Alphabet Soup of Trade Association Mergers – April 2020 M&A Activity

May 7, 2020, 6:34 pm

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The long and winding road of industry consolidation among the associations serving the printing and related industries may have finally reached its ultimate conclusion with the recently announced merger of the Specialty Graphic Imaging Association (SGIA) and Printing Industries of America (PIA). The merger was widely expected, makes sense, and is reflective of the ongoing consolidation in the highly fragmented and diverse universe of companies that make up the industry. As technology has driven convergence in the service offerings at many printing companies, that convergence in turn has created a commonality among companies that apply images to a substrate. Paper printed on an offset press, dry toner applied via laser imaging to pre-printed masters, liquid toners creating one-of-a-kind labels in rapid sequence, latex inks printed onto rolls of fabric for trade show exhibits, flatbed UV inkjet wide format printers creating retail environments, ... I could go on, but you get the idea, printing companies are offering all types of unique applications utilizing a wide variety of print technologies. Many print-centric companies no longer are limited to one strict silo of technological expertise serving a highly defined and segmented customer base. As the industry converges and consolidates, so have the many trade associations, probably best exemplified by the merger of SGIA and PIA.



The trade associations have evolved, right along with the industry segments they serve. The SGIA moniker was adopted in 1995 when the Screen Printing Association (SPA), originally established in 1948, first recognized its members’ growing use of digital technologies and changed the association name to the Screen Printing & Graphic Imaging Association International (SGIA). When SGIA consolidated the Digital Printing & Imaging Association (DPIA) and the Screen Printing Technical Foundation (SPTF) into the organization, they managed to find a name that retained the acronym, rebranding to the Specialty Graphic Imaging Association (SGIA). However, “SGIA” is apparently now on the way out since the new name for the merged SGIA/PIA organization, just announced, will be the Printing United Alliance (PUA anyone?).

The other half of the merged entity, Printing Industries of America (PIA), is also a roll-up of organizations. In 1999, PIA absorbed the research-based Graphic Arts Technical Foundation* (GATF) which traced its roots back to 1924. Unlike the SGIA, the PIA is a chapter-based organization with semi-independent regional chapters throughout the US. The alphabet soup within the PIA is extensive; there’s the PMA (Print Media Association of Missouri), the PICA (Printing Industry of the Carolinas), the PIAS (Printing Industries of the South), the WSPA (Western States Printing Alliance), the PPI (Pacific Printing Industries Association, which includes Alaska, Hawaii, Idaho, Montana, Oregon, Utah and Washington), the aptly named PINE (Printing Industries of New England), the MPIA (Manitoba Print Industry Association), the FGA (Florida Graphics Alliance), GAA (Graphic Arts Association in Delaware, Southern New Jersey and Pennsylvania; not to be confused with the GAA that publishes this report), the GLGA (Great Lakes Graphics Association), PIM (Printing Industry Midwest), PIA MidAmerica (Printing & Imaging Association of MidAmerica) and several others including my local chapter, based in New York State, the PIA (Printing Industries Alliance – yes, there is even a PIA chapter of the PIA).

And whatever happened to the venerable NAPL? Founded in 1933 by an accountant, among others, the National Association of Photo Lithographers (NAPL) brought financial discipline and standards to the new and growing industry based on offset lithography which was displacing letterpress printing as the primary method of print reproduction. By 1971, the name had become anachronistic, the “photo” prefix being superfluous. NAPL responded by a simple name change to the more inclusive National Association of Printers and Lithographers (NAPL). As digital technologies took hold of the industry, NAPL expanded beyond its traditional financial focus. The association had evolved to address a broader range of management concerns and the name was changed in 1999 to the National Association for Printing Leadership (NAPL). In 2006, NAPL absorbed the National Association of Quick Printers (NAQP), retiring the NAQP moniker for the time being.

When merger talks between PIA and NAPL fell through in 2012, the pressure to consolidate trade associations did not go away, it simply shifted to another target. In 2013 NAPL merged with the Association of Marketing Service Providers (AMSP) which was the rebranded name for the former Mailing & Fulfillment Service Association (MFSA). In the ultimate alphabet soup incarnation, the group resurrected the NAQP brand and operated for more than a year with the improbable name AMSP/NAPL/NAQP. Given the difficulty of maintaining a coherent brand identity with a 12-digit acronym, AMSP/NAPL/NAQP engaged a branding agency to conjure up a new name. The result was that in 2015 the NAPL brand disappeared into the new name for the merged entity, Epicomm. A bit more than a year later, the Epicomm name itself disappeared with its merger into Idealliance. Focused on establishing color standards and related training, Idealliance has eschewed the vestiges of trade association functions. In the meantime, the former NAQP members, primarily owners of smaller printing companies, never quite felt well-served by the merged associations, and a spin-off group had emerged to form the National Print Owners Association (NPOA). The eventual melting away of the NAPL legacy has paved a clear path for SGIA and PIA to merge and take on the mantle of being the lead trade association for the industry.

Commercial Printing and Diversified Services

As noted in last month’s Target Report, deal activity declined dramatically as the country shut down due to the outbreak of Covid-19, and we expect that it will take several months for buyers and sellers to return to the market in numbers consistent with the past (see The Target Report: The Lull Before the Storm, March 2020). However, we do expect that activity will pick up soon in the commercial printing segment, and that the first wave of transactions will be “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.

Kingston Printing, a commercial printing company in the Kansas City region with $6 million of revenues in 2019, has acquired the business of Richardson Communications Group, a slightly smaller diversified commercial printing and fulfillment services company serving regional and national clients.** Operations are being consolidated into the Kingston facility in a classic well-structured tuck-in transaction. Richardson brings national clients, selected equipment, highly qualified personnel, client-branded websites, and a sophisticated fulfillment operation to the newly combined operation.

LCP (formerly known as Lake County Press), a diversified commercial printing operation in Waukegan, Illinois with more than $38 million in revenue in 2019, has acquired the customer assets of eDOC Communications, a commercial printing company located in Mount Prospect, Illinois. Management at LCP noted that the transaction did not include taking over any operations at the eDOC facility and that LCP was not acquiring any of eDOC’s equipment. The owners of eDOC Communications pointed to the Covid-19 crisis as the critical factor driving their decision to tuck-in their customer base with LCP at this time.
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Cafe Bohemia Menu, Circa 1964

* In addition to providing research and training, GATF sponsored annual industry-backed scholarships. As the recipient of a GATF scholarship, based on my academics and an inexplicable interest in spending time in the high school print shop (yes, there were real printing shops in many high schools at the time; ours included two “AB Dicks,” two “Pilot Presses,” a dark room for developing orthochromatic film, and the most interesting of all, a “Heidelberg Windmill” letterpress). In my senior year of High School, GATF treated me to an all-expense paid trip to the Print 74 trade show at McCormick Place in Chicago. Upon entering the main hall, there was a four-color Heidelberg press running full speed with all the hiss and rumble of a big press, folders clacking away, stitchers swishing along, producing beautiful full-color booklets right there on the show floor. I still remember the theme of the booklets which described the benefits of America switching to the metric system (which was a big topic at the time). GATF and that trip to Print 74 changed my life; that was it for me, this printing industry thing was exciting and big business. GATF had accomplished their goal and had another convert to the industry.

The funding for the scholarship was provided by Bell & Howell, which at the time owned the Baumfolder company, hence the connection to our industry. If I and the other three young scholarship recipients had any doubt that printing was a good industry for our serious consideration, the B&H executives made sure that top-notch treatment was part of the agenda. The most memorable part of the trip (other than the big presses) was Cafe Bohemia, billed as having “Chicago’s Most Unusual Menu” with a selection of truly unusual North American game such as grizzly bear, elk, antelope, and beaver, and also exotic selections from around the globe. The waiter informed our table that one of the specials that evening was Braised Strips of African Lion (served in a Grand Marnier Sauce). He added that, notably, this night was the last day that lion could be legally served in the US, and lion would no longer be available henceforth. Of course, I ordered the lion.

** Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to Richardson Communications Group in this transaction.

2020 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

Specialty Graphic Imaging Association (SGIA)

No Data

Fairfax, VA

Printing Industries of America (PIA)

No Data

Warrendale, PA

4/30/20

No Data

Merger

Trade association

Link

Kingston Printing

$6.0

Eudora, KS

Richardson Communications Group

$5.2

Kansas City, MO

4/29/20

No Data

Asset Acquisition (Graphic Arts Advisors)

Commercial printing

Link

New-Indy Containerboard

No Data

Ontario, CA

Shoreline Container

No Data

Holland, MI

4/21/20

No Data

Acquisition (Ernst & Young Capital)

Corrugated boxes

Link

Bobst Group

$1,686

Mex, Switzerland

Cito-System

No Data

Schwaig, Germany

4/9/20

No Data

Purchase of Majority Interest

Die cutting supplies

Link

LCP

$38.1

Waukegan, IL

eDOC Communications

No Data

Mount Prospect, IL

4/6/20

No Data

Asset acquisition

Commercial printing

Link

2020 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:

LSC Communications, Inc.

4/13/20

$3,330

20-10950

Chicago, IL

2nd

Southern NY New York

Sean H. Lane

Andrew G. Dietderich

Book & publication printing

Chapter 7 Filings:

Global Web Finishing Holding Co. LLC (Div. Graphic Systems Services)

4/9/20

No Data

20-20807

Merrillville, IN

7th

Northern IN Hammond

James R. Ahler

Pro Se

Web finishing systems

		2020 April - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues ($Mil )	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		Domtar - Paper mill	5/5/20	No Data	Hawesville, KT	Domtar Corporation	Fort Mill, SC	4/27/20	Temporary cessation, paper mill	Link
		LSC Communications - Printing facility	4/20/20	No Data	Baraboo, WI	LSC Communications	Chicago, IL	4/17/20	Temporary cessation, catalog printing	Link
		Domtar - Paper mill	4/6/20	No Data	Kingsport, TN	Domtar Corporation	Fort Mill, SC	4/6/20	Temporary cessation, paper mill	Link
		Quad/Graphics - Printing facilities	Apr-20	No Data	Several Undisclosed	Quad Graphics	Sussex, WI	4/2/20	Temporary cessation, publication printing	Link
		Four Star Color	Apr-20	No Data	Newton, NJ	None	N/A	Apr-20	Folding carton printing	Link
		Ambrose Printing	7/17/20	No Data	Nashville, TN	None	N/A	Apr-20	Commercial printing	Link
		Ecoprint / BST Printing	6/11/20	No Data	Silver Spring, MD	None	N/A	Apr-20	Commercial printing	Link

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Regional Print Consolidator Builds Diverse Offerings – May 2020 M&A Activity

June 7, 2020, 8:39 pm

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Graphic Village, based in Cincinnati, Ohio, has added another distinctly different avenue to its diverse community of companies with the acquisition of DMS ink. Formerly known as Dayton Mailing Services, the acquired company brings high-volume personalized direct mail capabilities to the regional consolidator of print-related companies.

Aptly named, Graphic Village began about a decade ago as a loose partnership. Bramkamp Printing, a commercial printer, served as the core company, cross-selling services with other Cincinnati graphic companies including DocuPros Digital Printing, Premier Mail and Fulfillment, Everything’s Image apparel decorating, and Quality Custom Binders. Bramkamp and DocuPros eventually merged, taking on the name of the consortium as the new graphic services platform for Cincinnati-based private equity firm Revitalize Capital.

With the strategic vision of a multi-prong diversified graphic services provider firmly baked into its DNA, the series of acquisitions have not only built on the company’s core commercial printing services, but also branched out into marketing services and folding carton manufacturing. The purchase of direct mail provider DMS ink brings data management, high-speed inkjet personalization, mail preparation, and postal optimization into the Graphic Village family. High-volume direct mail services are traditionally not the typical playing field for a commercial printing company, and we suspect that the acquisition is likely to bring the Graphic Village group into competition with an entirely new league of players. The highly diverse strategy is in sharp contrast to that of other consolidators that are serial acquirers of similar building blocks, adding to their strength in one clearly defined core competency (see The Target Report: Catching the Wave in Corrugated Cartons, February 2020).

The acquisition of DMS ink, 60 miles from the company’s home base in Cincinnati, represents another leap of a different sort for Graphic Village. The prior acquisitions have notably all been located within a few miles, close by, just over the Ohio River in Kentucky, or in Cincinnati itself. In this regard, Graphic Village is part of a growing trend we have noted, that of the regional consolidator building out a network of complementary locations within a distinct geographic region or corridor (see The Target Report: Commercial Printing: Consolidation or Regional Expansion? November 2019).

Packaging

Brook & Whittle, a Connecticut company that manufactures prime labels, has acquired the Croydon, Pennsylvania shrink sleeve manufacturing facility. With backing by private equity firm Snow Phipps Group since October 2017, Brook & Whittle has been building out the platform originally backed by RFE Partners and Charter Oak, two private equity firms that had jointly acquired Brook & Whittle in 2009. Snow Phipps added to Brook & Whittle in October 2018 with the purchase of Prime Package and Label.

The Croydon facility was formerly known as Gilbreth Packaging Solutions, an innovator in shrink sleeve technology. The company’s engineers solved the distortion problems when shrinking films onto “full body” shaped packages and helped pioneer the now ubiquitous shrink sleeve labels market over 40 years ago. Gilbreth also was one of the first companies to introduce gravure printing on shrink film. The Gilbreth name disappeared almost ten years ago when Cenveo acquired the company in its now aborted foray into the packaging business (see The Target Report: The De-Evolution of Cenveo, April 2019)

Update: The Impact of Covid-19

Numerous newspapers and magazines appear to be early casualties of the Covid-19 crisis which is hitting the struggling publishing industry. Outlook Newspapers, a small operation in La Cañada, California, purchased three local newspapers, including the Burbank Leader, from the Los Angeles Times. The parent company had announced that publication of the three papers was scheduled to cease, reportedly due to the economic decline brought on by the outbreak of the coronavirus. The buyer, Outlook Newspapers, has announced plans to continue publication of the titles.

Nordstar Capital, a private equity company apparently formed for the sole purpose of buying Torstar, the publicly held owner of metro newspaper The Toronto Star, has announced an offer to take the company private in a deal valued at $38.7 million ($US). The company has reported dismal financial results. With a negative EBITDA, a multiple is a meaningless metric. Looked at a different way, the price offered represents just 11.4% of revenue, based on reported trailing twelve month revenues of $339 million ($US).

Forum Communications, based in Fargo, North Dakota, has announced the closing of two Minnesota local papers published by the company’s RiverTown Multimedia subsidiary. The Minneapolis StarTribune reported that six other local newspapers were all shutting down by the first week of May or had already ceased publication in April. The falloff in advertising due to the coronavirus was cited as the proximate cause.

Jostens, owned by the multi-billion dollar Platinum Equity private equity fund, announced the permanent closing of its yearbook publishing and printing facility in Visalia, California. The company noted that its products were highly cyclical and tied to high school and college graduation events. With schools closed across the country, the company has experienced an unexpected loss and decided to shutter the plant permanently.

Cenveo announced the closure of Cadmus Specialty Publications, its magazine printing plant in Richmond, Virginia, reportedly leaving several regional publications scrambling to find alternative sources to print and mail their magazines. Cenveo’s WARN act notice blamed the shutdown on the Covid-19 pandemic, noting that customers have ceased work permanently, or cancelled and delayed print projects.

We found only one bankruptcy filing in May, the Chapter 7 liquidation filing of Scheffer Printing, a small commercial printing company in Charleston, Missouri. It appears that the larger multi-plant companies are reacting quickly to the decline in business, closing facilities to rationalize capacity, able to shift work to remaining plants. Smaller companies are hanging on, at least for now, not having the option to move work to alternative facilities. With the economy “opening up” just as the initial PPP loans are hitting the original eight-week deadline to spend-and-be-forgiven, the fate of many small and midsize printing companies may hang in the balance.

2020 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

Nordstar Capital

No Data

Toronto, ON

Toronto Star (Prop. Torstar)

$339.2

Toronto, ON

5/26/20

$38.7

Acquisition

Metro newspaper

Link

Graphic Village (Port co. Revitalize Capital)

$22.0

Cincinnati, OH

DMS Ink

No Data

Yellow Springs, OH

5/20/20

No Data

Acquisition

Direct mail printing

Link

Total Ink Solutions

No Data

Hackensack, NJ

Champion Ink

No Data

North Bergen, NJ

5/7/20

No Data

Merger

Screen printing inks

Link

Brook & Whittle (Port co. Snow Phipps Group)

No Data

North Branford, CT

Croydon (né Gilbreth Packaging, Div. Cenveo)

No Data

Croydon, PA

5/7/20

No Data

Acquisition

Shrink sleeves

Link

Graphic Dimensions

No Data

Austell, GA

FormsAmerica

No Data

New Albany, IN

5/5/20

No Data

Acquisition

Forms printing

Link

Outlook Newspapers

No Data

La Cañada, CA

Burbank Leader (+2 titles) (Prop. Los Angeles Times)

No Data

Burbank, CA

5/2/20

No Data

Acquisition

Community newspapers

Link

Metro Printing Products

No Data

Greenwood, In

Class Print Solutions

No Data

Jeffersontown, KY

5/2/20

No Data

Acquisition

Commercial printing

Link

Great Little Box Company

No Data

Richmond, BC

Ideon Packaging

No Data

Richmond, BC

5/1/20

No Data

Acquisition

Folding & corrugated boxes

Link

2020 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:

No Chapter 11 Filings Found this Month

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Chapter 7 Filings:

Scheffer Printing, LLC

5/15/20

No Data

20-10388

Charleston, MO

8th

Eastern MO St. Louis

Barry S. Schermer

D. Matthew Edwards

Commercial printing

		2020 May - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues ($Mil )	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		Jostens - Printing plant	10/15/20	No Data	Visalia, CA	Jostens Port co. Platinum Equity	Minneapolis, MN	5/7/20	Yearbook publishing & printing	Link
		Cenveo - Printing plant	May-20	No Data	Richmond, VA	Cenveo	Stamford, CT	5/6/20	Former Cadmus Communications plant	Link
		Bulletin & 6 other papers	5/6/20	No Data	Woodbury, MN	RiverTown Multimedia (Sub. Forum Communications)	Fargo, ND	May-20	Community newspaper publishing	Link
		Thoroughbred Printing	6/15/20	No Data	Lexington, KY	None	N/A	May-20	Commercial printing facility	Link

Donuts Lead the Way in Return to Normalcy – June 2020 M&A Activity

July 7, 2020, 8:42 pm

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Buyers of packaging companies, both privately-owned and PE-backed, closed on deals in June, a clear demonstration of their confidence in the long-term economic recovery. However, confidence is not yet evident across the packaging board; a deeper look reveals a common thread among these early out-of-the-gate acquisitions. Despite the deep recession, everything that gets consumed still needs to be labeled, boxed, bagged, bottled, or pouched. As we transitioned to a nation of homebodies and online shoppers, what we are consuming is food; baked, processed, canned, dried, frozen, and all forms of packaged food. Bottled drink sales are up and consumption of in-home alcoholic beverages (and cannabis products where legal) have zoomed upward as we sit home and Zoom each other. Not surprisingly, sales of snack foods, in all forms, are especially booming.

Southern Champion Tray (SCT), a family-owned company headquartered in Chattanooga, Tennessee, acquired Honeymoon Paper Products. The acquired company manufactures corrugated circles and pads (aka “cake boards”) used in the take-out departments of bakeries and delis. SCT has announced that it plans to retain the workforce at Honeymoon and continue to operate the plant in Fairfield, Ohio. With over 650 employees, SCT produces over 500 stock products, as well as custom solutions, for customers primarily in the foodservice and bakery industries using offset litho, flexographic and digital printing technologies. The company’s products, while not glamorous, are ubiquitous and familiar; the white cake box tied with string at the local bakery, the printed tray used to serve fried chicken bits, the open-top French fry envelope, and the donut box with the glassine see-through top.

Welch Packaging is once again executing on its consistent and highly focused growth-by-acquisition strategy (see The Target Report: Catching the Wave in Corrugated Cartons, February 2020), with the acquisition of Excel Display and Packaging in Aurora, Illinois. True to Welch’s M&A history, the acquired company produces corrugated products, including food packaging. This is the third acquisition this year for Welch, and the second deal that is a carve-out of a company previously owned by pulp and paper manufacturer, the much larger Georgia-Pacific.

C-P Flexible Packaging, with private equity backing by First Atlantic Capital, acquired Genpak Flexible. The acquired company is headquartered in Aurora, Ontario, with an additional production facility in Lakeville, Minnesota. Consistent with the noted trend, Genpak’s business is primarily packaging for food, including manufacturing specialty multi-layer coffee bags, pet food pouches and bags, candy bar stick packs, and printed rollstock for others to use in their own packaging lines. And Genpak’s core business? Snack food packaging, for products from potato chip and tortilla chips to salted nuts and confectionaries.

Brook & Whittle, the Connecticut-based label printing company now backed by its second private equity sponsor, Snow Phipps Group, has acquired Label Impressions, located in Orange, California. Label Impressions utilizes Flexo presses, up to 10 colors, along with rotary screen printing, to produce labels, stand-up, zippered and gusseted pouches, as well as single-serve sachets and stick packs. Market segment served include beverages, food, specialty secure packaging for cannabis products, and lawn & garden products (another up-market as people stay home and groom their yards). Clearly confident in the market for packaging, this is the second deal for Brook & Whittle in as many months. 

