/20$19.6AcquisitionApparel labelsLink
Lee Enterprises$509.9Davenport, IABH Media Group
(Div. Berkshire Hathaway)		$373.4Omaha, NE1/29/20$140.0AcquisitionNewspaper publishingLink
Mitchell PressNo DataBurnaby, BCNorth West Book Operating Co.No DataBellingham, WA1/29/20No DataAcquisitionBindery servicesLink
cdsPrintNo DataCincinnati, OHKwik Kopy Business CenterNo DataTaylor Mill, KY1/28/20No DataAcquisitionPrinting & copyingLink
MaxcessNo DataOklahoma City, OKRotoMetrics
(Port. Co. Sentinel Capital)		No DataEureka, MO1/28/20No DataMergerConverting diesLink
Graphic Packaging$6,160Atlanta, GAFolding carton plant
(Div Quad/Graphics)		No DataOmaha, NE1/28/20$40.0Asset Acquisition
(Mesirow)		Folding cartonsLink
Monotype Imaging HoldingsNo DataWoburn, MAFontsmithNo DataLondon, UK1/27/20No DataAcquisitionFonts and design servicesLink
Graphic Village$22.0Cincinnati, OHIntrinzicNo DataCincinnati1/27/20No DataAcquisitionMarketing agencyLink
OSG Billing Services
(Port co. Aquiline Capital)		No DataRidgefield Park, NJGabriel GroupNo DataEarth City, MO1/24/20No DataAcquisition
(Corp Dev Assoc)		Transactional printingLink
Hederman Brothers Printing$13.9Madison, MSService PrintersNo DataFlowood, MS1/21/20No DataAcquisitionCommercial printingLink
Inx International
(Div. Sakata Inx Corp.)		No DataSchaumburg, ILRUCO DruckfarbenNo DataEppstein, Germany1/20/20No DataAcquisitionInk manufacturerLink
Gould Paper$5,000New York, NYMcGrann PaperNo DataCharlotte, NC1/16/20No DataAcquisitionPaper distributorLink
Gemspring CapitalNo DataWestport, CTSkyline DisplaysNo DataEagan, MN1/15/20No DataAcquisitionTrade show displaysLink
EO Johnson Business TechnologiesNo DataWausau, WIStandard DynamicsNo DataBurnsville, MN1/14/20No DataAcquisitionPrint equipment distributorLink
Transcontinental$3,040Montreal, QCArtisan CompleteNo DataMarkham, ON1/13/20No DataAcquisitionWide format, in-store displayLink
Outdoor ImageNo DataDuluth, GAKramer GraphicsNo DataDayton, OH1/8/20No DataAcquisitionWide format printingLink
Michael KishaNo DataSarasota, FLSun Graphic TechnologiesNo DataSarasota, FL1/8/20No DataAcquisition
(New Direction)		Wide format printingLink
Industrial Opportunity PartnersNo DataEvanston, ILMidwest Paper GroupNo DataCombined Locks, WI1/8/20No DataAcquisitionRecycled paper millLink
Continental Plastic CardNo DataPompano, FLBiz-MagNo DataWeston, FL1/6/20No DataMergerPlastic card, magnet printingLink
Media CentralNo DataVaughan, ONGeorgia Straight
(Prop. Vancouver Free Press)		No DataVancouver, BC1/6/20$1.3AcquisitionCommunity newspaperLink
Dobbs Management Service
w/ Clavis Capital Partners		No DataMemphis, TNDCG OneNo DataSeattle, WA1/2/20No DataAcquisitionDiverse marketing servicesLink
Circle Graphics
(Port Co. H.I.G. Capital)		No DataLongmont, COMetromedia TechnologiesNo DataNew York, NY1/2/20No DataAcquisitionGrand & wide format printingLink
CFSNo DataNorton, MANew England Professional SystemsNo DataHolliston, MA1/2/20No DataAcquisitionDirect Mail & fulfillmentLink