June was the first relatively active month for M&A deals since the Covid-19 induced shut-down began mid-March. The renewed transactional activity is a clear indication that packaging manufacturers expect demand for packaged products to continue apace or grow, and as a consequence, the appetite for their packaging expertise and capacity will tag right along and grow also. A perfect recipe for more deals in the future.

Update: The Impact of Covid-19

In our opinion, the June deals are a clear sign of a thaw in the market; deals that were frozen when the virus broke out are now closing. In addition to the transactions noted above, which were likely in process and closed only after a restart and sufficient due diligence, other acquisitions completed in June include Baldwin Technology’s purchase of Western Quartz Products, an established producer of UV lamps which are used to cure UV-cured inks, increasingly used in offset printing production. In another deal, also likely in process before the freeze-up, Sun Chemical absorbed Sensient Imaging Technologies, a supplier of digital printing inks used in the rapidly growing application of inkjet printing technology in packaging, commercial printing, book printing, direct mail and transactional print segments.

There has not been a significant uptick in bankruptcy filings, as might have been expected. We found only three, two Ch. 7 liquidations and one Ch 11 petition for relief. A small letterpress shop in the Boston area, Goosefish Press, filed for Ch. 7, as did United Printing Media & Graphics in Gaithersburg, Maryland.

FiberCorr Mills, located in Massillon, Ohio, filed a voluntary Ch.11 petition, presumably to restructure the company’s debt and emerge with a cleaned up balance sheet. The filing by FiberCorr Mills represents a rare bankruptcy filing in the corrugated segment. Manufacturers of kraft and corrugated products have benefitted over the past several years from the increased demand for corrugated cartons and packing materials needed to ship all those online orders. Apparently, FiberCorr Mills is the exception; the company blamed its insolvency on economic forces, including China’s increased demand which drove up their cost for raw materials. We suspect that the $8.5 million purchase of a new state-of-the-art corrugator which went into live production in June 2019 also had something to do with the bankruptcy filing.

Where we did see a significant increase in distressed activity was in non-bankruptcy closures across several other industry segments. Commercial printing trade company 4over announced the permanent shut down of its printing plant in Mississauga, Ontario, after announcing temporary layoffs in March due to reduced demand in the wake of the Covid-19 outbreak. The presses and bindery equipment of Starnet Printing, a commercial printing company in Mahwah, New Jersey are scheduled to be auctioned off in early August. Catalog printer Arandell will close its Walton, Kentucky plant, ceasing operations by the end of July.

TC Transcontinental closed two newspaper plants in Québec when TC’s customer decided to permanently stop publishing the weekly papers that kept the plants busy. Weekend editions have been moved to TC Transcontinental’s newer and more efficient newspaper printing facility in Montréal. (For more on TC Transcontinental’s transformation into a packaging powerhouse, see The Target Report: Getting Flexible In Your Middle Years, April 2018).

Verso Paper announced the indefinite cessation of operations at two paper mills that produced graphic printing grades, citing the unprecedented decline in demand due to the Covid-19 pandemic. The two mills, in Duluth, Minnesota and Wisconsin Rapids, Wisconsin, will together layoff approximately 1,000 employees.

However, lest we leave the reader with a message of gloom and doom, the picture is more complex. The return of healthy M&A deals, as noted in our June deal log below, as well as the number of inquiries we are receiving here at GAA from buyers seeking to acquire printing and packaging companies, indicates that buyers are restarting their deal engines, coming back into the market, and are ready to close deals.

2020 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

Pocket Outdoor Media

No Data

Boulder, CO

Health & fitness publications (Div. Active Interest Media)

No Data

El Segundo, CA

6/30/20

No Data

Acquisition

Magazine publisher

Link

Southern Champion Tray

No Data

Chattanooga, TN

Honeymoon Paper Products

No Data

Fairfield, OH

6/29/20

No Data

Acquisition

Bakery & deli packaging

Link

Turbo Images

No Data

Saint-Georges, QC

Lettrapub

No Data

Sainte-Marie, QC

6/29/20

No Data

Acquisition

Wide format fleet graphics

Link

MetroVCS

No Data

Dallas, TX

Sunbelt Letterpress

No Data

Dallas, TX

6/24/20

No Data

Acquisition

Letterpress & finishing

Link

C-P Flexible Packaging (Port co. First Atlantic Capital)

No Data

York, PA

Genpak Flexible (Port co. Jim Pattison Group)

No Data

Aurora, ON

6/19/20

No Data

Acquisition (Mesirow)

Labels & flexible packaging

Link

Brook & Whittle (Port co. Snow Phipps Group)

No Data

North Branford, CT

Label Impressions

No Data

Orange, CA

6/18/20

No Data

Acquisition

Labels & flexible packaging

Link

TC Transcontinental

$2,095

Montreal, QC

Enviroplast

No Data

Anjou, QC

6/16/20

No Data

Acquisition

Plastic recycling

Link

Baldwin Technology (Port co. BW Forsyth Capital)

No Data

St. Louis, MO

Western Quartz Products

No Data

Paso Robles, CA

6/9/20

No Data

Acquisition

UV curing lamps

Link

The Sourcing Group (TSG)

No Data

New York, NY

BrandAlliance-US

No Data

Charlotte, NC

6/9/20

No Data

Sale in foreclosure

Promotional products

Link

Welch Packaging Group

No Data

Elkhart, IN

Excel Displays & Packaging (Div. Georgia-Pacific)

No Data

Aurora, IL

6/8/20

No Data

Acquisition

Retail display & packaging

Link

PDF Communications

No Data

Signal Hill, CA

Bestforms

No Data

Camarillo, CA

6/7/20

No Data

Acquisition (Corp Dev Assoc)

Label & forms printing

Link

Sun Chemical (Div. Dainippon Ink & Chemicals)

$7,000

Parsippany, NJ

Sensient Imaging Technologies

No Data

Morges, Switzerland

6/2/20

No Data

Acquisition

Digital inks

Link

Shamrock Capital

No Data

Los Angeles, CA

Adweek (Port co. Berginger Capital)

No Data

New York, NY

6/2/20

No Data

Acquisition

Magazine publisher

Link

2020 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:

FiberCorr Mills

6/18/20

No Data

20-61029

Massillon, OH

6th

Northern OH Canton

Russ Kendig

Anthony DiGirolamo

Corrugated sheets & rolls

Chapter 7 Filings:

Goosefish Press, Inc.

6/3/20

No Data

20-11254

Hull, MA

1st

Massachusetts Boston

Frank J. Bailey

AnDre' D. Summers

Letterpress printing

United Printing Media & Graphics, LLC

6/1/20

No Data

20-15709

Gaithersburg, MD

4th

Maryland Greenbelt

Thomas J. Catliota

Sari Karson Kurland

Commercial printing

		2020 June - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues ($Mil )	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		4over - Printing plant	Jun-20	$11.0	Mississauga, ON	4over	Glendale, CA	6/17/20	Commercial trade printing	Link
		TC Transcontinental - Printing plant	Jun-20	No Data	Québec City, QC	TC Transcontinental	Montreal, QC	6/17/20	Newspaper printing	Link
		TC Transcontinental - Printing plant	Jun-20	No Data	Gatineau, QC	TC Transcontinental	Montreal, QC	6/17/20	Newspaper printing	Link
		Starnet Printing	Aug-20	No Data	Mahwah, NJ	None	N/A	Jun-20	Commercial printing	Link
		Arandell - Printing plant	7/31/20	No Data	Walton, KY	Arandell Corp	Menomonee Falls, WI	Jun-20	Catalog printing	Link
		Loudon Machining (manroland service organization)	Jun-20	No Data	Effingham, IL	manroland Goss Americas	Durham, NH	6/10/20	Consolidation into NH location	Link
		Duluth paper mill	Jun-20	No Data	Duluth, MN	Verso Paper	Memphis, TN	6/9/20	Paper mill, graphic paper grades	Link
		Wisconsin Rapids, WI	Jul-19	No Data	Wisconsin Rapids, WI	Verso Paper	Memphis, TN	6/9/20	Paper mill, graphic paper grades	Link

Buyers are On The Move and On Track – July 2020 M&A Activity

August 7, 2020, 7:31 pm

≫ Next: The Target Report Annual Recap – August 2020 TTM M&A Activity

≪ Previous: Donuts Lead the Way in Return to Normalcy – June 2020 M&A Activity

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Serial buyers are back in the market for print-centric company assets, each executing on their own unique and established long-term strategic direction. While some of the transactions in July appear or are clearly opportunistic, these companies are not veering wildly off course from their pre-Covid-19 track.

CJK Group, a Minnesota-based company consolidating companies in the book manufacturing industry, acquired the equipment and customers of Quad’s mammoth book printing and binding facility in Versailles, Kentucky. The 1,000,000 square-foot facility produces softcover and hardcover books, as well as publications. CJK is rebranding the plant as Sheridan Kentucky, a division of the Sheridan companies that CJK acquired in 2017 from private equity firm Jefferies Capital Partners (see The Target Report: Legacy Printing Companies Fade Into History – April 2017).

The sale of the Kentucky plant represents a major step forward for Quad in its journey to exit the book manufacturing business, an element of its “3.0 Transformation strategy.” The roadmap calls for Quad, organically and through M&A strategies, to change itself into a marketing solutions partner, presumably bridging the gap between the big creative advertising agencies and companies that just print (see The Target Report: Turning a Big Ship – Quad/Graphics Acquires Ivie - February 2018). According to the company’s website, Quad is well on its way; non-print “integrated solutions” accounted for 21% of 2019 net sales. Apparently, customers that buy books do not utilize the other elements of Quad’s total suite of offerings and therefore book manufacturing does not fit the company’s long-term strategic vision. In addition to the sale of the Kentucky plant to CJK, Quad has announced that its West Virginia and Pennsylvania book manufacturing operations are also for sale.

Quad’s major competitor, LSC Communications, was following a similar strategy, bolting on marketing automation and technology offerings onto its core business of printing magazines, catalogs and books (see The TargetReport: If you Can’t Beat ’em, Join ’em - July 2018). However, for LSC, the strategy missed the mark and the company eventually sought to sell itself and announced in October 2018 that it had accepted an offer from Quad. When that deal failed to pass muster with the US Department of Justice (the industry is still scratching their head over that decision), LSC had no choice but to file for Chapter 11 bankruptcy this past April. In the meantime, LSC began shutting down its magazine and catalog printing plants, closing three in January and one more in April this year.

All of which brings us back to the CJK Group, a company that has focused primarily on acquiring print assets in book production and knows when to move forward on its strategy . CJK has in a few short years grown by acquisition into a major book manufacturing company (see The Target Report: CJK Group Opens Next Chapter with Loan-to-Own Strategy – March 2019). Meanwhile, CJK’s main competition in books is adrift or pulling out. While Quad exits book manufacturing, LSC has the challenge of too much debt and may be broken into pieces in the pending sale process under the supervision of the US Bankruptcy Court. It appears that the contest for supremacy in book manufacturing will be between LSC Communications’ book division (however it emerges from bankruptcy) and the CJK Group which continues straight ahead on its track to become a major US book manufacturer.

Commercial Printing and Diversified Services

Mittera Group has announced the acquisition of certain assets of Minneapolis-based Ambassador Press. The acquired business brings customers and expertise to Mittera in point-of-purchase and retail display services. Ambassador utilized wide format digital printers as well as large format offset presses. The production services of Ambassador will be tucked-in to Mittera’s Chicago and Iowa locations. Presumably some of the work will end up in the former location of Fuse, a failed mini roll-up of three commercial printing companies that was acquired by Mittera in November 2019.

Mittera is arguably the only company actively rolling up commercial printing companies on a national basis and is great example of a serial acquirer with a clear strategic vision, closing transactions on an almost clock-like schedule. Beginning from its origins as the Iowa-based, family-owned Rock Communications, its first acquisition was the purchase of ColorFX in 2007, followed up by acquisitions of some of the industries’ leading companies (see The Target Report: Consolidation in Commercial Printing Rolls On - December 2018). If past is prologue, we won’t be surprised to see Mittera stay on track with its clearly defined and disciplined roll-up strategy regardless of, and possibly accelerated by, the current downward economic cycle.

Marketing Execution (Print Management)

Innerworkings is being acquired by HH Global. Both companies have for years successfully inserted themselves as intermediaries between many printing companies and their biggest (formerly) loyal corporate customers. By combining the purchasing power of many large clients, and taking advantage of overcapacity in the printing industry, these print management companies have driven many printers to accept unsustainable price reductions. Inevitably, some printing companies chase the volume offered by the print management company with the predictable result that a printer’s “key account” either becomes a loser or goes elsewhere. The impact on many family-run printing companies has been devastating.

Despite growing to over a billion dollars in annual revenue since 2014, Innerworkings has not reported a profit since 2017, EBITDA was a dismal 3.3.% in 2019, and the company has struggled with accounting irregularities, delayed SEC filings and restatement of previously filed financial statements. HH Global has offered $3.00 per share for the company, above the recent market price, but significantly less than Innerworkings’ high over time and approximately half the value as recently as December 2019. In effect, HH Global is acquiring a $1.1 billion book of business for $177 million and assuming Innerworkings’ leading position in the North American market for marketing execution and print management services.

From the perspective of the commercial printing company owner, HH Global will not likely be any more welcome than Innerworkings when the call comes that the printer’s best customer has engaged HH Global as their print management company. The printer soon learns that the customer’s print buyer has been “rebadged” (i.e. the buyer now works for the print management company instead of the customer) and is now charged with an unreasonably aggressive goal to drive costs out of the print supply chain. I suspect that not many tears will be shed in the printing community for the demise of Innerworkings.

Newspaper Publishing

Chatham Asset Management, a New Jersey-based hedge fund, has acquired McClatchy, the publisher of over 30 newspapers, including major metro papers The Sacramento Bee (the original McClatchy paper, dating back to 1857), The Kansas City Star and the Miami Herald, among others. McClatchy filed for bankruptcy in February, struggling to survive the downturn in advertising revenues, unable to meet pension obligations, and burdened with a massive debt hangover from its ill-timed $4.5 billion purchase in 2006 of its bigger competitor Knight Ridder. Chatham emerged as the victor in the company’s 363 sale in bankruptcy, using its position as McClatchy’ secured biggest creditor to credit bid $263 million of its debt plus $49 million in new money.

Chatham is no stranger to the suffering newspaper industry. In 2016, Chatham acquired two-thirds ownership of Postmedia, Canada’s largest newspaper chain, in an out-of-court loan-to-own strategy, trading debt for a majority ownership stake. Chatham also controls American Media, publisher of sensationalist tabloid titles including most famously the National Enquirer. Chatham joins Alden Global Capital and Fortress Investment Group as major players in the transition of US newspapers to ownership by financial institutions. The McClatchy family, no longer involved, ran the papers in the tradition of civically-minded family stewardship and journalistic excellence that dates back to the 1800’s.

Update: The Impact of Covid-19

The impact of the virus on M&A activity has not been as dramatic as might be expected, at least not yet. Bankruptcies in the industry are few, while plant closures continue at a steady, but not greatly accelerated, pace. Unfortunately, we expect that will change as the PPP loans are exhausted and print volumes stay depressed. For some companies, especially those that operate in the undifferentiated commercial print segment, the recovery cannot come soon enough.

We found no new Chapter 11 bankruptcy filings in the printing, packaging and related industries and only two Chapter 7 liquidations, one a small screen printing company in New Mexico and the other an involuntary bankruptcy involving the Ebony and Jet publishing brands. This is the second time these brands are in Bankruptcy Court, having been sold to private equity investors in the original Chapter 7 bankruptcy of Johnson Publishing, filed in April of 2019.

Ebony, founded in 1945 by John Johnson, and a beacon of black entrepreneurship in America and at one time a prominent Chicago business with an iconic headquarters building on Michigan Avenue, ceased publication of its print editions with its Spring 2019 issue. The website went offline this March. Ebony’s sister publication, Jet, the pocket-sized weekly magazine, ceased print publication back in 2014. Ebony and Jet at one time were highly influential in changing cultural attitudes in the US. In a different time and place, the instant sharing of video via social media did not exist, and print held center stage to bring news to the public’s attention. Jet famously published the photo of 14-year-old Emmett Till lying in his casket with his mother looking on after he was killed in 1955 in Mississippi. The photo was the 1950’s equivalent of the George Floyd video and was the spark that lit up the civil rights movement. That photo, along with the magazine’s entire archive, was sold to a group of philanthropic organizations in the first bankruptcy proceedings and is not included in this latest spat over the remains of Ebony and Jet.

Non-bankruptcy closures continued apace. The assets of direct mail company Pacific Marketing in Milwaukie, Oregon are being auctioned off due to a complete plant closure, as are the assets of Rickard Bindery in Chicago, and the screen printing equipment of retail display printing company Mark-It Graphics in Osceola, Wisconsin.

RR Donnelley announced the closing of The Hennegan Company printing plant, one of the formerly independent printing companies that RRD acquired when it bought Consolidated Graphics (CGX) in 2014. Located in the greater Cincinnati area, Hennegan was a plum acquisition for CGX which was rolling up the commercial printing industry with over 70 acquisitions in a strategy that maintained the independence and separate local brand identity of the acquired companies. Many of those locations have now closed. The 210,000 square foot Hennegan sheetfed and web printing facility now joins others in the CGX graveyard.

At one time, Hennegan was considered the pinnacle of quality and service in the commercial printing world. I started my post-college career in 1980 in the industry selling high quality printing for Compton Press, a long-defunct family-owned printing company in Morristown, New Jersey. We prided ourselves on working hard to produce a high-quality product for accounts; mine included IBM, Merck, James River Paper and some very demanding graphic design firms. We faced tough competition, often up against the LP Thebault Company (parts of which are incorporated into the aforementioned Mittera) which was always seemingly a step ahead of Compton in customer’s minds. But when the most demanding and famous New York graphic design boutique firms wanted the best of the best, there was no competing with the reputation and craftsmanship of the renowned Cincinnati printer, The Hennegan Company.

2020 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

Robustelli (Div. Seiko Epson)

No Data

Villa Guardia, Italy

For.Tex (Div. Seiko Epson)

No Data

Fino Mornasco, Italy

7/30/20

No Data

Merger

Fabric printers & inks

Link

Mittera Group

No Data

Des Moines, IA

Ambassador Press

No Data

Minneapolis, MN

7/24/20

No Data

Asset Acquisition

Retail display

Link

Benpac Holding

No Data

Stans, Switzerland

Gallus Group (Sub. Heidelberg)

No Data

St. Gallen, Switzerland

7/22/20

$141.0

Acquisition

Narrow web presses

Link

Don Hurd (Owner of Hometown Media)

No Data

Fowler, IN

Daily Clintonian

No Data

Clinton, IN

7/21/20

No Data

Acquisition

Community newspaper

Link

HH Global Group

$488.4

Leatherhead, England

InnerWorkings

$1,150

Chicago, IL

7/16/20

$177.0

Acquisition

Print & brand management

Link

Chatham Asset Management

No Data

Chatham, NJ

The McClatchy Company (30 news organizations)

$739.4

Sacramento, CA

7/13/20

$263.0

363 Sale in Ch. 11

Metro & regional newspapers

Link

Avery (Div. CCL Industries)

$5,290

Toronto, ON

InTouch Label and Packaging

$9.5

Lowell, MA

7/2/20

$10.9

Acquisition

Digital label printing

Link

CJK Group

No Data

Brainerd, MN

Book manufacturing plant (Div. Quad/Graphics)

No Data

Versailles, KY

7/1/20

No Data

Acquisition

Book manufacturing

Link

2020 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

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---

---

---

---

---

---

---

---

Chapter 7 Filings:

Ebony Media Holding, LLC

7/24/20

No Data

20-33667

Houston, TX

5th

Southern TX Houston

Jeffrey P. Norman

Pro Se

Magazine publishing

Quality Screen Print Corporation

7/6/20

No Data

20-11370

Albuquerque, NM

10th

New Mexico Albuquerque

David T. Thuma

James A Askew

Screen printing

		2020 July - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues ($Mil )	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		The Hennegan Co. (Div. RR Donnelley)	Jul-20	No Data	Florence, KY	RR Donnelley	Chicago, IL	7/28/20	Commercial printing	Link
		Pacific Marketing	8/18/20	No Data	Milwaukie, OR	None	N/A	Jul-20	Direct mail printing	Link
		Mark-It Graphics	8/20/20	No Data	Osceola, WI	None	N/A	Jul-20	Wide format & screen printing; retail display	Link
		Rickard Bindery	9/10/20	No Data	Chicago, IL	None	N/A	Jul-20	Bindery services	Link

The Target Report Annual Recap – August 2020 TTM M&A Activity

September 8, 2020, 8:00 pm

≫ Next: CJK Goes Global as Cenveo Unwinds – September 2020 M&A Activity

≪ Previous: Buyers are On The Move and On Track – July 2020 M&A Activity

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As readers of The Target Report know, we view the printing, packaging, and related industries from the perspective of M&A transactional activity. Over the past nine years, we have chronicled, logged, and commented on the robust merger and acquisition activity in the print-centric business segments. We traditionally take a break at this time of the year and depart from our usual review of the prior months’ deal activity to take a look back at the past twelve months from a macro high-level perspective. Our goal is to identify some long-term trends. Which segments have experienced more, or less, deal activity? What are the trends in rationale behind acquisition activity? Are acquirers adding facilities to their networks, or opportunistically folding acquisitions into their existing facilities?