2020 January - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
Schurman Fine Papers1/23/20No Data20-10135Goodlettsville, TN3rdDelaware
Wilmington		John T. DorseyNicolas Jenner Fine stationery, greeting cards
Chapter 7 Filings:
X-Press Envelope & Printing, Inc.1/2/20No Data20-30003Pottsboro, TX5thNorthern Texas
Dallas		Harlin DeWayne HaleJoyce W. Lindauer Envelope printing


2020 January - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Whitehall Printing Company2/13/20No DataNaples, FLN/ANoneJan-20Commercial printingLink
LSC Communications - Printing facilityJul-20No DataStrasburg, VALSC CommunicationsChicago, IL1/14/20Magazine and catalog printingLink
LSC Communications - Printing facilityJul-20No DataGlasgow, KYLSC CommunicationsChicago, IL1/14/20Magazine and catalog printingLink
LSC Communications - Printing facilityJul-20No DataMattoon, ILLSC CommunicationsChicago, IL1/14/20Magazine and catalog printingLink
↧

Catching the Wave in Corrugated Cartons – February 2020 M&A Activity

March 7, 2020, 8:30 pm
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The Welch Packaging Group stepped up and acquired PAX Corrugated Products from Georgia-Pacific. The acquired company’s product line, corrugated cartons, is consistent with every company that Welch has acquired in the 35 years since the owner established the company with only four employees and rudimentary box making equipment. With this latest acquisition, Welch Packaging now serves the Midwest market from 16 locations and three distribution centers with over 1,300 employees.

The steady drum beat of acquisitions executed by Welch may very well represent one of the clearest and most highly focused growth-by-acquisition strategies in the printing and related industries: corrugated products, custom production, all within 550 miles of the home base in Elkhart, Indiana. Not once has the owner veered off the path of building a super-regional powerhouse connected by one common thread, corrugated products.

While this acquisition was not in any way a strategic departure for Welch, it does represent a change in tactic as this seller was not a family or entrepreneur, rather the seller was a large privately owned company. Georgia-Pacific, owned by Koch Industries, acquired the PAX Corrugated Products company not so long ago, in August 2017. However, at the time, PAX was family owned, and presumably has retained the feel of a cohesive “family-like” unit within the short hold time by Georgia-Pacific. In any event, the deal is still on point strategically for Welch Packaging Group.

In addition to representing excellence in executing a growth-by-acquisition strategy, the Welch Packaging Group is another example of the emerging trend we noted a few months ago; financially healthy and operationally efficient regional companies leapfrog to an adjacent metro market and build out an additional geographic market position via a series of strategically sound acquisitions. (See The Target Report: Commercial Printing: Consolidation or Regional Expansion?)



Activity Picks Up in Wide Format Segment

We have noted in our last two annual recaps that the landscape is changing in the wide format segment (see The Target Report Annual Recap: August 2019 and The Target Report: It’s Back to School Time, August 2018). Taken together, a multitude of transactions, including a notable number of bankruptcy filings, non-bankruptcy plant closures, and a steady number of acquisitions, indicated that the market for wide format printing services was getting more competitive. Digital wide format printing equipment is now ubiquitous, including installations at many commercial printing establishments that flocked to the higher margins promised by wide format services. Change is afoot in wide format.

As pricing pressure increases at the lower end of the product offerings (e.g. small signs, banners, etc.), the larger and more sophisticated wide format providers are increasingly focused on providing value-added services such as image enhancement, image repurposing, onsite installation and managing the logistics required for large campaign launches.

GSP, a multi-location wide format service provider headquartered in Clearwater, Florida, acquired Custom Color, based in Lenexa, Kansas. The merged companies provide retail marketing graphics and in-store displays. GSP announced plans to continue operating at the acquired facility in Kansas, adding to its other locations in Utah and Wisconsin. Much more than simply a wide format printing company, GSP is positioned to provide a full range of services dedicated to retail environments, from photography to managing complete in-store installation.

Power Marketing + Printing, an Alpharetta, Georgia-based diversified graphics company, acquired Atlanta-based Market Place Color. The acquired company brings extensive wide format production capabilities to the combined entity, including production of backlit transparent displays. The transaction strategically expands the buyer’s breadth of services via an acquisition, versus the other option of developing the new services internally. In one fell swoop, Power Marketing + Printing acquires decades of experience in analog and digital wide format printing services.