We review, categorize, sort, count and chart the data we have amassed, comparing the trailing twelve months (“TTM”) ended this August to the prior twelve months. In M&A terms, the past twelve months were definitely quieter than the twelve months ended August 2019, with approximately 14% fewer transactions than last year, which in turn had 8% fewer transactions than the prior year. As you can see from the chart below, deal activity started off 2020 with a bang, came to a screeching halt in March and April, and has now begun to trend back to normal. There were sixteen transactions in August, the same number as last year.

Of course, despite some returning semblance of normalcy, this year has been different, especially the past six months. The outbreak of Covid-19 has changed the economic landscape. Building personal relationships between seller and buyer are a fundamental element of most transactions and form the foundation for the most successful deals. Transactions are more difficult to bring to a close in a virtual world. Yet, despite the challenges, deals are getting done. As noted in our past two reports, buyers are marching forward, maintaining their strategic focus and closing deals. It is too soon to ascertain what the eventual impact of Covid-19 will be on the print-centric industries, yet some trends are beginning to emerge as evidenced by our research on transactional activity.

The bright spot is clearly packaging, with buyers exhibiting very keen interest in labels, corrugated cartons and to some extent folding cartons. There has been continued participation in the market by well-funded private equity firms and large corporate buyers. Flexible packaging remains highly desirable for buyers, but fewer deals are getting done involving flexible packaging as the supply of target companies is limited compared to other packaging segments.

Activity is up in the wide format segment; however, we make note of an increase in the number of tuck-ins in the wide format business, indicative of overcapacity, something almost nonexistent not too long ago. Presumably, some of this activity is due to the decline of “brick and mortar” retail, greatly exacerbated by the Covid-19 shutdown. This double-whammy has created a challenging situation for the wide format shops that are focused on retail signage and display. There was a flurry of printing the ubiquitous floor stickers and window signs announcing and enforcing the new social distancing requirements, but that has likely run its course by now.

Publishing in print form, with the exception of books, is in a virtual free-fall, with newspapers either headed online or closing down completely. Several major newspapers now claim significantly more subscribers to their online content than to their printed editions. More telling than numbers of subscribers, some have now even crossed the line where revenues from online subscriptions exceed those from print. Those “digital dimes” are adding up, while “analog dollars” continue to decline. That trend will continue. Magazines face similar challenges as advertisers shift dollars online and readers follow. In the case of catalog printers, print customers hit the “pause button” hard and fast as soon as the lockdowns began. How many catalogs do you get in the mail anymore?

Commercial printing establishments appear to be in a holding pattern for now, with deal activity appreciably less than in recent years. Many owners we talk with in the commercial segment are waiting to see if the good times will roll again when the virus is brought under control. Nonetheless, many are expecting the weaker players to begin to falter and seek shelter in a sale to a stronger player. That is consistent with our expectation; activity will increase in the commercial segment. Consolidation will pick up steam as government subsidies run out. However, we note that direct mail printing companies, especially those that can manage, manipulate, store, and utilize data to drive improved results for their customers, are likely an exception and in a class by themselves, apart from the more generalized undifferentiated “job-shop” commercial printing companies.

Commercial Printing

We did a deep dive into the rationale behind the transactions in the commercial printing segment and we find that the majority are once again 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 twelve 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. As a percentage of total deals announced in commercial printing, tuck-ins dropped to 50%, compared to a whopping 70% last year.

There were eight acquisitions in the commercial printing segment where the acquired facility was important to the buyer and will remain in operation, four of these were sold to new owners that acquired the company in a fully operating mode. Two of those new owners were ESOPs transitioning ownership to the employees.

There were two acquisitions where the acquirer noted that the purchased company added to their service offerings, as well as two deals where the stated logic was to expand geographically. Of all twenty-four transactions that we found in the commercial printing segment, none had a private equity sponsor and consequently there were no companies purchased to form a new “platform” for building out a larger company.

Wide Format and Retail Display

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, but consistent with last year, about of quarter of the deals were tuck-ins, with the seller’s plant shuttered and production consolidated in the buyer’s existing facility.

Three buyers cited adding or greatly expanding wide format as a service offering as the logic supporting the acquisition. Two buyers noted geographic expansion as important to the decision to move forward. Five transactions involved participation by private equity in the deal, with three of those creating a new platform company for the fund. These trends, especially the involvement of financial buyers and the establishment of platforms for bolting on acquisitions, are indicative of more M&A activity and consolidation on the horizon for wide format printing companies. 

Packaging

The picture that emerges in the packaging segment is very different. Of the thirty-eight transactions that we recorded over the past twelve months in the packaging segment, only four were reported to be tuck-ins, two that produced labels and two that manufactured corrugated boxes. 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.

Private equity was involved in fourteen 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. We noted only one new platform established by private equity in packaging, compared to no new platforms last year. This high level of private equity activity, coupled with only one new platform started over the past two years indicates 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.

Nine of the buyers noted that the acquisition brought new services to the company, or significantly expanded on a small beachhead previously established in that service. For example, one high-end prime label printing company acquired a digital label printing company rather than continue to build out the internal effort. In nine instances, geographic expansion or diversity of the acquired locations was also noted as a key element in the buyer’s logic.

As noted earlier, activity with the packaging industry was predominately in the labels business, with many of the transactions marking the end of family ownership of independent single-location companies. There was also a steady flow of corrugated carton and paperboard folding carton companies coming to market and finding buyers.

Direct Mail

Transactional activity in direct mail printing was on the upswing over the past twelve months, with a total of nine deals announced, versus only five the prior year. The majority of these were additional facilities for the acquirers. Two were tuck-ins, compared to no tuck-ins last year.

Of special note, four of the transactions in direct mail involved private equity backers, and two of those were new platforms. While deal activity is not as robust as in the wide format segment, indicators are beginning to flash that we will see some more consolidation occurring in the direct mail segment.

Challenged Segments

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).

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 packaging industry consolidates.

Despite the outbreak of Covid-19, the number of bankruptcies for the past twelve months decreased to 36 filings, down from 41 the prior year, which was down from 45 filing the year before that. (We will continue to closely monitor this activity as the economic impact of the Covid-19 virus plays out – stay tuned to The Target Report.)

And finally, 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. Also consistent with the bankruptcy filing data, the number of non-bankruptcy closures in the past twelve months declined from the prior year, including the commercial printing segment. As also might be expected with the closing of the Cenveo (né Cadmus) plant, the closure of LSC plants in preparation for the company’s bankruptcy filing, and Quad’s quick response to Covid-19, there was an uptick of closures of publication and catalog printing plants.

2020 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

Arkansas Democrat-Gazette (Prop. WEHCO Newspapers)

No Data

Little Rock, AR

Pine Bluff Commercial (Prop. Gannett)

No Data

Pine Bluff, AR

8/31/20

No Data

Acquisition

Community newspaper

Link

Carmel Hill Acquisitions

No Data

Ann Arbor, MI

TGI Direct

No Data

Flint, MI

8/31/20

No Data

Acquisition

Direct mail & fulfillment

Link

Mill Rock Packaging Partners (Port co. Mill Rock Capital)

No Data

New York, NY

TrojanLitho

No Data

Renton, WA

8/25/20

No Data

Acquisition

Folding cartons

Link

Hemlock Printers / PDI Group (Joint venture)

No Data

Burnaby, BC Kirkland, QC

PrismTech

No Data

Burnaby, BC

8/25/20

No Data

Acquisition

Wide format printing

Link

Sunset Printing & Brand Mngt.

No Data

Wharton, NJ

Remco Press

No Data

North Bergen, NJ

8/21/20

No Data

Asset Acquisition (Graphic Arts Advisors)

Commercial printing

Link

Accelerate360 (Port co. Chatham Asset Mngt.)

No Data

Smyrna, GA

American Media (Port co. Chatham Asset Mngt.)

No Data

New York, NY

8/21/20

No Data

Merger

Tabloid magazines

Link

Strategic Factory

No Data

Owings Mills, MD

High Mountain Signs

No Data

Baltimore, MD

8/17/20

No Data

Acquisition

Signs & wide format printing

Link

Intellicor

No Data

Lancaster, PA

Printing operations (Div. Cenveo)

No Data

Lancaster, PA

8/12/20

No Data

Acquisition

Publication printing

Link

Intellicor

No Data

Hurlock, MD

Printing operations (Div. Cenveo)

No Data

Lancaster, PA

8/12/20

No Data

Acquisition

Fulfillment & digital printing

Link

Kornit Digital

$159.6

Rosh-Ha`Ayin, Israel

Custom Gateway

No Data

Macclesfield, UK

8/11/20

No Data

Acquisition

Workflow software

Link

CCL Industries

$3,936

Toronto, ON

Graphic West International

$42.0

Horsholm, Denmark

8/10/20

$36.0

Acquisition

Folding cartons (digital print)

Link

Domino Printing Sciences (Div. Brother Industries)

$571.6

Cambridge, UK

Lake Image Systems

No Data

Herts, UK

8/5/20

No Data

Acquisition

Visual inspection systems

Link

CERM Mngt Team

No Data

Oostkamp, Belgium

Heidelberg

$2,605

Heidelberg, Germany

8/5/20

No Data

Mngt. Buyout

MIS system for printing

Link

Arden Software

No Data

Stockport, UK

Cimex

No Data

Belchertown, MA

8/5/20

No Data

Acquisition

Packaging CAD/CAM systems

Link

Sonoco

$5,370

Hartsville, SC

Can Packaging

$27.0

Habsheim, France

8/3/20

$49.0

Acquisition

Paper containers

Link

RPI (Port co. Riverlake Partners)

No Data

Seattle, WA

Blurb

No Data

San Francisco, CA

8/3/20

No Data

Acquisition

E-commerce site & system

Link

2020 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:

And Ink 1, LLC

8/14/20

No Data

20-31904

Knoxville, TN

6th

Eastern TN Knoxville

Suzanne H. Bauknight

Thomas Lynn Tarpy

Apparel printing

Arandell Holdings

8/13/20

$103.0

20-11941

Menomonee Falls, WI

3rd

Delaware Wilmington

John T. Dorsey

Elizabeth L. Eddy

Catalog printing

Chapter 7 Filings:

Interstate Graphics of Morristown, Inc.

8/27/20

No Data

20-12311

Morristown, TN

6th

Eastern TN  Chattanooga

Nicholas Whittenburg

John P. Newton, Jr.

Commercial printing

 

		2020 August - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues ($Mil )	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		Alvin & Co.	9/4/20	No Data	Bloomfield, CT	None	N/A	8/27/20	Reprographic & art supplies	Link

CJK Goes Global as Cenveo Unwinds – September 2020 M&A Activity

October 7, 2020, 8:27 pm

≫ Next: Deconsolidation of the Consolidators – October 2020 M&A Activity

≪ Previous: The Target Report Annual Recap – August 2020 TTM M&A Activity

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CJK Group, the grand master consolidator of formerly distressed assets in the book manufacturing and journal printing segments, adds another chapter to its book of business with the acquisition of Cenveo Publisher Services and Cenveo Learning. The acquired business includes offices in London and four locations in India, creating for the first time a global presence for CJK. The acquired business units will be merged with its existing content services businesses, Sheridan Journal Services and the hosting platform Sheridan PubFactory. The various business units will now all be rolled up together and rebranded as KnowledgeWorks Global.

In addition to going global, the new combined business unit pushes CJK further upstream in the production cycle of bringing books and journals to its customers. Content services offered include project management, content development, editorial services, peer review management, art and design services, rights and permissions management, translation and accessibility services, eLearning, online hosting and presumably transitioning completed documents to one of CJK’s production facilities for printing, binding and distribution.

As we have noted in past Target Reports, the CJK Group has stayed laser-focused on acquiring print assets in the book and related print production segments, often swooping in to save, revitalize or absorb ailing companies (most recently Thomson-Shore), stalled roll-ups (Blackford Capital’s Printing Consolidation Company), treading water portfolio companies (Jefferies Capital’s Sheridan Group), corporate orphans (Quad’s book manufacturing plant), and this latest transaction, the product of a formerly bankrupt restricted roll-up in the process of unwinding itself (Cenveo’s aforementioned content services).

CJK was featured in our report as recently as this past July, noted for staying the course on the company’s strategic acquisition track in the midst of what arguably was the point of least visibility forward out of the Covid-19 induced recession (see The Target Report: Buyers are On The Move and On Track – July 2020). With the benefit of hindsight and considering the emerging consensus that there is now a shortage of book manufacturing capacity, CJK’s acquisition of Quad’s one million square foot book printing and binding facility in Versailles, Kentucky looks like a smart move. Nonetheless, we suspect it took both a good hard reality check and a big dose of believing in their strategic plan for the CJK team to proceed with the deal back in April, May and June of this year, announcing the completed transaction on July 1st. (And, yes, you read that correctly, there is at least one segment of the printing industry in which demand currently outstrips capacity and that is book manufacturing!)

The company has honed its expertise in acquiring assets that are impaired, or in the case of specialty book printing company Thomson-Shore, bankrupt. CJK executed a textbook strategic acquisition of a distressed company’s assets under the 363 provisions of the US Bankruptcy code by extending loans to Thomson-Shore both before and after the filing of the Chapter 11 bankruptcy (see The Target Report: CJK Group Opens Next Chapter with Loan-to-Own Strategy – March 2019). By taking on the “stalking horse” position, they controlled the process and were in the best position to bid on the assets and ultimately prevail in the purchase.

The latest acquisition, the purchase of Cenveo’s Publisher Services, appears to dovetail nicely into the suite of services offered by CJK’s Sheridan division which assists publishers of scholarly and technical journals, books, magazines, and catalogs. These service offerings, at both the acquiring and acquired entities, sit on top of strong technology platforms, which will now benefit from the combination.

On the other side of the transaction, the seller, Cenveo, continues to unwind the diverse range of print-centric assets that were seemingly pasted together willy-nilly throughout the late 1990’s and 2000’s. The sale of its technology-based content services is one of a continuing parade of divestitures, both before Cenveo’s bankruptcy and after its emergence from bankruptcy as a private company in September 2018. (see The Target Report: The De-Evolution of Cenveo – April 2019).

Commercial Printing and Diversified Services

BR Printers, based in San Jose, California, acquired the on-demand printing company Content Management Corporation located in Fremont, California. Both companies offer a wide range of commercial services, including print, direct mail, wide format, promotional items, kitting and fulfillment services, with online customer storefront portals.

Mainline Printing, located in Topeka, Kansas, has acquired the printing assets of Go Modern which was owned by Advisors Excel, a marketing firm focused on assisting financial advisors to build their individual practices. The Go Modern division, which provides marketing and promotional products, decided that its printing production capability was not core to its business, and will now outsource its print related services to Mainline. Selected equipment and print production employees will move to Mainline’s facilities. The promotional products business and related employees will remain with Go Modern. As noted in our report last month, approximately 50% of transactions in the commercial printing segment are similarly structured as a “tuck-in” from one entity to another as the industry continues to consolidate.

Packaging - Labels

Essentra Packaging, a division of Essentra, a UK-based global diversified engineering and parts manufacturer, has acquired 3C! Packaging in Clayton, North Carolina. The acquired company prints and produces folding cartons, product information inserts, blister packs, flexible packaging, and labels, primarily for the pharmaceutical industry. The company has a differentiating factor with its sterilization technology.

Texas-based Frankston Packaging Company has acquired Paco Label Systems. Frankston has grown from primarily a folding carton company to a producer of a diverse range of products including pressure sensitive labels. Consistent with the majority of acquisitions in the packaging segment, the Paco plant will continue operations as a separate additional facility for Frankston.

Meyers, based in Minneapolis, announced the acquisition of the sheetfed business unit of Insignia Systems. Meyers specializes in printed signage, large format printing, prime labels, retail displays, folding cartons, and corrugated packaging, with a focus on marketing in retail environments. The seller, Insignia Systems, provides a range of marketing services and in-store printed promotional items to grocery and similar consumer products outlets such as right-angle signs that fit easily into standard store shelf channels, and stand-up product displays. The acquired business unit produces cut & stack labels and other in-store products and furthers Meyer’s expansion into the grocery channel.

Update: The Impact of Covid-19

Although there were fewer transactions in September than in August, which is unusual, there was still a steady, albeit reduced, drumbeat of M&A activity, and most of the activity that is occurring appears to be driven by clear-eyed strategic thinking and not by overreactions to the dramatic dips in revenues that many printing companies experienced. We are beginning to hear from some companies that sales are almost back to 100% of pre-Covid-19 revenue levels, and in some instances, at or above last year’s results. The key differentiating factor is clearly what particular industry a printing company serves and how those customers have been impacted by the shut-downs. Theatre, museums, and other venue-centric promotions are virtually non-existent, political work is booming (for now, at least).

There were a couple smaller commercial printers that closed up shop. News Corporation, the publisher of The Wall Street Journal and The New York Post, among other titles, is consolidating its New York City printing plants, closing up the Bronx location and moving the work to its Queens plant. LSC Communications announced another closing, this one its book manufacturing plant in Kendallville, Indiana (LSC simply cannot seem to get its timing right - as noted above, publishers are bemoaning the shortage of book production capacity! Let’s hope that Atlas Holdings prevails in its stalking horse bid for LSC Communications and the company emerges from bankruptcy well-positioned to stop the hemorrhaging of its post-RRD existence.)

Speaking of bankruptcies, we found no new bankruptcy filings in September in the printing, packaging, or related industries. This has not happened since August 2018 when the economy was still chugging along in growth mode. However, we do expect that there will be, at some not too distant time, a robust consolidation phase in some print segments, driven by the recession, and exacerbated by the forced transition to electronic media which has changed user habits, some probably permanently. Commercial printing and publication printing will be most affected. 

2020 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

Mainline Printing

No Data

Topeka, KS

Print Operations (Div. Advisors Excel)

No Data

Topeka, KS

9/30/20

No Data

Asset Acquisition

Commercial Printing

Link

LLFlex

No Data

High Point, NC

Hamden Papers

No Data

Holyoke, MA

9/29/20

No Data

Asset Acquisition

Specialty paper converting

Link

BR Printers

No Data

San Jose, CA

Content Management Corporation

No Data

Fremont, CA

9/25/20

No Data

Acquisition

Commercial printing

Link

Essentra Packaging

$226.7

Nottingham, England

3C! Packaging

No Data

Clayton, NC

9/24/20

No Data

Acquisition

Folding cartons & labels

Link

Frankston Packaging

No Data

Frankston, TX

Paco Packaging

No Data

Tyler, TX

9/17/20

No Data

Acquisition

Labels & shrink sleeves

Link

Atlas Holdings

$6,000

Greenwich, CT

LSC Communications

$3,326

Chicago, IL

9/15/20

No Data

363 Sale in Ch. 11

Book & publication printing

Link

Meyers

No Data

Minneapolis, MN

Custom Print Solutions (Div. Insignia Systems)

No Data

Minneapolis, MN

9/11/20

No Data

Acquisition

Cut & stack label printing

Link

CJK Group

No Data

Brainerd, MN

Cenveo Publisher Services (Div. Cenveo Worldwide)

No Data

Stamford, CT

9/8/20

No Data

Acquisition

Content management

Link

Paxton Media Group

No Data

Paducah, KY

Wilkes Journal-Patriot (Prop. Carter-Hubbard Publishing)

No Data

North Wilkesboro, NC

9/8/20

No Data

Acquisition

Community newspaper

Link

Schneps Media

No Data

New York, NY

Dan's Papers

No Data

Southampton, NY

9/3/20

No Data

Acquisition

Community newspaper

Link

PlanetArt

$370.0

Paris, France

CafePress (Div. Shutterfly, Port Co. Apollo)

No Data

Louisville, KY

9/1/20

No Data

Acquisition

Online promo items market

Link

2020 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

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---

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---

---

---

---

---

---

Chapter 7 Filings:

No Chapter 7 Filings Found this Month

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		2020 September - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues ($Mil )	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		News Corp - Printing facility	2021 TBD	No Data	Bronx, NY	News Corp	New York, NY	9/21/20	Consolidating print to Queens facility	Link
		LSC Communications - Printing facility	12/23/20	No Data	Kendallville, IN	LSC Communications	Chicago, IL	9/1/20	Book manufacturing	Link
		Dual Graphics	10/15/20	No Data	Brea, CA	None	N/A	Oct-20	Commercial printing	Link
		Printed Products	10/6/20	No Data	Tulsa, OK	None	N/A	Oct-20	Commercial Printing	Link

Deconsolidation of the Consolidators – October 2020 M&A Activity

November 8, 2020, 6:15 pm

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≪ Previous: CJK Goes Global as Cenveo Unwinds – September 2020 M&A Activity

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It is often accepted as a given article of business truth that a highly fragmented industry is destined to consolidate and that the result will be positive due to synergies and elimination of redundant overhead. Sometimes, that turns out to be false. 

As LSC Communications prepares to emerge from bankruptcy in a section 363 bankruptcy asset sale to private equity firm Atlas Holdings, the news broke that Alan Creel was back in the game, buying back the piece of LSC that was the backbone of the company he sold to LSC in 2017. It’s no small piece; the acquired Las Vegas printing plant includes five heatset web presses including a massive 55” wide press recently relocated there by LSC as it struggled to rationalize itself back to profitability. However, the re-purchase does not include Creel’s two acquisitions in the digital print space, Digital Lizard and GlobalSoft Digital Solutions, arguably the Creel assets that most represent the future of the printing industry. The newly reconstituted and independent Creel, with all that heavy iron, will be competing in the highly competitive segment of the commercial print industry littered with bankruptcies and plant closures as the demand for medium and long-run publications and catalogs has plummeted.

LSC Communications was born in 2016 as R.R. Donnelley (“RRD”) deconsolidated into three businesses. It was a hopeful beginning for LSC, freed from the constraints of the unwieldly behemoth that RRD had become. At the time of the split, RRD had held the top spot for decades as the largest US-based printing company. While the announcements pertaining to LSC’s strategic direction at the time were all but indecipherable, it was buried somewhere in the hoopla about supply chain management, e-services and office products, that the new company would be focused on printing catalogs, publications and books.

As soon as LSC was free from RRD, now a newly pared-down and independent corporate entity, the company began a consolidation play of its own, beginning with the acquisition of Creel Printing. The purchase of Creel included six facilities across the US and began a spree of acquisitions by LSC that seemed at first in some ways designed to recreate a new RRD. Having apparently missed the opportunity to acquire sufficient logistics capability in the spinoff from RRD, LSC shortly thereafter acquired Fairrington Transportation, a logistics company with expertise in co-mailing and co-palletization, critical capabilities needed to compete in the business of printing publications. Not wasting any time, LSC shortly thereafter purchased Publishers Press, a smaller, but still significant, player in the publication printing segment. All this within the first year of independence. LSC kept up the pace in year two, with the acquisition of three more logistic companies, including, incredibly, the print logistics business of its former brethren RRD which somehow seemed to have ended up in the wrong place in the divestiture. More acquisitions and some divestitures followed, but the bloom was off the rose as debt weighed down the company. Acquisition ceased. LSC then offered itself for sale to Quad/Graphics. Inexplicably, the US Department of Justice killed that deal, and with its options now limited, LSC entered Chapter 11 bankruptcy in April 2020. With approval of the US Bankruptcy Court, LSC will soon become a privately held portfolio company of Atlas Holdings, sans the Creel Las Vegas plant.

LSC Communications is not the only consolidator to run into trouble. We wrote last month about the unwinding and bankruptcy of Cenveo, the rebranded MailWell, one of the two more “successful” consolidators of the printing industry in the 1990’s. The other big consolidator of the ‘90s, Consolidated Graphics, was itself acquired by none other than RRD before it split itself into three. Many of those plants continue to operate within the RRD family, while others have been shuttered, including the recent closing of The Hennegan Company.

Clearly, consolidation of the printing industry will continue; some consolidators will succeed, and others, for reasons of misplaced strategy, or simply bad timing in a tumultuous market, will need to deconsolidate whether via a trip through bankruptcy court or divestitures. The question remains for printing companies in the commercial segment, how big is too big for an industry that looks like a manufacturing business but is effectively really all about service?

Packaging - Labels

In the packaging segments, consolidation appears to be more successful as roll-ups continue to march along at a steady pace. Resource Label Group added McDowell Label, located in Plano, Texas, to its stable of acquired label and flexible packaging companies. McDowell is Resource Label’s second acquisition this year, and the sixteenth overall. Atlantic Capital, the owner and financial sponsor of Resource Label since 2011, seems headed to keep on building Resource Label, already well past the five-year average hold time for private equity platforms.

Brook & Whittle, a portfolio company of Snow Phipps Group, its second private equity sponsor, is on a tear, racking up three acquisitions announced in October. The first two companies, Innovative Label Solutions and Wizard Labels, both represent investments in digital printing of pressure sensitive labels, shrink sleeves, and flexible packaging. Innovative Label serves the craft beverage, nutraceutical, food and personal care markets, where digital technologies are especially well-suited to the quick turn times and shorter run lengths required for niche products and multiple brand line extensions. Wizard Labels, co-founded by the owner of Innovative, takes digital technology one step further as an online-only custom product label printing company. Brook & Whittle wrapped up the month with one more acquisition, the purchase of specialty label print distributor Tri-Print in California. Snow Phipps is clearly committed to building out the Brook & Whittle platform, having completed two other acquisitions earlier in 2020 in the midst of the Covid-19 lockdown, buying shrink sleeve manufacturer Croydon in May, followed up shortly thereafter with the purchase of west coast Label Impressions in June. For those of us who wondered this past Spring if the M&A market for print-centric companies would go into a Covid-19 induced deep freeze, Snow Phipps proved otherwise and kept the heat on and has not let up all year.

Packaging - Corrugated

Consolidation continues apace in the corrugated box market. Green Bay Packaging, a company that appears regularly as the buyer of companies in The Target Report, expanded its footprint into the Ohio, Virginia and Kentucky markets with the acquisition of Third Dimension. The acquired company produces molded foam inserts along with custom corrugated packaging. Green Bay Packaging is deeply invested in the packaging industry and is vertically integrated with its own forest lands, sawmill, and linerboard papermaking mills.

The BoxMaker company, headquartered in Kent, Washington, acquired Tango Press in Springdale, Arkansas. Tango Press is an all-digital printer and manufacturer of corrugated packaging and displays. With flexo and digital printing capacities, The BoxMaker produces corrugated cartons and retail displays primarily serving the Pacific Northwest market. The addition of Tango represents not only a further commitment to the digital printing of corrugated products, but also a first geographic expansion far from its home base.

Direct Mail

Vision Integrated Graphics, now a portfolio company of H.I.G. Capital, added to the depth of its data-driven marketing expertise with the purchase of DX Marketing in Savannah, Georgia. This latest acquisition builds on the prior purchase last November of SourceLink, a company that brought data analytics and digital marketing capabilities to the Vision portfolio of services. As noted previously in The Target Report, H.I.G. Capital is no stranger to the printing and related industries, with investments in direct mail, grand format out-of-home graphics, promotional items, folding cartons, and production of fine papers (see The Target Report: Commercial Printing: Consolidation or Regional Expansion? – November 2019).

Qualfon, a provider of call center and business process outsourcing services, added to its investment in the printing industry with the acquisition of MAR Graphics, a printer of direct mail forms, plus lettershop and other direct mail services. Qualfon has announced that the MAR Graphic services will be integrated with its existing Dialog Direct brand of direct marketing services.

Update: The Impact of Covid-19

The financial stress caused by the outbreak of Covid-19 has clearly been mitigated by the government PPP loan and other programs. Within the print-centric segments we follow, the negative impact has been mostly limited to commercial printing companies, with many companies reporting revenue declines north of 20%, some telling us that sales were off 50% or more. Some have closed up shop, while others are just now facing the reality that they will have to shut their doors permanently. As we have noted previously, the key differentiating factor separating the survivors from the walking dead is clearly what particular industry a printing company serves and how those customers have in turn been impacted by the shut-downs. Geography also plays a part, as the shift to working remotely has removed the convenience factor offered by printing shops operating in an urban location. Other segments, in particular packaging, appear to be weathering the Covid-19 storm with minimal impact; acquisitions abound, but do not appear to be in reaction to the outbreak of the coronavirus.

The expected wave of opportunistic M&A activity, as would be indicated by bankruptcy filings, non-bankruptcy closures, and tuck-ins, has not materialized, at least not in any overwhelming sense. Nonetheless, there has begun a slow trickle of activity indicating that the impact of Covid-19 is culling out some of the weaker players in the market. The equipment of Harty Integrated Communications, a general commercial printer in New Haven, Connecticut that dates its founding back to 1900, was auctioned off in a complete plant closure by order of the company’s secured creditor.

Traxium, the erstwhile commercial printing consolidator based in Ohio, filed for Chapter 11 bankruptcy protection. In court filings, the debtor stated that its reason for filing, among others, was that the companies it acquired were extremely inefficient, and losses incurred led to missing payments to the senior secured lender. Accusations of tortious interference by one of the acquired company’s former owner, with lawsuits flying in both directions, were noted as additional causes of the bankruptcy, with the coronavirus pandemic added in as the final coup de grace. (Every company in trouble for the past six months has cited the virus as instrumental in its demise, why not?)

Notable to me was the inclusion of Great Lakes Integrated in the Traxium portfolio. Great Lakes was at one time a recognized leader in the commercial printing industry and an early adopter and proselytizer of adding fulfillment and mailing services to a printing company’s core services. Jim Schultz, the former owner of Great Lakes Integrated, was a regular speaker at the Top Management Conferences I attended some twenty years ago, sponsored by the now defunct NAPL (National Association of Printing Leadership). Jim championed his vision of Great Lakes as a marketing execution company with “value-added” services that supported the company’s printing capabilities. It would not be an exaggeration to say that through his leadership and enthusiasm, Jim changed the commercial printing industry, likely leading many others to add those services and eventually become his competition.

2020 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

Shamrock Companies

No Data

Westlake, OH

Cincinnati Print Solutions

No Data

Milford, OH

10/31/20

No Data

Acquisition (Corp Dev Assoc)

Print management

Link

The BoxMaker

No Data

Kent, WA

Tango Press

No Data

Springdale, AR

10/27/20

No Data

Acquisition

Corrugated boxes & displays

Link

Resource Label Group (Port co. First Atlantic Capital)

No Data

Memphis, TN

McDowell Label

No Data

Plano, TX

10/27/20

No Data

Acquisition

Labels & flexible packaging

Link

Vision Integrated Graphics (Port co. H.I.G. Capital)

No Data

Bolingbrook, IL

DX Marketing

No Data

Savannah, GA

10/22/20

No Data

Acquisition

Marketing agency

Link

CREEL

No Data

Las Vegas, NV

Creel Printing (Div. LSC Communications)

No Data

Las Vegas, NV

10/20/20

No Data

363 Sale in Ch. 11

Commercial printing

Link

Brook & Whittle (Port co. Snow Phipps Group)

No Data

North Branford, CT

Tri-Print

No Data

Huntington Beach, CA

10/20/20

No Data

Acquisition

Print distributor

Link

Minuteman Press Buffalo

No Data

Buffalo, NY

Minuteman Press Williamstown

No Data

Williamstown, NY

10/8/20

No Data

Acquisition

Printing & copying

Link

Qualfon

No Data

Highland Park, MI

MAR Graphics

No Data

Valmeyer, IL

10/8/20

No Data

Acquisition

Direct mail printing

Link

Brook & Whittle (Port co. Snow Phipps Group)

No Data

North Branford, CT

Innovative Labeling Solutions

No Data

Hamilton, OH

10/8/20

No Data

Acquisition

Digital label printing

Link

Brook & Whittle (Port co. Snow Phipps Group)

No Data

North Branford, CT

Wizard Labels

No Data

Golden, CO

10/8/20

No Data

Acquisition

Digital label printing online

Link

Fastsigns International (Port co. LightBay Capital)

No Data

Carrollton, TX

NerdsToGo

No Data

Guilford, CT

10/7/20

No Data

Acquisition

IT Services Franchisor

Link

North Equity

No Data

San Francisco, CA

Popular Science, Field & Stream (Prop. Bonnier Corp.)

No Data

Stockholm, Sweden

10/6/20

No Data

Acquisition

Consumer publications

Link

Core Industrial

No Data

Chicago, IL

TCG Legacy

No Data

Garner, NC

10/6/20

No Data

Acquisition

Commercial printing

Link

Durst

No Data

Brixen, Italy

Vanguard Digital Printing Systems

No Data

Lawrenceville, GA

10/5/20

No Data

Acquisition

Wide format printers

Link

Cimpress

$2,430

Dundalk, Ireland

99designs

No Data

Melbourne, Australia

10/5/20

No Data

Acquisition

Graphic design network

Link

Saothair Capital Partners

No Data

Radnor, PA

Arandell Corp

$103.0

Menomonee Falls, WI

10/2/20

$31.3

363 Sale in Ch. 11

Catalog printing

Link

Green Bay Packaging

No Data

Green Bay, WI

Third Dimension

No Data

Geneva, OH

10/1/20

No Data

Acquisition

Corrugated boxes & displays

Link

Flint Group (Port co. Goldman Sachs/Koch)

$2,300

Luxembourg

Poteet Printing Systems

No Data

Charlotte, NC

10/1/20

No Data

Acquisition

Flexographic inks

Link

2020 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:

Traxium, LLC

10/16/20

No Data

20-51888

Stow, OH

6th

Northern OH Akron

Alan M. Koschik

Peter G. Tsarnas

Commercial printing

Chapter 7 Filings:

Fitzpatrick Container Company

10/19/20

No Data

20-04139

Allentown, PA

3rd

Eastern PA Reading

Patricia M. Mayer

Pro Se

Corrugated boxes

Team One Display Services, Inc.

10/19/20

No Data

20-70876

Kennesaw, GA

11th

Northern GA Atlanta

Barbara Ellis-Monro

J. Hayden Kepner, Jr.

Trade show displays

310 Publishing, LLC

10/29/20

No Data

20-03164

Harrisburg, PA

3rd

Middle PA Wilkes-Barre

Henry W. Van Eck

Tracy Lynn Updike

Specialty publishing

		2020 October - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues ($Mil )	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		Philadelphia Inquirer - Printing facility	Dec-20	No Data	Conshohocken, PA	The Philadelphia Inquirer	Philadelphia, PA	10/9/20	Outsourcing print to NJ Gannett plant	Link
		Harty Integrated Communications	10/27/20	No Data	New Haven, CT	None	N/A	Oct-20	Commercial printing	Link
		H&H Bindery	12/9/20	No Data	Houston, TX	None	N/A	Oct-20	Bindery services	Link

Dystopia, Social Justice & Steamy Romance – November 2020 M&A Activity

December 7, 2020, 7:49 pm

≫ Next: Bags, Pouches, Trays & Bowls – December 2020 M&A Activity

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The statistics are clear: people around the world are reading more during this time of pandemic-induced lockdown, social distancing, and free time. What better way to spend some enjoyable moments than to pick up that dog-eared copy of The Plague by Albert Camus that’s been sitting for years on your college bookshelf. Tired of being alone and feel cooped up? For company, sit back and read A Gentleman in Moscow, the current bestseller about an aristocrat who lives out his life confined to a tiny attic room in the grand Moscow Metropol hotel after the Bolsheviks remove him from his luxurious suite and threaten him with arrest and banishment to the gulag if he ever leaves the building. At a loss to understand the people marching in the streets arm-in-arm this summer? Buckle up and dig into How to Be An Antiracist. Seeking steamy romance? Well, let’s just say that’s not my cup of tea when it comes to reading habits, so you choose.

Bertelsmann, the giant German media and publishing company, announced that it has emerged the winner in the bidding for Simon & Schuster, a division of ViacomCBS. Bertelsmann reportedly was the clear frontrunner out of more than half a dozen initially interested buyers, with the final bid winning out over second place News Corp, owner of publisher HarperCollins. Bertelsmann confidently stated that it will finance the $2.175 billion deal out of existing cash reserves due to its positive business results this year. You might say that the publishing business has been good to Bertelsmann of late.

ViacomCBS put the publishing entity on the block as part of its strategic plan to divest non-core assets and increase investment in content and streaming platforms. The cash deal unquestionably also helps ViacomCBS shed some of its current $19.7 billion debt load. However, by selling off the profitable Simon & Schuster publishing unit, ViacomCBS is losing control of blockbuster titles and content from the likes of Stephen King, Dan Brown, Bob Woodward, Hillary Clinton, Doris Kearns Goodwin and Walter Isaacson, among many others.

Simon & Schuster is one of the remaining “big five” book publishers. According to some in the publishing industry, the deal, if approved by regulators, will give Bertelsmann approximately a 50% share of the books published for the general reading public. Apparently using a different definition of the publishing industry, the CEO of Bertelsmann claimed that the merged entity would have less than 20% of the US market and he expected that the deal would be approved by the regulatory authorities. Several industry groups have already called for the US Department of Justice (and the Canadian Competition Bureau) to block the deal on the grounds that the combination will reduce competition between book publishers vying for authors’ work, and drive down the value of advances offered.

Loudest of all the protesters to the deal was the CEO of News Corp who blasted the proposed sale as anticompetitive, creating a “literary leviathan controlling 70% of the US literary and general fiction market.” Regardless of how the relative share of the publishing market is ultimately defined, it will certainly be interesting to see if our Justice Department is as worried about a dominant position in the ownership of book publishing and distribution, as it was over the printing of magazines (see The Target Report: Buyers are On The Move and On Track – July 2020).

Bertelsmann acted earlier this year to consolidate the book publishing industry when, in April, the company purchased the portion of Penguin Random House it did not already own (see The Target Report: The Penguin’s Native Tongue is Now German – December 2019). Not including the pending purchase of Simon & Schuster, Penguin Random House consists of more than 300 brands, or “imprints” as they are known in the publishing industry, including the Crown imprint which published Michele Obama’s book in 2018 and the recently released book by Barack Obama.

To make sure it can print all those books, Berryville Graphics, a manufacturing division of Bertelsmann, announced the acquisition of Quad’s book manufacturing operations in Fairfield, Pennsylvania and Martinsburg, West Virginia. When the dust settles, the printing and binding of books in the US will have undergone a major ownership reshuffling. Quad is now effectively out of book manufacturing, instead focusing on its “Quad 3.0 Transformation” strategy to become an integrated marketing solutions provider. Meanwhile, LSC Communications, which has shed non-core assets in its bankruptcy proceeding, but held onto its book manufacturing capabilities, is now owned by private equity firm Atlas Holdings. Not to be ignored, CJK Group picked up other pieces of the US book manufacturing capacity jettisoned by Quad, and more recently acquired publishing software assets to support its largely book-centered roll-up of printing companies.

It remains to be seen if the surge in demand for books will outlast the pandemic. In the meantime, reports are that sales of printed books are up. However, due to the shake up in the market and years of consolidation and plant closures among book manufacturers, the remaining book manufacturing companies cannot keep up with demand. (When was the last time you heard that in the printing business?) As a consequence, some publishers have had to delay release dates, pushing new titles out past the 2020 holiday shopping season.

The demand for digital books, which seemed to have hit a plateau before Covid-19 hit, is also surging, consistent with the digital acceleration in most aspects of our pandemic lives. Nonetheless, print remains the dominate form when readers want to hunker down and cozy up to a good story about dystopian worlds, social justice and, ahem, you know, steamy romance…

Packaging - Labels

Consolidation is rolling along at a steady pace in the label business. I.D. Images, a national roll-up of label manufacturers focused solely on serving customers exclusively through print distributors, acquired Pointil Systems. The acquired company, based in Portland, Oregon, specializes in variable information labels used in a variety of industries ranging from forest products, food, agricultural products, to medical. These industries use the variable data labels, including barcodes, to track inventory and manage logistics throughout their supply chains.

Evergreene Tag & Label, located in Birmingham, Alabama, acquired Dixie Labels and Systems in the Chattanooga, Tennessee region. Evergreene, a producer of labels for food and beverage, home goods, as well as industrial printing of nameplates and chemical-resistant product labels, announced that it plans to maintain production at Dixie Labels’ location. The acquired company serves similar markets and brings expertise in printing labels for the rug and flooring industries.

CCL, the Canadian-based, global roll-up of label companies, has purchased Super Enterprises Printing in Kuala Lumpur, Malaysia. The acquired company produces industrial printing products including decorative panels, liquid crystal and touch screen display covers, and in-mold components for consumer electronics and automotive suppliers. Once again, CCL, given its size ($3.95 billion US), is surprisingly willing and able to purchase relatively small companies. Super Enterprises reported trailing twelve month sales of $20.2 million. CCL paid $15.3 million, 6.7 times the adjusted EBITDA of $2.3 million. Maybe it should not be a surprise, as CCL consistently pursues specialized companies in the label industry, regardless of size (see The Target Report: Sticky Discipline for the Label Business – May 2016).

Commercial Printing and Diversified Services

Graphiscan, a commercial printing company based in Montreal, Quebec, has acquired Quadriscan, also based in Montreal. Graphiscan now has three locations, all located in the Quebec province.

Graphic Village, the roll-up portfolio company of Revitalize Capital based in Cincinnati, Ohio, announced another deal, right in line with the company’s strategy of building out a multi-prong diversified graphic services provider in the region. In this latest deal, a tuck-in, Graphic Village has acquired Advance Printing, formerly also a Cincinnati company.