Direct Edge Media, headquartered in Anaheim, California, announced the purchase of Sign Language XL, located in Denver, Colorado. The acquired company specializes in the production of event venue signage, out-of-home billboards and point-of-purchase signage. Unlike the Power Marketing + Printing transaction, this deal represents the more common rationale behind most acquisitions in the printing industry; consolidating competing operations into a unified more efficient whole. Direct Edge Media will be moving its existing Denver team into the Sign Language XL location. The previous owner of Sign Language XL was AEG, a sports and live entertainment company that owns, manages or consults with arenas, stadiums, convention centers and performing arts centers to produce music, sports and other events. Previously providing in-house graphic support to AEG, the spun-off company will continue to provide services to AEG, now a customer.

Thomas Printworks, a multi-location reprographic, printing and wide format company based in Houston, has picked up Austin-based Dynamic Reprographics. Both companies started as providers of blueprints and plan documents to the AEC market (architects, engineers and construction companies). The blueprinting business evolved from traditional (and noxious) ammonia-based analog blueprints into digital technologies that produce wide format black and white plan documents, accompanied by toner-based bid and specification books. As digital technologies took hold and color was introduced into products serving the AEC market, it was a small leap for reprographic shops (as blueprint shops became known) to jump into the commercial printing business while maintaining their core focus on the AEC market. (Another example of the much-discussed “convergence” occurring in the printing industry.) Mirroring the nature of the AEC professions, reprographic shops have been essentially a local business. Consistent with this, roll-ups in the reprographic business are characterized by many locations, each serving a local clientele. Thomas Printworks, now boasting in excess of $66 million of revenue, maintains this locality-based characteristic, with 28 locations across four states.

Spicers Canada, a division of Central National Gottesman, announced the acquisition of All Graphic Supplies, a distributor of wide format supplies headquartered in Mississauga, Ontario. All Graphic Supplies brings seven locations across Canada and the Caribbean to the Spicers distribution network. In another trend we see in the printing industry, paper distributors, faced with declining demand for their core products, are acquiring distributors that supply multiple printing segments in addition to their traditional printing company customers, including sign graphics, textiles, digital label and industrial printing companies.