   

2020 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

Bertelsmann

$20,200

Gütersloh, Germany

Simon & Schuster (Div. ViacomCBS)

$814.0

New York, NY

11/25/20

$2,175

Acquisition

Book publishing

Link

Howard Custom Transfers

No Data

Elgin, IL

M&M Designs

No Data

Huntsville, TX

11/23/20

No Data

Acquisition

Transfer printing

Link

LBS

No Data

Des Moines, IA

Gane Brothers & Lane

No Data

Elk Grove Village, IL

11/19/20

No Data

Acquisition

Bookbinding supplies

Link

Carpenter Newsmedia (Affil. Boone Newspapers)

No Data

Natchez, MS

American Press (+1 title) (Prop. Shearman)

No Data

Lake Charles, LA

11/19/20

No Data

Acquisition

Community newspapers

Link

EverGreene Tag & Label

No Data

Birmingham, AL

Dixie Labels and Systems

No Data

Ooltewah, TN

11/18/20

No Data

Acquisition

Label printing

Link

Minuteman Press South Hills

No Data

Dormant, PA

Greentree Printing & Sign

No Data

Pittsburgh, PA

11/16/20

No Data

Acquisition

Printing & copying

Link

Graphic Village (Port co. Revitalize Capital)

$22.0

Cincinnati, OH

Advance Printing

No Data

Cincinnati, OH

11/16/20

No Data

Acquisition

Commercial printing

Link

CCL Industries

$3,948

Toronto, ON

Super Enterprises Printing

$20.2

Kuala Lumpur, Malaysia

11/9/20

$15.3

Acquisition

Industrial printing

Link

Adobe

$12,440

San Jose, CA

Workfront

No Data

Lehi, UT

11/9/20

$1,500

Acquisition

Workflow management

Link

Pregis (Port co. Warburg Pincus)

No Data

Deerfield, IL

Technical Machinery Solutions (Div. Graphic Innovators)

No Data

Elk Grove Village, IL

11/5/20

No Data

Acquisition

Paper mailers

Link

I.D. Images

No Data

Brunswick, OH

Pointil Systems

No Data

Portland, OR

11/5/20

No Data

Acquisition

Variable information labels

Link

Transom Capital Group

No Data

Los Angeles, CA

BridgeTower Media (Div. Gannett)

No Data

Minneapolis, MN

11/3/20

No Data

Acquisition

Specialty B2B Publisher

Link

Graphiscan

No Data

Alma, QC

Quadriscan

$10.7

Montreal, QC

11/2/20

No Data

Acquisition

Commercial printing

Link

Berryville Graphics (Div. Bertelsmann Printing)

No Data

Berryville, VA

Book manufacturing operations (Div. Quad)

No Data

Fairfield, PA Martinsburg, WV

11/2/20

No Data

Acquisition

Book manufacturing

Link

Specialized Office Systems

No Data

Phoenix, AZ

Logo Expressions

No Data

Carlsbad, CA

11/1/20

No Data

Acquisition (Corp Dev Assoc)

Promotional distributor

Link

   

2020 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:

No Chapter 11 Filings Found this Month

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Chapter 7 Filings:

The Beacon Journal Publishing Company dba The Akron Beacon Journal

11/4/20

No Data

20-51999

Akron, OH

6th

Northern OH Akron

Alan M. Koschik

Marc Merklin

Community newspaper

     

   

		2020 November - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues ($Mil )	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		Kansas City Star - Printing Facility	Q1 2021	No Data	Kansas City, MO	Chatham Asset Management	Chatham, NJ	11/10/20	Outsourcing print to Gannett	Link

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Bags, Pouches, Trays & Bowls – December 2020 M&A Activity

January 7, 2021, 8:26 pm

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Flexible packaging is arguably the hottest segment in the printing and related industries, at least in terms of valuation multiples paid. Enter the old-fashioned brown paper bag, the target of ProAmpac, one of the most aggressive roll-ups in the flexible packaging business. ProAmpac announced the acquisition of Rosenbloom Groupe, a privately-owned company based in Montreal, Quebec. The company manufacturers bags: plain brown bags, printed branded grocery bags, bread bags, grease-resistant bags for French fries and donuts, fast-food take-out bags, and wine bottle bags. Nothing fancy here, just millions and millions of unpretentious bags.

The brown paper folded bag. It is a simple device, stacks neatly, opens easily, and stands up on its own for easy loading. The original machine-made paper bags were flat affairs produced on a machine invented in 1852 by a schoolteacher. He patented his device and left the teaching profession to found the Union Bag and Paper Company, predecessor of pulp and paper company Union Camp, which eventually was folded into International Paper.

It took a young mechanically-minded woman, Margaret “Mattie” Knight, to come up with the next significant improvement that led to the ubiquitous flat-bottom grocery bag. Mattie was working in a paper bag factory and true to her inventive nature, she was constantly on the lookout for how to create improvements to the devices on which she was assigned. (While still in her teens, she had invented a safety device for a knitting loom at the cotton mill where her brother worked). Her inventiveness led to the design of the first machine able to automatically fold and glue a flat-bottom bag, a much more useful product that became known as the “Self-Opening Sack.” Knight built a wooden model of her invention (pictured above) but needed an iron model before she could apply for a patent. A machinist working in the shop where the model was built stole her ideas and beat her to the patent office. Confronted with his theft, the usurper defended his position by asserting that as a woman Knight “could not possibly understand the mechanical complexities of the machine.” Fortunately for Knight, she kept detailed diary entries, drawings and full documentation of her invention. She pursued her rights and prevailed in court, won the rights to the patent in 1871, and with a business partner proceeded to co-found the Eastern Paper Bag Co. Mattie Knight is widely recognized as the first woman to receive a U.S. patent in her own name, one of 89 patents she eventually successfully filed.

ProAmpac’s acquisition of the Rosenbloom Groupe includes the Hymopack subsidiary which manufactures plastic bags and can liners, and Dyne-a-Pak which manufactures polystyrene foam trays used in food packaging applications. The acquisition of the Rosenbloom Groupe is the latest in a long list of acquisitions by ProAmpac, with financial backing by Pritzker Private Capital, its second private equity sponsor (see The Target Report: Moving Pieces Around on the PE Chessboard – October 2016).

PPC Flexible Packaging, a portfolio company of Morgan Stanley Capital Partners, also bagged a target in the bag segment, with the acquisition of Custom Poly Bag. The acquired company, located in Alliance, Ohio, is a wide-web flexographic printer and converter of flexible films, bags, and pouches. The company has in-house extrusion capabilities to make its own films. The company’s products are used to package baked goods and other foods, as well as printed plastic shopping bags adorned with full-color advertising. 

Morgan Stanley Capital Partners also announced the acquisition of PE-backed roll-up platform, AWT Labels & Packaging, formerly funded by Mason Wells. AWT, headquartered in Minneapolis, operates three facilities, and is mostly focused on label printing and converting, with some flexible packaging. Morgan Stanley Capital Partners has not announced plans to combine AWT with PPC Flexible Packaging, presumably establishing AWT as their second platform focused on packaging.

Spartec, a portfolio company of Nautic Partners, acquired Tufpak in Ossipee, New Hampshire. Spartec primarily produces a wide range of plastic films and plastic materials used in packaging applications. The acquired company produces specialty bags to contain and dispose of hazardous materials and medical waste.

May River Capital, a Chicago private equity fund, acquired PaperTech, an Ohio-based manufacturer of paperboard packaging products. The company makes over half a billion paper trays annually for bakeries, fast-food restaurants, food service operations, and frozen food producers.

Commercial Printing and Diversified Services

Alcom, a privately-owned commercial printing and diversified marketing service company, acquired Christmas City Printing. Fittingly, the acquisition was announced just in time for the Christmas holiday, with plans to keep the Bethlehem facility operating as satellite operation of the main facility in Harleysville, Pennsylvania, about an hour away. A serial acquirer of companies located in southeast Pennsylvania, Alcom joins the ranks of the commercial printing firms that have been executing regional multi-plant strategies. In this pared-down version of the consolidation wave of yore, a financially strong company with an established operational base expands its reach with strategic acquisitions that share resources across a platform of companies all within a reasonable distance of travel (see The Target Report: Commercial Printing: Consolidation or Regional Expansion? – November 2019).

Lithtex NW in Bellingham, Washington, was acquired by Northwest Center Services, a non-profit corporation and unlikely buyer of a commercial printing company. Northwest Center was founded in 1965 by a group of Seattle parents that were determined that their children with disabilities, who were rejected from public schools, be included in the public school system, and were entitled to an appropriate education. Successful in their efforts to have legislation enacted in Washington State, the parents subsequently helped draft a national version and were instrumental in support for The Education for All Handicapped Children Act, which became law in 1975. Northwest Center now owns and operates six businesses as “social enterprises” that employ disabled people as an integral component of their corporate mission. The businesses include a chain of thrift shops, janitorial and cleaning services, a laundry servicing hospitals and hotels, and now, a commercial printing company.

Publishing Resurrection

Basketball player turned multi-millionaire franchise owner Ulysses “Junior” Bridgeman has emerged as the winner for the remaining assets of Ebony and Jet in the 363 sale under supervision of the US Bankruptcy Court in Houston. In an unusual move, the company was converted to a voluntary Chapter 11 reorganization in September, after initially being forced into a Chapter 7 liquidation bankruptcy proceeding by its creditors in July. The conversion to Chapter 11 set up the company for an orderly and public bidding process and eventual emergence from bankruptcy. The sale to Bridgeman does not include the magazine’s extensive and historic photo archive, which had been previously sold for $30 million to a group of philanthropic foundations that then donated the photo archive to the Smithsonian National Museum of African American History and Culture (see The Target Report: Buyers are On The Move and On Track – July 2020). Bridgeman paid $14 million for the residual assets and has announced that while Ebony will primarily be a digital publication, the plan includes occasional special print editions.

In another pending resurrection of a print title, Street Media has acquired The Village Voice from its former publisher. The Voice was a mainstay independent hard left-leaning weekly newspaper that began publication in 1955 with offbeat and irreverent articles, often national in scope, but centered around New York City politics, culture, and entertainment. The Voice reported on the cultural movements in New York starting with the 1950’s beatnik generation, and spanning the hippie movement, disco, punk, the club scene, grunge, hip-hop and the post 911 NYC urban comeback. Co-founded by famed but controversial author Norman Mailer, the Voice ceased print publication in September 2017 (with Bob Dylan on the cover of the final print edition). Original reporting and cultural coverage ceased in 2018. Brian Calle, the owner of Street Media, which publishes LA Weekly, a west-coast alternative newspaper, has announced that the Voice’s website will go live in early 2021 and his plan is to publish a “comeback” print version later this year, with quarterly print editions to follow.

   

2020 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

MediaNews Group (Port co. Alden Global Capital)

No Data

Denver, CO

Tribune Publishing

No Data

Chicago, IL

12/31/20

No Data

Acquisition

Metro newspaper

Link

Ennis

$374.8

Midlothian, TX

InfoSeal

No Data

Roanoke, VA

12/29/20

No Data

Acquisition

Business forms

Link

Bridgeman Sports and Media

No Data

Louisville, KY

Ebony & Jet Magazines

$0.0

Houston, TX

12/24/20

$14.0

363 Sale in Ch. 11

Magazine publishing

Link

Street Media

No Data

Los Angeles, CA

The Village Voice

$0.0

New York, NY

12/22/20

No Data

Acquisition

Magazine publishing

Link

BlueCrest

No Data

Danbury, CT

BCC Software (Port co. Thompson Street Capital)

No Data

Rochester, NY

12/22/20

No Data

Acquisition

Mail processing software

Link

Morgan Stanley Capital Partners

No Data

New York, NY

AWT Labels & Packaging (Port co. Mason Wells)

No Data

Minneapolis, MN

12/18/20

No Data

Acquisition

Labels & flexible packaging

Link

Clint Reilly Communications

No Data

San Francisco, CA

San Francisco Examiner (Prop. Black Press Ltd)

No Data

San Francisco, CA

12/18/20

No Data

Acquisition (Dirks, Van Essen)

Metro newspaper

Link

O'Rourke Media Group

No Data

Kiel, WI

RiverTown MultiMedia (Prop. Forum Communications)

No Data

Red Wing, MN

12/18/20

No Data

Acquisition

Community newspapers

Link

manroland Goss (Port co. American Ind. Partners)

No Data

Augsburg, Germany

Thallo web offset business (Div. Contiweb, Port Co. H2 Equity)

No Data

Boxmeer, Netherlands

12/17/20

No Data

Acquisition

Web printing presses

Link

Bobst Group

$1,977

Mex, Switzerland

Mouvent

No Data

Solothurn, Switzerland

12/17/20

No Data

Purchase of outstanding shares

Digital label & fabric printers

Link

Northwest Center Services

No Data

Renton, WA

Lithtex NW

No Data

Bellingham, WA

12/17/20

No Data

Acquisition

Commercial printing

Link

Graphic Dimensions

No Data

Austell, GA

SpeedFlo Business Forms

No Data

Lexington, KY

12/17/20

No Data

Asset Acquisition

Business forms

Link

Usio

$30.4

San Antonio, TX

Information Management Systems

$13.0

San Antonio, TX

12/16/20

$5.9

Acquisition

Transactional print & services

Link

OpenGate Capital

No Data

Los Angeles, CA

Kongsberg business (Div. Esko)

No Data

Kongsberg, Norway

12/15/20

No Data

Acquisition

Digital cutting systems

Link

Langley Holdings

$991.0

Nottinghamshire, UK

Printing chemicals business (Div. Heidelberg)

No Data

Kruibeke, Belgium

12/11/20

$24.8

Acquisition

Printing chemicals

Link

Resource Label Group (Port co. First Atlantic Capital)

No Data

Memphis, TN

Labels West

No Data

Woodinville, WA

12/10/20

No Data

Acquisition

Label printing

Link

Global Graphics

$30.0

Cambridge, UK

Hybrid Software (Div. Congra Holdings)

No Data

Merelbeke, Belgium

12/10/20

$96.7

Acquisition

Packaging workflow software

Link

Fortis Solutions Group (Port co. Main Post Partners)

No Data

Virginia Beach, VA

Kala Packaging

No Data

Orem, UT

12/10/20

No Data

Acquisition

Labels & flexible packaging

Link

May River Capital

No Data

Chicago, IL

PaperTech

No Data

Findley, OH

12/8/20

No Data

Acquisition

Paperboard trays & bowls

Link

Vault Promotions

No Data

Hendersonville, PA

Gateway Marketing Concepts

No Data

San Diego, CA

12/8/20

No Data

Acquisition

Badges & Nameplates

Link

Alcom

No Data

Harleysville, PA

Christmas City Printing

No Data

Bethlehem, PA

12/8/20

No Data

Acquisition

Commercial printing

Link

Spartec (Port co. Nautic Partners)

No Data

St. Louis, MO

Tufpak

No Data

Ossipee, NH

12/3/20

No Data

Acquisition

Films & bag manufacturing

Link

International Paper

$20,840

Memphis, TN

Printing papers business

$4,000

Memphis, TN

12/3/20

No Data

Divestiture

Printing paper mills

Link

PPC Flexible Packaging (Port co Morgan Stanley Capital)

No Data

Buffalo Grove, IL

Custom Poly Bag

No Data

Alliance, OH

12/1/20

No Data

Acquisition

Bag manufacturing

Link

ProAmpac (Port co. Pritzker Partners)

No Data

Cincinnati, OH

Rosenbloom Groupe

No Data

Montreal, QC

12/1/20

No Data

Acquisition

Bag manufacturing

Link

   

2020 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

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Chapter 7 Filings:

Avsec Printing, Inc.

12/10/20

No Data

20-21347

Joliet, IL

7th

Northern IL Chicago

LaShonda A. Hunt

Thomas W. Toolis

Commercial printing

Falcon Press, LLC

12/2/20

No Data

20-05281

Nashville, TN

6th

Middle TN Nashville

Charles M. Walker

Thomas Edmondson

Commercial printing

   

		2020 December - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues ($Mil )	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		Southern Post	1/21/21	No Data	Nashville, TN	None	N/A	Dec-20	Mailing & fulfillment services	Link
		Batson Printing	1/13/21	No Data	Benton Harbor, MI	SPC	Niles, IL	Dec-20	Book & manuals printing	Link
		Blanks	12/16/20	No Data	Minneapolis, MN	None	N/A	12/3/20	Pre-die cut paper products	Link

As Goes the Industry, so Goes the Trade Associations – January 2021 M&A Activity

February 7, 2021, 8:30 pm

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≪ Previous: Bags, Pouches, Trays & Bowls – December 2020 M&A Activity

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It finally happened. PIA and NAPL have joined forces, or at least the remnants of each will now be together under the umbrella of Printing United Alliance. It has been a long and winding road for the two venerable and influential trade associations that served the commercial offset printing industry for a combined 215 years. Unable to figure out on their own how to combine, it took the SGIA, with its roots firmly planted in the screen printing industry, to bring it all together with the announcement that it was merging with Idealliance. Through a rather convoluted series of mergers and rebranded identities, some of which never gained traction with members, Idealliance contains the last remnants of the NAPL organization. The PIA, which managed to maintain its identity longer than the NAPL, finally folded into the SGIA last Spring, with the new combined organization emerging as Printing United Alliance.

PIA and NAPL had similar missions, both dedicated to serving the fragmented printing industry. Each organization had highly respected economic research services. They both had very successful and well attended annual conferences that catered to the owners of the many independently owned and operated companies that make up the commercial printing industry. Both associations sponsored multiple industry-specific social events that encouraged and enabled relationships throughout the industry and across the country. Many of those relationships endure to this day.

As the commercial printing industry shrank in size and number of establishments, the logic of consolidation between PIA and NAPL was compelling, but there were fundamental differences that made joining together problematic. NAPL was a singular national organization, while PIA was a confederation of local chapters each with its own structure and membership. The two sides tried to put themselves together in 2012, but despite the common sense that the industry did not need two competing associations, the inertia behind each side’s position was too strong and the talks ended without the desired outcome.

I doubt that anyone would have predicted ten years ago that the eventual consolidator of all these printing industry associations would have emerged out of the humble screen printing segment that lacked the trappings of big presses and highly mechanized production. Something changed; the digital technologies that have rocked the printing industry have nowhere been more transformative than how we apply graphics to wide format and irregularly shaped substrates. The resultant growth and excitement surrounding that transformation, among other factors, propelled the SGIA to the leadership position it now enjoys as the survivor and master consolidator of industry trade associations.

Flexible Packaging & Bags

A new PE-backed platform has entered the fray in the flexible packaging business, arguably the hottest M&A segment in the printing industry, with purchase price multiples reportedly often in the double digits. Private equity powerhouse H.I.G. Capital completed two simultaneous acquisitions with the purchase of Action Packaging and Signature Flexible Packaging, both located in Southern California. The new platform starts out with three manufacturing facilities and serves makers of consumer products, primarily snacks, meats, candies, and baked goods. The clearly articulated growth plan is focused on additional M&A to build out this new platform. H.I.G. Capital is no stranger to the printing industry, with multiple investments in direct mail and marketing (Vision Integrated Graphics), out-of-home and décor graphics (Circle Graphics), and personalized digital printing (Digital Room) (see Commercial Printing: Consolidation or Regional Expansion? – November 2019).

ProAmpac, the flexible packaging roll-up backed by Pritzker Partners, which last month expanded its portfolio into the paper bag manufacturing business, is again adding to the strength of its bag offerings with the acquisition of Rapid Action Packaging. The stage is set for competition to heat up in the specialty bag business which often services similar markets and customers as those catered to in the sizzling flexible packaging segment. (see Bags, Pouches, Trays & Bowls – December 2020).

Safety Labels & Signs

Sometimes there are printed products that exist in the shadows of the industry and suddenly there will be a spate of acquisitions that bring focus to the sector. Presco Polymers, a portfolio company of River Associates, manufactures safety marking and damage prevention products, such as printed tapes, flags, and tracer wires for identifying and finding hazardous conditions. Presco announced the acquisition of William Frick & Company, a printer of labels, tags, product identification and other marking products, often used in harsh and hazardous environments.

Three days later, Justrite, a manufacturer of storage and biohazard cans, spill control and other safety products, acquired National Marker Company. The acquired company is a printer and manufacturer of signs, tags, labels, and other products all geared to identify safety hazards and assist customers with compliance.

Wide Format Printing

Circle Graphics, a portfolio company of the aforementioned H.I.G. Capital, acquired Graphik Dimensions, a wide format printing company in High Point, North Carolina. The acquired company is a provider of customized printed and framed wall décor products, sold through online channel partners and other commercial customers. The acquisition fits nicely into Circle Graphics existing business that produces custom in-home décor products, which is in addition to its better known industry-leading position in outdoor billboard graphics.

BluEdge, a multi-location graphics company headquartered in New Jersey, acquired Vernon Display Graphics, a wide format printing company that uses both digital and traditional screen printing to produce signage, retail displays, and vehicle graphics. BluEdge is family-owned and traces its roots back to 1898 when it was known as National Blueprint. Similar to other reprographic companies that produced blueprints, essentially a simple form of wide format graphics, BluEdge has made the natural transition to digital wide format technologies.