2020 February - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
Graphic Packaging$6,160Atlanta, GAConsumer Packaging Group
(Div. Greif)		$200.0Delaware, OH2/27/20$85.0AcquisitionFolding cartonsLink
PlatecraftersNo DataColmar, PAFlexographic Plate Division
(Sub. Sun Chemical)		$7,500Parsippany, NJ2/26/20No DataAcquisitionFlexographic platesLink
Welch Packaging GroupNo DataElkhart, INPAX Corrugated Products
(Div. Georgia-Pacific)		No DataLebanon, OH2/22/20No DataAcquisitionCorrugated boxesLink
 Rajiv YajnikNo DataSouthampton, PAMinuteman Press FranchiseNo DataSouthampton, PA2/21/20No DataAcquisitionPrinting & copyingLink
Joseph Merritt & CompanyNo DataHartford, CTNortheast Printing NetworkNo DataCromwell, CT2/20/20No DataAcquisitionCommercial printingLink
Church OffsetNo DataAlbert Lea, MNMarketing PlusNo DataAlbert Lea, MN2/19/20No DataAcquisitionDirect mail & marketingLink
Supremex$191.7LaSalle, QCRoyal Envelope$30.0Concord, ON2/18/20$27.4AcquisitionEnvelope manufacturingLink
Lindenmeyr Munroe
(Div. Central National Gottesman)		$6,800Purchase, NYWilcox PaperNo DataChamplin, MN2/18/20No DataAcquisitionPrinting papers distributionLink
CCL Industries$4,069Toronto, ONClinical Systems$14.4Garden City, NY2/18/20$19.4AcquisitionClinical trial labels & systemLink
Atlantic CorporationNo DataWilmington, NCCoastal CorrugatedNo DataNorth Charleston,
SC		2/17/20No DataAcquisitionCorrugated boxesLink
Domtar$5,220Fort Mill, SCAppvion POS Paper Business
(Div. Appvion)		No DataAppleton, Wi2/14/20No DataAcquisitionSpecialty papersLink
Jake WoodNo DataPhoenix, AZMuscle & Fitness (+other titles)
(Prop American Media)		No DataNew York, NY2/14/20No DataAcquisitionMagazine publisherLink
GSPNo DataClearwater, FL Custom ColorNo DataLenexa, KS2/12/20No DataAcquisition
(New Direction)		Wide format, in-store displayLink
OneTouchPoint
(Port Co. ICV Partners)		$138.7Hartland, WIBluewaterNo DataBloomington, MN2/11/20No DataAcquisitionDigital marketing servicesLink
PCI Pharma ServicesNo DataPhiladelphia, PABellwyck Pharma ServicesNo DataToronto, ON2/11/20No DataAcquisitionPharma packaging Link
Quad/Graphics$3,920Sussex, WIApple Tree GroupNo DataMexico City,
Mexico		2/10/20No DataAcquisitionRetail creative servicesLink
Pixelle Specialty Solutions
(Port co. Lindsay Goldberg)		No DataSpring Grove, PASpecialty Papers Business
(Div. Verso Paper)		$2,440Memphis, TN2/10/20No DataAcquisitionSpecialty paper millsLink
Koehler Paper Group$873.5Oberkirch, GermanyBeaver Paper & Graphic MediaNo DataLawrenceville, GA2/10/20No DataAcquisitionSpecialty papersLink
Cox Enterprises$21,000Atlanta, GAOhio Newspapers (3 titles)
(Prop. Cox Media Group)		No DataAtlanta, GA2/10/20No DataAcquisitionDaily NewspapersLink
Komori$897.0Tokyo, JapanMBO Group$57.0Oppenweiler,
Germany		2/7/20No DataAcquisitionBindery equipmentLink
Mele Printing$19.5Covington, LAPrinting Tech$2.1Baton Rouge, LA2/6/20No DataAcquisitionCommercial printingLink
Power Marketing + PrintingNo DataAlpharetta, GAMarket Place ColorNo DataAtlanta, GA2/5/20No DataAcquisitionWide format & retail displayLink
Resource Label Group
(Port co. First Atlantic Capital)		No DataMemphis, TNAxiom Label & PackagingNo DataCompton, CA2/5/20No DataAcquisitionLabels & flexible packagingLink
Direct Edge MediaNo DataAnaheim, CASign Language XLNo DataDenver, CO2/4/20No DataAcquisitionWide format & retail displayLink
Thomas Printworks$66.5Houston, TXDynamic ReprographicsNo DataAustin, TX2/3/20No DataAcquisitionReprographics & wide formatLink
Spicers Canada
(Div. Central National Gottesman)		$6,800Purchase, NYAll Graphic suppliesNo DataMississauga, ON2/3/20No DataAcquisitionWide format suppliesLink
Nosco
(Sub. Holden Industries)		No DataWaukegan, ILHaapanen BrothersNo DataGurnee, IL2/3/20No DataAcquisitionCommercial printingLink


2020 February - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
The McClatchy Company
(and 52 affiliates)		2/13/20$739.420-10418Sacramento, CA2ndSouthern NY
New York		Michael E. WilesShana ElbergNewspaper Publisher
API Americas Inc.
(Sub. API Group Limited, UK)		2/2/20No Data20-10239Lawrence, KS3rdDelaware
Wilmington		Christopher S. SontchiEdward P. Christian Metallic foil & substrates
Chapter 7 Filings:
Colorxpress, Inc.2/25/20No Data20-80560Huntsville, AL11thNorthern AL
Decatur		Clifton R. Jessup Jr.G. John Dezenberg, Jr.Commercial printing
Gilead Publishing, LLC2/25/20No Data20-05110Wheaton, IL7thNorthern IL
Chicago		Janet S. BaerArthur W. Rummler Religious book publishing
East Coast Envelope & Graphics, LLC2/20/20No Data20-41023Maspeth, NY2ndEastern NY
Brooklyn		Elizabeth S. StongJulie Cvek CurleyEnvelope manufacturing
Southeast Print Programs, Inc. 2/7/20No Data20-01076Tampa, FL11thMiddle FL
Tampa		Roberta A. ColtonStanley J GalewskiFranchise marketing


2020 February - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Springfield News-Leader - Printing facilityMar-20No DataSpringfield, MOGannettMcLean, VA2/19/20Consolidating print productionLink
Triangle Printing & Packaging4/30/20No DataYork, PANoneN/AFeb-20Folding cartonsLink
Mail Handling Group3/25/20No DataEden Prairie, MNNoneN/AFeb-20Direct mail printingLink
Dexter SolutionsMar-20No DataMemphis, TNNoneN/AFeb-20Commercial printingLink
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The Lull Before the Tempest – March 2020 M&A Activity

April 5, 2020, 7:10 pm
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Let me say it right up front – it’s difficult to write a relevant fact-based commentary about M&A transactions in the printing and related industries when the world has literally stopped in its tracks to deal with the life and death issues caused by the spread of the coronavirus. We are all just starting to understand the impact on the overall economy and implications for specific sectors. Within the context of understanding that you may have more important things on your mind right now, I’ll stick to my knitting and try to make some sense of where M&A activity is headed in our industry. As readers of The Target Report know, our monthly commentary is a gestalt of the prior month’s transactional activity, an analysis of trends based on that activity, and modest suggestions of what we believe those trends tell us about the future of the printing and related businesses. However, given the seismic nature of the current crisis, the rear view mirror is less useful, so we’ll depart from our usual style this month, look backwards just a bit, and offer our view through the front windshield.

Transactional activity came to a screeching halt in the middle of March. With only two exceptions (the approval of Case Paper’s asset purchase in a 363 sale in a bankruptcy proceeding, and a sale of International Paper’s containerboard mills and converting facilities in Brazil) no new transactions were announced after March 13th in the segments we are concerned with. Not coincidentally, the day before the “music stopped,” the stock market had its biggest fall since 1987, followed by another record decline the next Monday. The storm clouds were clearly gathering before that, but due to the momentum and time frames that occur in most M&A transactions, activity during the beginning of March was reasonably normal; the deals that did close were already well on the way to completion as the virus began its spread out of China and across the globe. That momentum has now all but ceased and we have entered a very quiet period for transactional activity. The quiet will not last.

Regardless of how the medical and economic impact of the coronavirus plays out, there is a disruptive storm on the horizon. Transactional activity will likely not return to pre-Covid-19 levels for quite a while. Based on our research and what we see over the past month here at Graphic Arts Advisors (GAA), it's our view that the Covid-19 pandemic has created a sudden and dramatic shift in the landscape for M&A transactions in our industry. Several transactions that we were working on between financially healthy buyers and sellers that were scheduled for closing in March and April have been put on indefinite hold, at least until the owners see a path back to some level of normalcy. At the same time, clients that were financially challenged before the virus hit have accelerated the sale process and/or have begun seeking alternatives to stem the losses that are sure to come. These trends, pausing healthy transactions and speeding up resolution of difficult situations, will continue, at least in the near future, and possibly longer.

Bankruptcy filings have not yet shown a significant uptick. We found four Chapter 7 filings in the industry in March, which is only slightly more than the average over the past several months. Three of the companies that filed for liquidation were publishers: a newspaper in Shreveport, Louisiana, a specialty magazine publisher in Pittsburgh, and a book publishing company in San Antonio, Texas. (The fourth was an online platform aimed at commercial printing companies, seeking to provide a source for apparel and promotional printing.) These bankruptcy filings were probably all in the works before the coronavirus was a full-blown crisis. The slight increase in Chapter 7 filings is likely only a precursor to a more significant uptick in companies seeking a court-supervised liquidation process.