     

2021 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

DNI

No Data

Nashville, TN

Mailer's Choice

No Data

Nashville, TN

1/27/21

No Data

Acquisition (Corp Dev Assoc)

Mailing & fulfillment services

Link

North Equity

No Data

San Francisco, CA

Domino Media (Prop. Multiply Media)

No Data

Westport, CT

1/27/21

No Data

Acquisition

Consumer publications

Link

Mittera Group

$253.5

Des Moines, IA

Trend Offset Printing

$375.0

Los Alamitos, CA

1/25/21

No Data

Acquisition (New Direction)

Magazine & catalog printing

Link

Justrite (Port co Audax Private Equity)

No Data

Boston, MA

National Marker Company

No Data

North Smithfield, RI

1/22/21

No Data

Acquisition

Safety label & sign printing

Link

Presco Polymers (Port co River Associates)

No Data

Sherman, TX

William Frick & Company

No Data

Libertyville, IL

1/19/21

No Data

Acquisition

Safety label & sign printing

Link

Printing United Alliance

No Data

Fairfax, VA

Idealliance

No Data

Alexandria, VA

1/19/21

No Data

Merger

Trade association

Link

Kristi Dannelley

No Data

Little Rock, AR

Magna IV

No Data

Little Rock, AR

1/19/21

No Data

Purchase of Majority Interest

Commercial printing

Link

Loftware (Port co. Riverside Partners)

No Data

Portsmouth, NH

NiceLabel

No Data

Sencur, Slovenia

1/12/21

No Data

Acquisition

Label design & MIS software

Link

Smart Source

No Data

Suwanee, GA

Grandflow

No Data

Livermore, CA

1/12/21

No Data

Acquisition (Corp Dev Assoc)

Print management services

Link

ProAmpac (Port co. Pritzker Partners)

No Data

Cincinnati, OH

Rapid Action Packaging (Port co. Ludgate)

No Data

Wimbledon, UK

1/11/21

No Data

Acquisition

Paper bags & boxes

Link

BluEdge

No Data

New York, NY

Vernon Display Graphics

No Data

Carlstadt, NJ

1/7/21

No Data

Acquisition

Wide format printing

Link

Circle Graphics (Port Co. H.I.G. Capital)

No Data

Longmont, CO

Graphik Dimensions

No Data

High Point, NC

1/6/21

No Data

Acquisition

Décor printing & framing

Link

H.I.G. Capital

No Data

Miami, FL

Action Packaging

No Data

City of Industry, CA

1/5/21

No Data

Acquisition

Flexible packaging films & bags

Link

H.I.G. Capital

No Data

Miami, FL

Signature Flexible Packaging

No Data

Commerce, CA

1/5/21

No Data

Acquisition

Flexible packaging

Link

Moore

$700.0

Tulsa, OK

Amergent

No Data

Peabody, MA

1/5/21

No Data

Acquisition

Direct marketing data analytics

Link

BR Printers

$18.9

San Jose, CA

National Graphic Solutions

No Data

Appleton, WI

1/5/21

No Data

Acquisition (New Direction)

Book manufacturing

Link

Mondi Group

$8,747

Addlestone, UK

Olmuksan International Paper (Div. International Paper)

$180.5 ($20,840)

Memphis, TN

1/5/21

$79.4

Acquisition

Corrugated packaging

Link

Modern Litho

No Data

Jefferson City, MO

James Mulligan Printing

No Data

St. Louis, MO

1/4/21

No Data

Acquisition

Commercial printing

Link

Avery Dennison

$6,750

Glendale, CA

ACPO Port co. Esperia Holdings

No Data

Oak Harbor, OH

1/4/21

$87.6

Acquisition

Label laminate products

Link

2021 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:

American Achievement Corporation (Inc. Taylor Publishing Manufacturing)

1/14/21

No Data

21-30058

Dallas, TX

5th

Northern Texas Dallas

Harlin DeWayne Hale

Paul M. Basta

School yearbook publishing

Chapter 7 Filings:

Printchaps, Inc.

1/7/21

No Data

21-40032

Murphy, TX

5th

Eastern TX Plano

Brenda T. Rhoades

Gregory W. Mitchell

Printing & copying

   

		2021 January - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues ($Mil )	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		LSC Communications - Printing facility	2/18/21	No Data	Spartanburg, SC	LSC Communications	Warrenville, IL	1/25/21	Magazine & catalog printing	Link
		McKella 280	1/19/21	No Data	Pennsauken, NJ	None	N/A	Jan-21	Commercial printing	Link
		Quad/Graphics - Printing facilities	Jan-21	No Data	Oklahoma City, OK	Quad Graphics	Sussex, WI	Jan-21	Magazine, catalog & retail circular printing	Link
		Quad/Graphics - Printing facilities	Mar-21	No Data	Fernley, NV	Quad Graphics	Sussex, WI	Jan-21	Retail circular printing (Formerly Worldcolor printing facility)	Link
		Quad/Graphics - Printing facilities	Apr-21	No Data	Nashville, TN	Quad Graphics	Sussex, WI	Jan-21	Retail circular printing	Link
		Falcon Press	Jan-21	No Data	Nashville, TN	None	N/A	Jan-21	Commercial printing	Link
		Hampden Papers	2/25/21	No Data	Holyoke, MA	LLFlex (Port co. Centre Lane Partners)	High Point, NC	Jan-21	Paper converting	Link

So Many Books, So Little Time* – February 2021 M&A Activity

March 7, 2021, 3:38 pm

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"Idiom" Book Sculpture, Prague City Library

Books endure. We discard newspapers the day after, magazines stick around a bit longer, junk mail not at all, but books we keep. After we read a book, we shelve them, we show off our book collection as backdrops in our Zoom calls, we stack books in corners, we store them in boxes, we might drop them off at a used bookstore, we might even make books into works of art, but we almost never just toss them out. Printed books endure.

Book printing company Grafica Veneta, located in the Italian province of Padua, a half hour drive from the causeway to Venice, announced the acquisition of a majority ownership stake in Lake Book Manufacturing. The acquired company is close by Chicago’s O’Hare airport, likely an enabling factor in the decision by an Italian book manufacturer to invest in a US-based partner. The owner of Lake Book, Dan Genovese, noted that his family’s Italian heritage also played a part in the decision to seek and accept an international investment in the company, especially one based in Italy. Both companies are positioned to manufacture a wide range of book products for the publishing trade, with capabilities ranging from one-color to full-color text, paperback and hardcover editions, along with fully decorated book jackets. The international connection and reach can be a key factor when printing books for the big publishing houses, especially when a simultaneous release of blockbuster titles is integral to the marketing plan, such as the recent release of Stephen King’s new eerie crime novel Later, printed in Italy by Grafica Veneta.

The book manufacturing segment has seen a steady uptick in M&A interest as the demand for printed books coincided with exits and bankruptcies in the book manufacturing segment. Added to this mix of market forces, reading habits increased during the Covid-induced lockdown. Consequently, publishers began to experience longer lead times and production delays as book manufacturing capacity became strained.

California-based BR Printers, took a big step up in its book manufacturing capabilities in January with the acquisition of National Graphic Solutions, focused on children’s, activity, religious, educational and how-to titles. BR Printers already had an established short-run digital book manufacturing platform. The NGS acquisition adds significant production capacity with long run web offset presses and binding capability, manufacturing 100 million books annually.

Serial acquirer CJK Group has emerged as a major player in the book manufacturing business, growing via acquisition to build out a network of production plants that cater to the educational book, journal and publication segments (see The Target Report: CJK Goes Global as Cenveo Unwinds – September 2020). And not to be forgotten, the restructured LSC Communications company has emerged from bankruptcy with a deleveraged balance sheet and financial backing from Atlas Holdings. With significant book production capacity, LSC now enjoys not only the financial stability of Atlas Holdings, but also a paper products brotherhood within the Atlas portfolio including the Finch and Twin River paper manufacturing companies.

Publishing

Deal activity continues apace upstream from the printers. Outside Integrated Media, publisher of Outside magazine and other outdoor enthusiast titles, was acquired by Pocket Outdoor Media. Based in Boulder, Colorado, Pocket Outdoor Media has changed its named to simply Outside as recognition of the branding power of the acquired iconic magazine. The combined company now owns a multitude of specialty publications and digital properties highly targeted for runners, bicyclists, skiers, rock and ice climbers, and devotees of many other health and fitness activities.

Less exciting to most than rock climbing, skiing, or white-water rafting, but nonetheless still driving print volume, are the titles of educational book publisher AIP Publishing, a subsidiary of the American Institute of Physics. Based in Melville, New York, AIP Publishing recently announced the acquisition of University Science Books, a publisher of books for upper level courses in the physical sciences. The acquired portfolio includes titles such as Quantum Chemistry, Statistical Mechanics, Molecular Thermodynamics, and other academic books. Not quite the page-turners of a Stephen King novel, but according to AIP, its books are published with the highest design and print production quality, setting the gold standard in their respective scientific disciplines.

Still no word from the US Department of Justice on approval, or not, of the pending acquisition of Simon & Schuster by Bertelsmann, the German publishing behemoth (see The Target Report: Dystopia, Social Justice & Steamy Romance – November 2020). The Authors Guild and other writers’ groups have taken an active and vocal position against the takeover, arguing that the deal would give Bertelsmann the pricing power to squeeze down the size of author’s advances and reduce royalties.

The opposition’s position is not limited to just financial concerns. The groups maintain that Bertelsmann’s market position, should the deal be approved, will lead to a decrease in quality and diversity of published works, and furthermore they suggest that this in turn will be a fundamental threat to American democracy. The Authors Guild goes one step further; they are not just asking the DOJ to simply block the deal; they are urging the DOJ to restructure the entire US market for books and take on not only Bertelsmann, but also break up Amazon’s dominant position in book retail.

The Author’s Guild complaint extends beyond control of the publishing houses, their letter cites Bertelsmann acquisition of the Quad book manufacturing plants as further evidence that the German giant has gained an untenable position in the physical production of books, as well as control over content. However, we suspect that notwithstanding Bertelsmann’s dominant position, other printing companies such as the newly combined Grafica Veneta – Lake Book stand ready to provide the alternative manufacturing capacity to all who come knocking on their doors.

Commercial Printing and Diversified Services

Phoenix Group, a large web and sheetfed commercial printing company in Philadelphia, announced the merger of its Phoenix Lithographing unit with New Jersey-based ICS Corporation into a new entity, the Phoenix-ICS Group of Companies. The combined company can print and mail over 100 million pieces of direct mail each month and makes special note of its minority-owned, disabled combat veteran-owned and woman-owned business classifications.

Direct mail often requires envelopes, and some printing companies have taken steps to secure their own ability to print and convert envelopes. Moore, the giant direct mail company headquartered in Tulsa, Oklahoma purchased Worchester Envelope in Auburn, Massachusetts. The 125-year-old acquired company operates out of a 180,000 square foot facility, offering a diverse range of converting and printing options. This follows Moore’s investment in and resurrection of the failed Colortree printing business in Richmond, Virginia which had been a major supplier of specialty envelopes to the non-profit solicitation businesses surrounding the Washington DC region.

Marek Group, a roll-up of printing and marketing service companies, based in Waukesha, Wisconsin, acquired Ecker Envelope, an envelope printing company. Marek has in the past acquired a marketing agency, a promotional products distributor, and a digital printing and mailing services company. Envelope printing capacity is now part of their mix.

Industrial Printing

JN White, an upstate New York manufacturing company operating in the corner of the printing world known as industrial printing, acquired ECI Screenprint in Watertown, Connecticut.** Both companies produce a range of products that are most often incorporated as components into other larger products. Originating as screen printers, industrial printing companies have evolved into sophisticated manufacturing operations. Products produced by JN White and the newly renamed ECI Technologies range from the simple, durable labels and decals, up to the highly engineered and complex user interface membrane switches that control everything from our office copiers to medical and military devices. JN White announced that it will continue to operate manufacturing operations at both locations, retaining ECI’s employees with plans to hire more over the next year.

* “So many books, so little time” has been attributed to rock musician Frank Zappa.

** Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to ECI Screenprint in this transaction.

 

2021 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

Grafica Veneta

No Data

Trebaseleghe, Italy

Lake Book Manufacturing

No Data

Melrose Park, IL

2/26/21

No Data

Purchase of Majority Interest

Book manufacturing

Link

Koozie Group

No Data

Clearwater, FL

HotLine Products

No Data

Saint Paul, MN

2/23/21

No Data

Acquisition

Imprinted calendars

Link

Mill Rock Packaging (Port co. Mill Rock Capital)

No Data

New York, NY

All Packaging Company

No Data

Aurora, CO

2/22/21

No Data

Acquisition

Folding cartons

Link

Pocket Outdoor Media

No Data

Boulder, CO

Outside Integrated Media

No Data

Santa Fe, NM

2/22/21

No Data

Acquisition

Magazine publishing

Link

JN White

No Data

Perry, NY

ECI Screenprint

No Data

Watertown, CT

2/19/21

No Data

Acquisition (Graphic Arts Advisors)

Industrial printing

Link

Green Shield Limited

No Data

Massillon, OH

FiberCorr Mills

No Data

Massillon, OH

2/19/21

No Data

363 Sale in Ch. 11

Corrugated sheets & rolls

Link

MediaNews Group (Port co. Alden Global Capital)

No Data

Denver, CO

Tribune Publishing

No Data

Chicago, IL

2/16/21

$428.4

Purchase of Majority Interest

Metro newspaper

Link

Color Concepts

No Data

Capelle aan den IJssel, Netherlands

The Wrap Institute

No Data

Amsterdam, Holland

2/15/21

No Data

Merger

Wide format education

Link

Avery Dennison

$6,970

Glendale, CA

JDC Solutions

$30.0

Mount Juliet, TN

2/15/21

$24.0

Acquisition

Pressure-sensitive tapes

Link

Pixelle Specialty Solutions (Port co. Lindsay Goldberg)

No Data

Spring Grove, PA

Specialty Papers Business (Div. Appvion)

No Data

Appleton, WI

2/15/21

No Data

Acquisition

Specialty paper manufacturing

Link

Moore

No Data

Tulsa, OK

Worchester Envelope

No Data

Auburn, MA

2/12/21

No Data

Acquisition

Envelope manufacturing

Link

Phoenix Group

$128.5

Philadelphia, PA

ICS Corporation

No Data

West Deptford, NJ

2/11/21

No Data

Merger

Direct mail services

Link

Lectra

$286.3

Paris, France

Gerber Technologies

$200.0

Tolland, CT

2/9/21

$363.6

Acquisition

Digital design technologies

Link

Reid Newspapers

No Data

Weatherford, OK

Miami News Record (+Titles) (Prop. Gannett)

No Data

Miami, OK

2/5/21

No Data

Acquisition (Dirks, Van Essen)

Community newspapers

Link

Marek Group

No Data

Waukesha, WI

Ecker Envelope

No Data

Mequon, WI

2/4/21

No Data

Acquisition

Envelope printing

Link

AIP Publishing (Sub. American Institute of Physics)

No Data

Melville, NY

University Science Books

No Data

Herndon, VA

2/4/21

No Data

Acquisition

Textbook publishing

Link

   

2021 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:

No Chapter 11 Filings Found this Month

---

---

---

---

---

---

---

---

---

Chapter 7 Filings:

ECO Printing LLC

2/21/21

No Data

21-11371

Teaneck, NJ

3rd

New Jersey Newark

Stacey L. Meisel

Russell L. Low

Printing & copying

Pacific Northwest Print & Fulfillment

2/4/21

No Data

21-00159

Spokane, WA

9th

Eastern WA

Frederick P. Corbit

Kevin O'Rourke

Commercial printing

		2021 February - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues ($Mil )	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		News & Observer, Herald-Sun	Apr-21	No Data	Garner, NC	McClatchy	Sacramento, CA	Feb-21	Outsourcing of printing newspapers	Link
		United Press & Graphics	Mar-21	No Data	Hartland, WI	Heritage Printing	Brookfield, WI	Feb-21	Commercial printing	Link

Letterpress, Greeting Cards & Feminism – March 2021 M&A Activity

April 6, 2021, 8:50 pm

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≪ Previous: So Many Books, So Little Time* – February 2021 M&A Activity

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Who knew? A quiet movement has been afoot in the resurgence of artisanal letterpress printing. Mixing politics, feminism and current events with creative, upbeat, and often downright edgy greeting card messages, a network of women-owned businesses has emerged as the voice of the small-shop letterpress trade.

When Paper Source, a national chain of stationery stores, filed for Chapter 11 bankruptcy, the network swung into action, a virtual social media David slinging shots at the corporate Goliath that had just informed approximately 250 cardmakers that they might not be paid in full for their recent shipments of finished goods. Adding insult to injury is the perception among the network that Paper Source had placed unusually large orders from these small independent print shops well in advance of the Spring holidays. They believe that Paper Source management would have, or least should have, known that all payments on those orders would be placed in suspension while the bankruptcy process plays out. Even more irksome, according to some of the cardmakers, Paper Source aggressively pushed for expedited deliveries, apparently to avoid the priority granted in bankruptcy to vendor payments due for products delivered within the 20-day period immediately prior to the bankruptcy filing.

The first shot was slung at Paper Source by the owner of Sapling Press, a letterpress printing shop in Pittsburgh, when she posted “Hell hath no fury like a stationer scorned” on Instagram. This set off a flurry of equally angry responses and supportive posts from the network, including the owners of Chez Gagné, The Card Bureau, Steel Petal Press, Power & Light Press, and Chateau Blanche Design, among others. The network’s vitriol is directed at the CEO of Paper Source, an accomplished woman with ivy league credentials and board level corporate experience in high fashion and retailing. The CEO now squares off against an angry group of entrepreneurial women, owners of micro businesses, who feel betrayed and taken advantage of by the large corporate entity that is, in better times, a significant distribution channel for their printed wares.

The large orders, some of which came after months of inactivity, were cheerfully greeted as a sign of hope, a return to normalcy after an especially difficult year. Several cardmakers received their very first offer from Paper Source during this time, a certain signal that the future was brighter. Their hopes were dashed as the payments of receivables, significant amounts for these small shops, were placed in doubt when Paper Source filed bankruptcy.

Adding insult to injury, Paper Source offered to designate some suppliers in the network with critical vendor status, which would allow immediate payment to the chosen cardmakers for the products that were delivered before the bankruptcy filing date. The alternative is for the cardmakers to wait until the process plays out and receive payments, possibly cents on the dollar, on an equal basis with all unsecured creditors. The rub with the offer to be deemed a critical vendor was that the payment would be between 10% and 30% of the amount owed, accompanied by a promise from the cardmaker that they would continue providing product to the stores for which they would receive 100% payment, consistent with bankruptcy rules.

Paper Source’s chapter 11 filing was preceded by the bankruptcy of Schurman Fine Papers in January 2020, which resulted in the closure of Schurman’s 254 stores, which included the Papyrus, American Greetings and Carlton Card retail store chains. Paper Source picked up 30 of the closed Papyrus stores, announced on March 2, 2020, exactly one year to the day before its own bankruptcy, just in time for retail stores that sell cards, gifts and other discretionary items to get whacked by the outbreak of Covid-19. In defensive statements to the network of woman-owned cardmakers, the CEO of Paper Source pointed to the need to replenish inventories which had been depleted during the early stages of the pandemic, including the need to restock the acquired Papyrus stores.

Regardless of how the Paper Source bankruptcy plays out, we suspect that credit policies are being updated at many of the micro-businesses that supply the boutique greeting card industry. Extra care and thought will be employed when a large and unexpected gift-horse in the form of an inordinately large order comes in over the transom. As for Paper Source, once again a large corporate entity is taken to task by its constituents using the power of social media, this time by a network of small women-owned printing shops dedicated to keeping alive the tradition of fine letterpress printing.

Packaging

It would be an understatement to say that packaging deals are dominating the M&A market in the printing and related industries. Shoreview Industries exited its investment in Rohrer Corporation after a hold period of 11 years, with Wellspring Capital Management picking up the company. The sale is the culmination of a classic PE strategy: recapitalize a family business to establish a platform in a fragmented industry, bolt on several acquisitions to expand the business to multiple manufacturing plants, bring in new senior leadership, and grow revenues. Rohrer grew under Shoreview’s guidance to seven manufacturing facilities and revenues had increased from $67 million to over $200 million. Rohrer produces a wide array of printed paperboard and thermoformed packaging, with expertise in blister cards and folding cartons, serving a wide variety of consumer product companies.

SupremeX, the Canadian envelope and packaging company based in LaSalle, Quebec, acquired Vista Graphic Communications.* Vista, based in Indianapolis, is a manufacturer of folding cartons and specialized micro flute packaging solutions, primarily serving the medical and dental markets. SupremeX was established as an envelope printing company in 1977, was acquired by Cenveo (né Mail-Well) in 1995, and subsequently spun out from Cenveo in 2006 in a public offering on the Toronto exchange. With several acquisitions of envelope companies under its belt, the company strategically added packaging to its offerings with the 2017 acquisition of folding carton company Stuart Packaging, located in Mont-Royal, Quebec. The 2018 purchase of G2 Printing in 2018, also in Quebec, brought labels and additional folding carton capacity into the mix at SupremeX.

Resource Label Group, the serial acquirer of label printing companies, announced another acquisition, the purchase of New England Label in Andover, Massachusetts. Resource Label, headquartered in Franklin, Tennessee, with financial backing from First Atlantic Capital and TPG Growth, has grown to eighteen manufacturing sites across the US and Canada. Capabilities at the most recently acquired company include screen printing to manufacture nameplates and graphic overlays.

Fort Dearborn, a competing packaging industry rollup with financial backing from Advent International, announced the acquisition of Hammer Packaging with two plants in the Rochester, New York area. The sale ends family ownership of Hammer which has spanned four generations. Hammer’s extensive capabilities include cut & stack, in-mold, pressure sensitive, roll-fed, shrink and stretch sleeve labels as well as flexible packaging. The deal increases Fort Dearborn’s footprint to nineteen manufacturing plants across North America. Advent International is the second PE fund to support Fort Dearborn, acquired from KRH Capital in August 2016.

Dunes Point Capital, a new entrant into the PE-backed frenzy to consolidate the label business, announced the formation of Premium Label & Packaging as its platform entity. Simultaneous with the announcement, Premium acquired Label Graphics Manufacturing, a label and shrink sleeve company based in Little Falls, New Jersey with a second facility in nearby Fairfield, New Jersey. Dunes Point also owns Overnight Labels, a manufacturer of pressure sensitive labels, shrink sleeves and flexible packaging located in Deer Park, New York.

Do-It Corporation, which, according to the company’s website, is the world’s largest producer of plastic hang tabs, acquired Tower Tab & Label. Located in South Haven, Michigan, Do-it manufactures a wide variety of specialty devices and marketing materials, all focused on retail display. In addition to its ubiquitous clear plastic hang tabs used to suspend products on retail pegboard hooks, products offered include custom printed hang tabs, bottle neck hangers, carry handles, retail display shelf danglers, and literature holders.

US-based companies were also active on the international stage. Multi-Color Corporation picked up Herrods, an in-mold label company in Australia. ProAmpac announced the acquisition of two UK-based companies, IG Industries, a film extrusion company, and Brayford Plastics, an integrated bag manufacturer serving the bakery, fresh produce, meat, poultry and fish markets.

Commercial Printing and Diversified Services

The Imagine Group (né Imagine! Print Solutions), a retail display and commercial printing company based in Minneapolis, was purchased by an investment group headed up by Cerberus Capital Management. Focused on point of purchase displays and related design services, Imagine has made several acquisitions, beginning with the 2013 purchase of Classic Graphics in Charlotte, North Carolina. Imagine was itself acquired by private equity fund Oak Hill Capital Partners in January 2016, and later that year purchased Midnight Oil, a creative agency based in Burbank, California. During the past pandemic year, revenues at Imagine declined to $419 million from $471 million, driving the company to restructure its capital stack. The company reports that the recapitalization has reduced the debt from $550 million to $100 million, positioning the company to regain its footing and return to a growth mode.

Grossman Marketing Group, a Boston area company, acquired PCI Creative,** a Stamford, Connecticut marketing, printing and mailing company. The Grossman company dates back to its founding 1910 as the Massachusetts Envelope Company. Via a series of acquisitions and name changes over the past century, and now under fourth generation management, the company has evolved into a full-service marketing services provider. Services include fulfillment, graphic design, direct mail, printing, and promotional products, serving a wide range of clients including the educational, financial, and healthcare industries. The acquisition of PCI Creative supports Grossman Marketing’s strategic goal to expand their geographic footprint, strengthening their position in the Connecticut market.

* Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to Vista Graphic Communications in this transaction.

** Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to PCI Creative in this transaction.

   

2021 March - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1 (Surviving Entity)

Pre-Deal Revenues (US$Mil)

Party #1 Address

Deal Party #2

Pre-Deal Revenues (US$Mil )

Party #2 Address

Date Deal Public

Deal Value (US$Mil)

Deal Structure (Intermediary)

Notes

Press Release

Premium Label & Packaging (Port co. Dunes Point Capital)

No Data

Rye, NY

Label Graphics Manufacturing

No Data

Little Falls, NJ

3/31/21

No Data

Acquisition

Labels & shrink sleeves

Link

Multi-Color Corporation (Port co. Platinum Equity)

No Data

Cincinnati, OH

Herrods

No Data

Melbourne, Australia

3/31/21

No Data

Acquisition

In-mold labels

Link

Harper Collins (Div. News Corp.)

$1,676 ($8,720)

New York, NY

HMH Books & Media (Div. Houghton Mifflin Harcourt)

$191.7

Boston, MA

3/29/21

$349.0

Acquisition

Trade book publishing

Link

ProAmpac (Port co. Pritzker Partners)

No Data

Cincinnati, OH

Brayford Plastics

No Data

Lincolnshire, UK

3/22/21

No Data

Acquisition

Flexible packaging

Link

ProAmpac (Port co. Pritzker Partners)

No Data

Cincinnati, OH

IG Industries

No Data

Brigg, UK

3/22/21

No Data

Acquisition

Packaging film production

Link

Wellspring Capital

No Data

New York, NY

Rohrer (Port co. ShoreView)

$200.0

Wadsworth, OH

3/18/21

No Data

Acquisition

Blister card & folding cartons

Link

Cedar Graphics

No Data

Hiawatha, IA

J & A Printing

No Data

Hiawatha, IA

3/17/21

No Data

Asset Acquisition

Commercial printing

Link

Grossman Marketing

No Data

Somerville, MA

PCI Creative Group

No Data

Stamford, CT

3/11/21

No Data

Acquisition (Graphic Arts Advisors)

Marketing & print services

Link

Cerberus Capital Management (w /Goldman Sachs, Arbour Lane)

No Data

New York, NY

Imagine (Port co. Oak Hill Capital)

$419.0

Minneapolis, MN

3/10/21

No Data

Acquisition & Recap (Moelis)

Point of purchase displays

Link

SupremeX

$162.7

Lasalle, QC

Vista Graphic Communications

No Data

Indianapolis, IN

3/9/21

No Data

Acquisition (Graphic Arts Advisors)

Folding cartons

Link

Resource Label Group (Port co. First Atlantic Capital)

No Data

Memphis, TN

New England Label

No Data

Andover, MA

3/8/21

No Data

Acquisition

Labels & graphic overlays

Link

Do-it Corporation

No Data

South Haven, MI

Tower Tab & Label

No Data

Benton Harbor, MI

3/5/21

No Data

Acquisition

Hang tabs & specialty products

Link

Fort Dearborn (Port co. Advent International)

$525.0

Elk Grove, IL

Hammer Packaging

$111.0

W. Henrietta, NY

3/1/21

No Data

Acquisition

Labels & flexible packaging

Link

Mittera Group

$253.5

Des Moines, IA

Creel Printing

No Data

Las Vegas, NV

3/1/21

No Data

Acquisition (New Direction)

Commercial printing

Link

   

2021 March - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries

Filing Party

Date Case Filed

Pre-Petition Revenues (US$Mil)

Case #

Filing Party Address

Circuit

Region & City

Judge

Attorney for Debtor

Notes

Chapter 11 Filings:

Expo Marketing Group, LLC

3/16/21

No Data

21-10668

Orange, CA

9th

Central CA Santa Ana

Theodor Albert

Marc C. Forsythe

Trade show exhibits

Paper Source, Inc.

3/2/21

No Data

21-30660

Chicago, IL

4th

Eastern VA Richmond

Keith L. Phillips

David William Gaffey

Specialty Paper Products Retailer

Chapter 7 Filings:

Valley Printer, Inc.

3/12/21

No Data

21-30388

Sweetwater, TN

6th

Eastern TN Knoxville

Suzanne H. Bauknight

John P. Newton, Jr.

Commercial Printing

   

		2021 March - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues (US$Mil)	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		J & A Printing	Mar-21	No Data	Hiawatha, IA	Cedar Graphics	Hiawatha, IA	Mar-21	Commercial printing	Link
		MPM Communications	4/14/21	No Data	Waldorf, MD	None	N/A	Mar-21	Direct mail printing	Link
		Creel Printing	Q2 2021	No Data	Las Vegas, NV	Mittera	Des Moines, IA	Mar-21	Publication & commercial printing	Link

SPACs and Credit Cards for the 1% – April 2021 M&A Activity

May 6, 2021, 1:41 pm

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A prospective client seeking to sell their company recently asked me if the recent craze involving the use of SPACs to buy private companies might be applicable to their firm. I answered unequivocally that SPACs were suited to much bigger companies as well as industries with more future growth and appeal than exhibited by the mature printing and packaging industry. I was wrong. In the case of one industrial printing company, a merger into a SPAC is the pathway to value and liquidity for the owners.

SPAC is the acronym for a Special Purpose Acquisition Company. In simple terms, a SPAC is essentially a shell company that raises money in the public markets via a stock listing. Since there is no actual business at its formation, the investors in a SPAC are trusting that the sponsors will find a real business worth teaming up with. Once a target company is identified, the SPAC and the target company merge, and voilà, the private company has become a public company without all the fuss of convincing investors in the value and business model of the acquired company. SPACs have been around for a long time, but of late there has been tremendous growth in the use of SPACs; according to one source the total value of SPACs jumped 400% from 2019 to 2020 and the number of deals to date in 2021 is easily on pace to exceed last year.

Which brings us to CompoSecure, a New Jersey-based industrial printing company that prints and manufactures credit cards. However, these are not your run-of-the-mill plastic credit cards. CompoSecure specializes in credit cards made from metal and metal laminates. According to the company’s website, metal credit cards are “products that excite and impress customers” and “elevate the cardholder’s experience at the point of sale.” Aimed at high-net-worth individuals and big spenders, bespoke credit cards are beautifully produced with brand names such as Primo, Alpha, Platinum, Venture, Carta Black, Real Gold, Infinite Privilege, Elite, and other names suggestive of a level of personal financial success that warrants carrying something other than a plain old plastic card.

The predecessor company to CompoSecure was founded in 1910 as a manufacturer of celluloid shirt collars, but quickly migrated to specialty industrial printed products such as radio dials that required an expertise in printing on plastics. Other products followed, such as slide rules and printed advertising specialties which eventually led to the production of printed cards for direct mail promotions. When the credit card industry boom hit, the company was perfectly positioned and became the second manufacturer in the world for MasterCard. The company added RFID products and contact chips to its offerings, leading to the formation of CompoSecure in 2000. The company produced its first metal card in 2003; the die was cast, and metal cards became the foundation for the company’s future and impressive growth trajectory.

The company’s advanced industrial printing and manufacturing capabilities have enabled it to branch out into other forms of high-end identification cards. These include membership and gift cards for upscale brands, exclusive lounge keys, as well as custom cards for guests at luxury resorts and casinos. In addition to these high-end cards, the company uses its secure production facilities and technical expertise to produce government-issued identification cards and other high security documents.

CompoSecure just announced that the company will be merging with Roman DBDR Tech Acquisition Corp., a SPAC with $236 million in cash sitting in trust ready to go. Based on the current market price of the SPAC shares, the implied proforma enterprise value of the company will be $1.2 billion upon completion of the merger. The company reported revenues of $261 million in 2020 with an adjusted EBITDA of $116 million (44.4%). The total proforma enterprise value equals 10.3 times adjusted EBITDA, 4.6 times trailing revenues. Philadelphia-based private equity fund LLR Partners, which invested $154 million in the company in 2015, will retain its position as CompoSecure’s largest shareholder.

A question remains for this industrial printer turned purveyor of credit eminence. Does a metal card still convey prestige when only the owner feels the heft of the laser engraved metal plate? Like many other aspects of our lives impacted over the past year by the Covid-19 pandemic, we almost never hand our credit card to anyone anymore, rather we insert the card ourselves into the chip reader or simply waive the card over the reader, or do without the card completely and pay using Venmo or other phone-based financial app. CompoSecure is not sitting around waiting to be obsoleted out of existence; up next: high-end luxury branded NFC-enabled metal cards to store or receive your cryptocurrency in an attractive “cold storage” device. And, for those at the top of the economic ladder, those crypto wallets will be metal and, of course, printed with status-conferring graphics.

Packaging

The M&A activity in the packaging segments continues at a steady pace, with private equity 0providing the fuel for what can only be described as a hot market. Brook & Whittle, headquartered in Connecticut and backed by PE firm Snow Phipps Group, announced the purchase of Digital Label Solutions in Yorba Linda, California. Brook & Whittle has been on an acquisition tear, ripping through six acquisitions since the breakout of the virus last year. This latest deal is its third on the west coast. The acquired company is a trade-only printer and breaks the Brook & Whittle mold of rolling up direct-to-customer companies, crossing into the territory of label printers that serve distributors and brokers.

Fortis Solutions Group, with backing from Main Post Partners, announced the acquisition of Total Label, with production facilities in Montana and Tennessee. The company produces complex pressure sensitive, extended content and booklet labels, using flexo, letterpress and digital technologies. Fortis has built out a national production platform from its headquarters in Virginia Beach, Virginia, with fourteen facilities ranging from California to Texas to Connecticut, and now way up north in Whitefish, Montana, 60 miles from the Canadian border.

The folding carton segment has not seen M&A activity and enterprise valuations anywhere near what has been occurring in the label segment. That may be about to change. Radial Equity Partners, based in New York City, established a new platform in folding cartons with the acquisition of Lewisburg Printing Company, in Lewisburg, Tennessee. The acquired company operates very large format offset presses, as well as flexo and digital presses. In addition to packaging, the company produces retail displays. Radial Equity Partners is itself a new investment vehicle, formed by several partners from Irving Place Capital who bring extensive experience in packaging to their new private equity venture. We expect more deals to follow.

Oliver, a folding carton roll-up, purchased Boutwell, Owens & Co., located in Fitchburg, Massachusetts. When Oliver was itself acquired by Chicago PE firm Pfingsten Partners in 2016, the company was already well on its way in its self-directed strategic transition from a commercial printing company to a folding carton manufacturer. Since then, Pfingsten has provided the strategic focus and gas in the tank to accelerate the transformation of Oliver. The Boutwell acquisition follows previous additions to the Oliver family: DISC Graphics on Long Island in New York, and Pohlig Packaging in Richmond, Virginia. Boutwell brings blister card expertise, as well as more folding cartons, to the Oliver platform.

Graphic Packaging, the publicly traded behemoth of the folding carton segment, acquired Americraft Carton. As befits a transaction by a larger buyer, the acquired company has seven manufacturing facilities, and is expected to bring in revenues of $200 million. With an adjusted EBITDA of $30 million (15%), the $280 million purchase price is 9.3 times adjusted EBITDA, 1.4 times revenue. Graphic Packaging expects consolidation savings to generate an additional $10 million of EBITDA within two years of closing, implying a going-forward purchase price multiple of 7.0 times the eventual adjusted EBITDA.

In the bag manufacturing segment, another deal was announced by ProAmpac, backed by Pritzker Private Capital. The company purchased El Dorado Packaging, headquartered in Rosemont, Minnesota, with additional plants in Arkansas and Nebraska. El Dorado produces paper self-opening bags for food service, as well as industrial multi-wall bags for food, seed, and chemical markets. This latest transaction is consistent with ProAmpac’s recent departure from flexible packaging to focus on bag production (see The Target Report: Bags, Pouches, Trays & Bowls – December 2020).

Commercial Printing and Diversified Services

Ironmark, a provider of commercial printing and diversified graphic communication services in Annapolis Junction, Maryland, acquired Spectrum Printing & Graphics located in Rockville, Maryland. Ironmark began its transition from traditional commercial printing company to full marketing production services company when Corporate Printing Solutions and Frank Gumpert Printing came together as CPS Gumpert in 2011. The merged companies rebranded as Ironmark in 2014, and with additional subsequent acquisitions, the company now provides creative services, web development, digital marketing, logistics, and yes, printing services.

   

2021 April - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1 (Surviving Entity)

Pre-Deal Revenues (US$Mil)

Party #1 Address

Deal Party #2

Pre-Deal Revenues (US$Mil )

Party #2 Address

Date Deal Public

Deal Value (US$Mil)

Deal Structure (Intermediary)

Notes

Press Release

Cookbook Specialists (Div. Print Express)

No Data

Independence, IA

Jumbo Jack's

No Data

Audubon, IA

4/30/21

No Data

Acquisition

Custom book publishing

Link

Graphic Packaging

$6,610

Atlanta, GA

Americraft Carton

$200.0

Prairie Village, KS

4/27/21

$280.0

Acquisition

Folding cartons

Link

Brook & Whittle (Port co. Snow Phipps Group)

No Data

North Branford, CT

Digital Label Solutions

No Data

Yorba Linda, CA

4/27/21

No Data

Acquisition

Label & shrink sleeve printing

Link

Deluxe

$1,790

Shoreview, MN

First American Payment Systems (Port co. Stella Point Capital)

No Data

Fort Worth, TX

4/22/21

$960.0

Acquisition

Payment processing

Link

Rapid Displays (Port co. Gemspring Capital)

No Data

Chicago, IL

Outform

No Data

Miami, FL

4/22/21

No Data

Acquisition/Merger

Retail displays

Link

Allegra Marketing Print Mail

No Data

Carol Stream, IL

The Sign Authority

No Data

Wheaton, IL

4/20/21

No Data

Acquisition

Wide format & signage

Link

ProAmpac (Port co. Pritzker Partners)

No Data

Cincinnati, OH

El Dorado Packaging (Port co. Industrial Opportunity Partners)

No Data

Rosemount, MN

4/20/21

No Data

Acquisition (Mesirow)

Bag manufacturing

Link

Amcor

$12,480

Victoria, Australia

ePac Flexible Packaging

$100.0

Middleton, WI

4/19/21

$15.0

Minority Interest

Digital flexible packaging

Link

Roman DBDR Tech Acquisition

$0.0

Las Vegas, NV

CompoSecure (Port co LLR Partners)

$261.0

Somerset, NJ

4/19/21

$1,200

SPAC Merger

Metal payment card printing

Link

Eastman Kodak

$1,030

Rochester, NY

Computer-to-Plate Business (Div. ECRM)

No Data

North Andover, MA

4/19/21

No Data

Acquisition

CTP Equipment

Link

Grimco

No Data

Fenton, MO

New Hampshire Plastics

No Data

Manchester, NH

4/16/21

No Data

Asset Acquisition (SSG Capital Advisors)

Wide format substrates

Link

Matrix Imaging Solutions (Port co. Lakelet Capital)

No Data

Sanborn, NY

ClassicPlus & Throttle

No Data

Frederick, MD

4/14/21

No Data

Acquisition

Direct mail & promo items

Link

Radial Equity Partners

No Data

New York, NY

Lewisburg Printing Company

No Data

Lewisburg, TN

4/13/21

No Data

Acquisition

Folding cartons & retail display

Link

Fortis Solutions Group (Port co. Main Post Partners)

No Data

Virginia Beach, VA

Total Label

No Data

Whitefish, MT

4/8/21

No Data

Acquisition

Label printing

Link

Ironmark

$32.2

Annapolis Junction, MD

Spectrum Printing & Graphics

No Data

Rockville, MD

4/6/21

No Data

Acquisition

Commercial printing

Link

Pixelle Specialty Solutions (Port co. Lindsay Goldberg)

No Data

Spring Grove, PA

Rollsource (Div. Veritiv)

No Data

Pittsburg, KS

4/5/21

No Data

Acquisition

Paper converting

Link

Oliver Printing & Packaging (Port co. Pfingsten Partners)

No Data

Twinsburg, OH

Boutwell, Owens & Co.

No Data

Fitchburg, MA

4/1/21

No Data

Acquisition

Folding cartons & blister cards

Link

Mactac Div. Lintec

No Data

Stow, Ohio

Duramark

No Data

Minneapolis, MN

4/1/21

No Data

Acquisition

Pressure-sensitive stocks

Link

   

2021 April - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries

Filing Party

Date Case Filed

Pre-Petition Revenues (US$Mil)

Case #

Filing Party Address

Circuit

Region & City

Judge

Attorney for Debtor

Notes

Chapter 11 Filings:

No Chapter 11 Filings Found this Month

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Chapter 7 Filings:

No Chapter 7 Filings Found this Month

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		2021 April - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues (US$Mil)	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		Essentra Packaging	6/1/21	No Data	Moorestown, NJ	Essentra Packaging	Nottingham, UK	Apr-21	Packaging & tapes	Link
		Mekkatti Graphics	4/27/21	No Data	Port Washington, NY	None	N/A	Apr-21	Commercial & pharmaceutical printing	Link

On Demand Everything – May 2021 M&A Activity

June 6, 2021, 9:57 pm

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≪ Previous: SPACs and Credit Cards for the 1% – April 2021 M&A Activity

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Print quantity of one, available anywhere, anytime, on anything. The vision of on-demand printing, personalized to each unique recipient, is no longer limited to paper. Digital print technologies have created opportunities to efficiently and cost-effectively customize and uniquely decorate the full range of products we use every day, including the clothes we wear. Charlotte, North Carolina-based Printful has combined digital printing on fabrics with robust fulfillment systems and white-label storefront software, all conceived and implemented for on-demand production and shipping on behalf of brands and designers on a global basis.