Interestingly, there were no new Chapter 11 filings of companies in the industry seeking to restructure and/or sell assets under the supervision of the Bankruptcy Court. This will change. As reported in Bloomberg, LSC Communications has been preparing for a Chapter 11 bankruptcy filing. The company’s stock has fallen to less than one tenth of one percent of its high since being spun out of R.R. Donnelley in 2016, and the company’s debt is trading in distressed debt markets at a deep discount to face value. When LSC files, there very well could be a ripple effect to its suppliers, many of which will be too small to go through the difficult and expensive Chapter 11 reorganization process.

There was only one non-bankruptcy plant closure in March. CJK Group, the national consolidator of printing companies, many of which were financially challenged when acquired by CJK, announced the shut-down of Sinclair Printing, its Los Angeles commercial and book printing facility. In the announcement about the closing, CJK specifically named the Covid-19 pandemic as a major factor in its decision to consolidate the Los Angeles production into its other facilities, deferring the decision as to whether the shutdown is permanent.

Other non-bankruptcy plant closures are already in the planning stages. While not being specific yet with how many plants are ceasing operations, Quad/Graphics has indicated that employees are being furloughed and operations will be shutdown at several manufacturing sites. In addition, Quad has cut executive salaries, delayed capital projects, suspended the dividend and drawn down under its credit facility to increase cash on hand. Quad has stated that the closures are temporary. Companies without the resources of a Quad may have to make more permanent decisions to close down operations via non-bankruptcy wind-downs and liquidations.

What we Expect at GAA 

Transactions “between equals” will go quiet until some level of normalcy returns to the market. Some transactions will be put on hold, while others will be broken off completely. Owners of successful companies who were ready to exit will not want to sell into a downward trending market. Successful companies that were active acquirers will not want to pay prices based on out-of-date market multiples. The market stasis is over. The even playing field between buyers and sellers that has existed for the past several years will tilt in favor of buyers. Companies with strong balance sheets or well-funded financial backers will be in especially strong positions to negotiate favorable pricing and terms.

Valuation multiples will trend downward, especially in the weaker segments such as commercial printing and publishing (those that rely primarily on printed vehicles to deliver their content). As noted in previous Target Reports, the market had already softened a bit for wide format printers that cater to the retail market. The mass closures in retail will certainly impact those companies focused on retail onsite signage, point-of-purchase, as well those catering to events with signage and banners.

It’s too soon to tell if the public will develop a long-lasting aversion to touching mail and what will be the impact on direct mail companies. However, in the meantime the USPS expects a rapid drop in mail volumes (while also reporting that deliveries of packages from online purchases has increased). Articles are already starting to appear in the trade press about a dramatic decline in advertising revenues, especially impacting local papers and magazines, and further accelerating the transition to digital channels and online shopping. It remains to be seen if these changes will be permanent.

Manufacturers of folding cartons, label printers and flexible packaging companies will likely see less decline in valuations, but the heady days of the past several years with some companies reaching double-digit valuation multiples may be a thing of the past as everybody recalibrates. Unlike some segments that may not recover fully, packaging will rebound and track the overall economy. As noted last month, activity in the corrugated box segment has remained strong and we expect that to continue due to increased online shopping (see The Target Report: Catching the Wave in Corrugated Cartons, February 2020.

Buyers with solid balance sheets will get excited about the return to a strong buyer’s market and will seek out tuck-in opportunities. At GAA, we are already receiving calls and emails from owners of companies who perceive that conditions have changed to a more favorable market for acquisition and consolidation. Buyers eager to take advantage of the situation are making their position known.

Owners of distressed companies will imagine that getting together with another distressed company will solve their problems. In a last-ditch effort to maintain an equity interest in their enterprise, some owners will try to “tie two stones together in an attempt to float.” Owners of companies that were already “treading water,” but not necessarily fully distressed, will put off any decisions until they exhaust the monies from recently passed Federal aid. Many will then begin to fail anyway and need to do something.

Secured lenders will be patient while the Federal monies pour out, but will slowly begin to push their most troubled debtors into workout. Portfolio managers at traditional banks and other cash flow lenders may be encouraged by their senior executives, credit managers and corporate strategists to push printing companies out of their portfolios (it won’t be the first time). Trade creditors will not want to kill their customers with excessive credit restraint but will likely watch their credit exposures closely and selectively exert pressure on their weakest customers.

While we are confident that the storm ahead will pass, it remains to be seen if we are in for a full hurricane season, or simply a passing summer storm with another clear patch on the other side. In any event, the windshield is already a bit blurry, so be prepared to turn the wipers up to full speed.

2020 March - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1
(Surviving Entity)		Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2		Pre-Deal
Revenues
($Mil )

Party #2 Address		Date
Deal
Public		Deal
Value
($Mil)
Deal Structure
(Intermediary)

Notes
Press
Release
Klabin$2,500Sao Paulo, BrazilCorrugated packaging business
(Div. International Paper)		No DataMemphis, TN3/29/20$64.7AcquisitionContainerboard & box plantsLink
Case PaperNo DataHarrison, NJAPI Americas Inc.
(Sub. API Group Limited, UK)		No DataLawrence, KS3/25/20$6.0363 Sale in Ch. 11Metallic foil & substratesLink
Santa Maria News MediaNo DataSanta Maria, CAThe Hanford Sentinel (+3 titles)
(Prop. Lee Enterprises)		No DataHanford, CA3/13/20No DataAcquisitionCommunity newspapersLink
Monomoy Capital PartnersNo DataNew York, NYMac PapersNo DataJacksonville, FL3/13/20No DataAcquisition
(Mesirow)		Paper distributionLink
E.F. Marketing GroupNo DataSan Antonio, TXAccu-PrintNo DataSan Antonio, TX3/10/20No DataAcquisitionCommercial printingLink
ProMach
(Port co Leonard Green & Partners)		$827.0Covington, KYPharmaworksNo DataOdessa, FL3/9/20No DataAcquisitionBlister packaging machineryLink
Times Media GroupNo DataTempe, AZThe Foothills FocusNo DataNew River, AZ3/8/20No DataAcquisitionCommunity newspaperLink
Lux Global Label
(Port co. Resilience Capital)		No DataLafayette Hill, PALabelworxNo DataLevittown, PA3/5/20No DataAcquisitionLabels & flexible packagingLink
Moore$700.0Tulsa, OKColortree (Mfg. facility)No DataHenrico, VA3/5/20No DataAsset AcquisitionDirect mail & envelopesLink
DG3 Group
(Port co. Resilience Capital)		$143.0Jersey City, NJRyan Edwards CommunicationsNo DataSouthampton, UK3/4/20No DataAcquisitionManaged print servicesLink
SignetNo DataAkron, OHRoswell BookbindingNo DataPhoenix, AZ3/4/20No DataAcquisitionBindery servicesLink
Thysse$11.1Oregon, WISign EdgeNo DataMiddleton, WI3/3/20No DataAcquisitionWide format printingLink
Western Shield LabelNo DataRancho Dominguez, CALabel Print TechnologiesNo DataMogadore, OH3/2/20No DataAcquisitionLabel printingLink


2020 March - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenues
($Mil )


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
No Chapter 11 Filings Found this Month---------------------------
Chapter 7 Filings:
Lammert, Inc.
(DBA HPN Books)		3/13/20No Data20-50585San Antonio, TX5thWestern TX
San Antonio		Craig A. GargottaRonald J. Smeberg Book publishing
Inklocker, Inc.3/12/20No Data20-10885Costa Mesa, CA9thCentral CA
Santa Ana		Erithe A. SmithDouglas A. PlazakOnline promo printing platform
Rotating Mass Media, Ltd.3/5/20No Data20-20846Pittsburgh, PA3rdWestern PA
Pittsburgh		Gregory L. TaddonioFrancis E. CorbettSpecialty magazine publishing
Jonesboro Newspaper, Inc.3/2/20No Data20-30281Jonesboro, LA5thWestern LA
Shreveport		John S. HodgeJames W. Spivey, IINewspaper publishing


2020 March - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility
Date of Closure		Pre-Closure
Revenues
($Mil )


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Sinclair PrintingMar-20No DataLos Angeles, CACJK GroupBrainerd, MNMar-20Commercial & book printingLink
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