The eight-year-old company was positioned perfectly to take advantage of the uptick in online ordering over the past year during the pandemic lockdowns. Revenues in 2020 grew 80% over the prior year and exceeded $200 million. Private equity firm Bregal Sagemount, based in New York, took notice and invested $130 million for a non-control minority position in Printful. While the exact proportion of the equity acquired was not disclosed, the founder of the company was rightfully proud to announce that the investment implies that the total enterprise value exceeds $1 billion, achieving “unicorn” status for the on-demand clothing and promotional items printing company.

This is not the first investment in digital printing for the Bregal global family of investment funds. The German arm, Bregal Unternehmerkapital, acquired the commercial printing company OnlinePrinters in 2016. Operating throughout Europe, the company produces primarily paper-based printed products, ordered via several branded online websites throughout the EU countries. Bregal was the second institutional investor in OnlinePrinters which was founded in 2004 and had grown to 600 employees under the prior ownership of PE firm TA Associates. With the guidance and financial support of Bregal, OnlinePrinters has more than doubled in size, with over 1,400 employees and a fleet of almost 200 printing units, including Heidelberg offset and HP digital presses. We expect that Bregal’s New York team is planning for Printful to follow a similar trajectory, carving out increasing share in the growing market for digitally printed custom apparel.

Commercial printed communications and informational printing (such as newspapers) have been hit hard over the past year. The conversion to online communications accelerated as a matter of necessity in lockdown. Companies such as Printful know that while we may not need printed brochures or newspapers in the future, almost everything else will still be printed and decorated. As we wrote about several years ago, companies such as EFI and others were not waiting around hoping that paper will remain dominant; forward-looking print-centric equipment manufacturers were aggressively acquiring innovative companies that had adopted digital printing technologies to fabrics (see the Target Report: EFI Walks the Digital Fashion Runway - July 2015). The future of print will increasingly be individually customized with the images we want, delivered wherever we want, printed on demand when we want, and applied to whatever products we choose.

Commercial Printing and Diversified Services

As if signaled by the outbreak of normalcy across the US, M&A activity has returned to the commercial printing segment. During the pandemic period (from March 2020 to April 2021), we have noted an average of 1.6 transactions per month, compared to the average of 3.4 commercial printing M&A transactions per month during the prior four years. While it is too soon to declare that the trend in May is a return to the norm, it may be an indication that owners of commercial printing companies are back in the market, to sell or buy.

Prisma, the Phoenix, Arizona-based printing and marketing production services company, announced a duet transaction in Music City USA, with the simultaneous acquisition of Parris Printing and TruColor Litho. The two companies have been rebranded as Prisma Nashville. TruColor Litho moved into the Parris Printing facility and plans have already been announced to establish a new permanent Nashville campus for the combined companies in early 2022.

Thysse, located in Oregon, Wisconsin, which promotes itself as a design, printing, specialty graphics, and manufacturing company, purchased the Badger Group located in nearby Fort Atkinson. The acquired company brings a tradition of direct mail and commercial printing expertise and has been tucked into the Thysse location. Effectively bracketing the pandemic period with bookend acquisitions, Thysse announced its last acquisition, the purchase of wide format printing company Sign Edge, during the first week of March 2020.

All Service Graphics, a printing and mailing company located on the space coast in Florida, was acquired by Orlando-based Superior Press.* The transaction was a reverse tuck-in; Superior Press had outgrown its facility and moved its operations into the acquired company’s production facility. Superior Press plans to continue to grow, utilizing the acquired ready-made larger plant, with the bonus of an acquired customer base. The sellers, who own the facility, will eventually completely exit operational responsibilities, but retain the real estate assets now leased to Superior.

Heeter, a commercial printing company that has successfully transitioned to a comprehensive marketing services production company with expertise in direct mail, has acquired commercial printing company Duke Print & Mail. Heeter, located just outside of Pittsburgh, Pennsylvania, has announced that it will maintain the Duke brand and operations in Cleveland, Ohio. Heeter has joined a number of other printing companies strategically acquiring and operating satellite production facilities, consistent with the trend we have noted over the past couple years. This is in contrast to the wave of national roll-ups of yore (see The Target Report: Commercial Printing: Consolidation or Regional Expansion? November 2019).

Packaging

In contrast to M&A activity in the commercial printing segment, deals in packaging have continued at a steady average pace of 3.9 transactions per month during the pandemic period, exceeding the pre-pandemic average of 3.3 transactions announced per month over the prior four years. Despite the anomalous dip in February 2021, all indications are that the packaging segments, especially labels and flexible packaging, will remain red hot, and folding carton manufacturers will increasingly receive more attention.

PPC Flexible Packaging, a portfolio company of Morgan Stanley Capital, announced its second deal during the pandemic period, acquiring Target Labels & Packaging in North Salt Lake, Utah. The acquired company adds to PPC’s presence in the western US, and produces flexo and digitally printed labels, rollstock, and pouches for nutraceutical, snack, confectionary, and specialty consumer product markets. PPC’s other deal during the lockdown was the purchase of Custom Poly Bag in December, one of the transactions we noted as indicative of the resurgence of interest in the manufacturing of the simple bag (see The Target Report: Bags, Pouches, Trays & Bowls – December 2020).

Novolex wrapped up an agreement to acquire Flexo Converters USA, a manufacturer of paper bags and sacks headquartered in Meriden, Connecticut with an additional plant in Monroe, Georgia. Novolex, with financial backing of the Carlyle Group, now has 55 manufacturing plants and more than 10,000 employees. The company operates its own plastic recycling centers but has noted that this latest acquisition is in response to an increase in consumer demand for paper bags.

Resource Label Group, a portfolio company of First Atlantic Capital, and a serial acquirer of label manufacturing companies, announced its fourth deal since the outbreak of Covid-19, bringing Tinley Park, Illinois-based Cypress Multigraphics into its family. Cypress Multigraphics was founded as an industrial printing company, using letterpress to manufacture durable labels and nameplates used in product identification. The company added screen printing, flexo and digital printing and expanded to roll label production. The transaction suggests another trend we have noted, increased interest in US-based industrial printing capability.

* Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to All Service Graphics in this transaction.

  

2021 May - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1 (Surviving Entity)

Pre-Deal Revenues (US$Mil)

Party #1 Address

Deal Party #2

Pre-Deal Revenues (US$Mil )

Party #2 Address

Date Deal Public

Deal Value (US$Mil)

Deal Structure (Intermediary)

Notes

Press Release

Paxton Media Group

No Data

Paducah, KY

Landmark Community Newspapers (46 titles)

No Data

Shellyville, KY

5/26/21

No Data

Acquisition

Community newspapers

Link

Bregal Sagemount

No Data

New York, NY

Printful

$200.0

Charlotte, NC

5/24/21

$130.0

Minority Interest

On-demand products

Link

Maxcess

No Data

Oklahoma City, OK

OneBox Vision

No Data

Tipperrary, Ireland

5/20/21

No Data

Acquisition

Web inspection systems

Link

Novolex (Port co. Carlyle Group)

No Data

Hartsville, SC

Flexo Converters USA

No Data

Meriden, CT

5/17/21

No Data

Acquisition

Bag manufacturing

Link

Smart Source

No Data

Atlanta, GA

Superior Business Solutions

$25.0

Kalamazoo, MI

5/17/21

No Data

Acquisition (Corp Dev Assoc)

Print management services

Link

Thysse

$15.0

Oregon, WI

Badger Group

No Data

Fort Atkinson, WI

5/17/21

No Data

Acquisition

Commercial printing

Link

Prisma

No Data

Phoenix, AZ

TruColor Litho

No Data

Nashville, TN

5/17/21

No Data

Acquisition

Commercial printing

Link

Prisma

No Data

Phoenix, AZ

Parris Printing

No Data

Nashville, TN

5/17/21

No Data

Acquisition

Commercial printing

Link

Graphic Packaging

$6,610

Atlanta, GA

AR Packaging (Port co. CVC Capital Partners)

$1,100

Lund, Sweden

5/14/21

$1,450

Acquisition

Folding cartons

Link

Heeter

$29.3

Canonsburg, PA

Duke Print & Mail Solutions

$6.9

Cleveland, OH

5/14/21

No Data

Acquisition

Commercial printing

Link

Millcraft Paper

No Data

Cleveland, OH

Dennis Paper

No Data

Nashville, TN

5/13/21

No Data

Acquisition

Paper distribution

Link

Superior Press

No Data

Orlando, FL

All Service Graphics (Represented by Graphic Arts Advisors)

No Data

Melbourne, FL

5/13/21

No Data

Acquisition (Graphic Arts Advisors)

Commercial printing

Link

Elliott Investment Management

No Data

New York, NY

Paper Source

No Data

Chicago, IL

5/11/21

$91.5

363 Sale in Ch. 11 (SSG Capital Advisors)

Specialty Paper Products Retail

Link

Grimco Canada

No Data

North York, ON

Cobalt Graphics (Sub. Cansel)

No Data

Surrey, BC

5/11/21

No Data

Acquisition

Graphic supplies distributor

Link

Paper Excellence

$2,400

Richmond, BC

Domtar

$3,560

Fort Mill, SC

5/11/21

$3,000

Acquisition

Printing paper manufacturing

Link

Community Newspaper Holdings

No Data

Montgomery, AL

The Transylvania Times

No Data

Brevard, NC

5/10/21

No Data

Acquisition (Dirks, Van Essen)

Community newspaper

Link

ImPRESSions Worldwide

No Data

Burlington, WA

Central Graphics

No Data

Romeoville, IL

5/10/21

No Data

Asset Acquisition

Web press sales & service

Link

Resource Label Group (Port co. First Atlantic Capital)

No Data

Memphis, TN

Cypress Multigraphics

No Data

Tinley Park, IL

5/6/21

No Data

Acquisition

Labels & nameplates

Link

Vermont News and Media

No Data

Brattleboro, VT

Bennington Banner (+3 titles) (Prop. New England Newspapers)

No Data

Pittsfield, MA

5/4/21

No Data

Acquisition

Regional newspapers

Link

CCL Industries

$4,393

Toronto, ON

Lux Global Label Asia

$9.2

Singapore

5/3/21

$9.4

Acquisition

Label printing

Link

PPC Flexible Packaging (Port co Morgan Stanley Capital)

No Data

Buffalo Grove, IL

Target Labels & Packaging

No Data

North Salt Lake, UT

5/3/21

No Data

Acquisition

Labels & pouches

Link

Colorado News Conservancy

No Data

Denver, CO

Colorado Community Media (24 titles)

No Data

Englewood, CO

5/3/21

No Data

Acquisition

Community newspapers

Link

   

2021 May - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries

Filing Party

Date Case Filed

Pre-Petition Revenues (US$Mil)

Case #

Filing Party Address

Circuit

Region & City

Judge

Attorney for Debtor

Notes

Chapter 11 Filings:

Cobra Ink Systems, Inc.

5/25/21

No Data

21-01651

Cookeville, TN

6th

Middle TN Nashville

Marian F. Harrison

Steven L. Lefkovitz

Digital printing inks

Morris Mailing, Inc.

5/17/21

No Data

21-06416

Wauconda, IL

7th

Northern IL Chicago

Jacqueline P. Cox

John F. Hiltz

Mailing services

Chapter 7 Filings:

Daniel Blue Print Company

5/24/21

No Data

21-60230

Waco, TX

5th

Western TX San Antonio

Ronald B. King

Erin B. Shank

Reprographic & commercial printing

G&A Label, Inc.

5/12/21

No Data

21-30379

El Paso, TX

5th

Western TX El Paso

H. Christopher Mott

Carlos A. Miranda

Commercial & wide format printing

Print House Plus, LLC

5/10/21

No Data

21-01284

Columbia, SC

4th

South Carolina Columbia

David R. Duncan

Daniel J. Reynolds, Jr.

Commercial printing

Images on Metal, Inc.

5/6/21

No Data

21-30735

Dodge, MN

8th

Minnesota St. Paul

Katherine A. Constantine

Karl A. Kruger

Screen printing

   

		2021 May - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues (US$Mil)	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		No Non-Bankruptcy Plant Closures Found this Month		---	---	---	---	---	---	---

Apollo Trades Textbooks for Wallpaper & Pillows – June 2021 M&A Activity

July 7, 2021, 7:50 pm

≫ Next: Packaging Industry Consolidation in Every Direction – July 2021 M&A Activity

≪ Previous: On Demand Everything – May 2021 M&A Activity

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Global Management, the massive publicly traded alternative investment firm, acquired on-demand fabric printing company Spoonflower through its platform company, Shutterfly, the on-demand photobook printing company. The very next day Apollo announced that it was divesting its interest in McGraw Hill, the publisher of educational textbooks and digital content that serves educational markets.

Spoonflower has transformed the market for on-demand home décor within the soft goods categories. The on-demand digital printing platform enables consumers to design their own patterns on a multitude of products such as pillows, blankets, sheets, towels, curtains, tablecloths, napkins, and placemats. In the event you want matching walls with your chosen design motif, on-demand custom wallpaper is also offered. If you are handy with the needle and thread, fabric can be printed by the yard for you to sew your own creations. Available substrates include a variety of linens, cottons, polyesters and even spandex.

The company boasts that its platform hosts 3.3 million unique creative individuals that upload an average of 4,000 new designs every day. Over 25,000 designers have posted their designs into the public space on Spoonflower, available for consumers who browse through all the posted patterns to select, apply and order printed items. The designers are not hidden behind the Spoonflower façade, rather they are featured, lauded, awarded in ongoing design competitions, made known to consumers browsing the website, and paid a commission when their designs are ordered.

Strategically, the Spoonflower acquisition clearly fits into Apollo’s Shutterfly platform. Apollo acquired Shutterfly, the leader in the digital photo storage, prints processing and personalized merchandise segment, in June 2019 for $2.7 billion. Just to make sure that it would be the dominant player in the highly competitive and fragmented photo space, Apollo simultaneously snapped up Snapfish, the runner up to Shutterfly in the photo books and related online photo products printing segment. Included with the Shutterfly portion of the initial roll-up deal, Apollo also acquired Lifetouch, the school photography company that Shutterfly had itself previously purchased.

Other brands owned by Shutterfly include Groovebook, an app that prints monthly photobooks from its customers’ phones, and Tiny Prints, a printer of customized announcements, invitations, and note cards. The collective power and scope of Shutterfly’s on-demand printing capabilities enables consumers to customize their printed communications and environments, from birth announcements to graduation commemorations to home decorations. It’s one more vote of confidence from the big money folks in the future of printing, as long as its digital, on-demand, and personalized (see The Target Report: On Demand Everything – May 2021).

Platinum Equity announced the acquisition of McGraw Hill from Apollo one day after the Spoonflower deal was made public. Platinum Equity has significant holdings in companies that are print-centric, so is no stranger to print. However, it would be wrong to say that McGraw Hill, the purveyor of educational content, is really still a book publisher at its core. As we noted back in 2012 when Apollo acquired what was then called McGraw Hill Education, it seemed to us that Apollo’s goal was to use the textbook business as a launching pad for investment in digital educational products. At the time, publishers of educational textbooks were struggling as governments cut back on purchases of books and the transition to online digital content was past the initial gestation stage. (see The Target Report: Will Private Equity Accelerate Migration to Digital Content Delivery in Education? November 2012). With a purchase price of $2.3 billion at the time, McGraw Hill Education was considered a distressed asset in need of new direction and a systemic turnaround.

Lest there be any doubt about the move to digital delivery of educational content, Apollo’s senior partner who announced the sale to Platinum Equity complimented the McGraw Hill team which “demonstrated tremendous agility and innovation in transforming the company from a print-centric organization to one that today provides engaging, intuitive and effective digital products that help drive student success.” Under Apollo’s ownership, McGraw Hill acquired six digitally focused acquisitions that feature recurring revenues and higher margins. The business now generates more than $1 billion annually from digital products, representing in excess of 60% of total revenues, up from only 25% when Apollo initially acquired McGraw Hill’s education division. Even more impressive, digital products now represent 80% of revenues within McGraw Hill’s business segment that serves higher education.

Platinum’s stated mission in acquiring McGraw Hill is to continue the company’s dedication to support education globally, with a clear focus on investing in digital learning tools. Looking back on the past year of forced online learning, it looks like a good bet that printed textbooks, while not totally going the way of phonebooks, will be less and less the bedrock tool of learning in the future.

Direct Mail

Cathedral Corporation, an upstate New York-based direct mail company, announced the acquisition of Letter Concepts. The acquired company, located in Connecticut, is a highly specialized direct mail company, providing personalized, targeted, and segmented direct mail fundraising campaigns for Catholic dioceses. You might call it a marriage made in heaven, as Cathedral itself has more than a century of experience providing fundraising support services to Catholic churches and dioceses. Cathedral and its new acquisition address the specific needs of their target market with a mix of products and additional services that includes, among other items, offering envelopes, pledge reminder mailings, online donation websites, mobile giving applications, contribution tracking, check depositing, lockbox services, and social media advertising.

In another, but diametrically different, example of an acquisition of a direct mail company that services a highly targeted and defined market vertical, Intellus acquired South Jersey-based Maple Direct. The acquired company specializes in marketing for the casino gaming industry. With offset, digital printing, and laser personalization imaging capabilities, Maple has additional locations in Arizona, Florida and Louisiana. Intellus was formed in 2019 when IBS Direct purchased ClientLink, a direct mail and fulfillment company in Montgomeryville, Pennsylvania, a year after IBS Direct itself was purchased by Logan Marketing Group. With the addition of Maple Direct, Intellus now markets itself as a fully integrated marketing organization.

Specialty Print Communications, aka SPC, located in Niles, Illinois, purchased FuelPop Marketing. The company announced that the acquisition expands its robust printing and mailing capabilities into a “fully integrated marketing toolkit.” The acquired company provides creative services, hyper-targeting and integration of digital marketing.

   

2021 June - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1 (Surviving Entity)

Pre-Deal Revenues (US$Mil)

Party #1 Address

Deal Party #2

Pre-Deal Revenues (US$Mil )

Party #2 Address

Date Deal Public

Deal Value (US$Mil)

Deal Structure (Intermediary)

Notes

Press Release

Mullen Group

$1,140

Okotoks, AB

QuadExpress (Div. Quad)

No Data

Sussex, WI

6/30/21

$40.0

Acquisition (Mesirow)

Third party logistics

Link

GSG

No Data

Dallas, TX

McBee Supply

No Data

Houston, TX

6/30/21

No Data

Acquisition

Graphic supplies distributor

Link

Smart Source

No Data

Suwanee, GA

Cornerstone Media

No Data

Irondale, AL

6/29/21

No Data

Acquisition

Print management services

Link

Kodak

$1,030

Rochester, NY

Service & Parts Business (Div. Southern Lithoplate)

No Data

Youngsville, NC

6/24/21

No Data

Acquisition

Printing plates

Link

Intellus

No Data

Montgomeryville, PA

Maple Direct

No Data

Pennsauken, NJ

6/21/21

No Data

Acquisition

Direct mail

Link

Cathedral Corporation

$44.0

Rome, NY

Letter Concepts

No Data

Kensington, CT

6/16/21

No Data

Acquisition

Direct mail

Link

Platinum Equity

No Data

Los Angeles, CA

McGraw Hill (Port co. Apollo Global Mgmt.)

No Data

New York, NY

6/15/21

$4,500

Acquisition

Educational publishing

Link

Shutterfly (Port co. Apollo Global Mgmt.)

No Data

Redwood City, CA

Spoonflower

No Data

Durham, NC

6/14/21

$225.0

Acquisition

On-demand home décor

Link

Wisconsin Media Group (Affil. O'Rourke Media Group)

No Data

Oregon, WI

Unified Newspaper Group (Div. Woodward Communications)

No Data

Verona, WI

6/10/21

No Data

Acquisition (Cribb, Greene & Cope)

Community newspapers

Link

Soteria Flexibles (Port co. Ardian)

No Data

Carol Stream, IL

Redi-Bag

No Data

Tukwila, WA

6/10/21

No Data

Acquisition

Plastic wraps & bags

Link

Delta Apparel

$391.8

Greenville, SC

Autoscale.ai

No Data

Dallas, TX

6/8/21

$8.0

Acquisition

Custom apparel automation

Link

Specialty Print Communications

$96.6

Niles, IL

FuelPop Marketing

No Data

Lake Forest, IL

6/7/21

No Data

Acquisition

Advertising technology

Link

Ennis

$365.9

Midlothian, TX

AmeriPrint

No Data

Harvard, IL

6/3/21

No Data

Acquisition

Business forms

Link

TC Transcontinental

$2,065

Montreal, QC

BGI Retail

No Data

Paris, ON

6/1/21

No Data

Acquisition

Wide format, in-store display

Link

2021 June - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries

Filing Party

Date Case Filed

Pre-Petition Revenues (US$Mil)

Case #

Filing Party Address

Circuit

Region & City

Judge

Attorney for Debtor

Notes

Chapter 11 Filings:

Nieman Printing, Inc.

6/17/21

$29.2

20-31134

Dallas, TX

5th

Northern TX

Stacey G. Jernigan

Eric A. Liepins

Commercial printing

Dragonfly Graphics, Inc.

6/14/21

No Data

20-10110

Gainesville, FL

11th

Northern FL Tallahassee

Karen K. Specie

Lisa Caryl Cohen

Screen & wide format printing

Chapter 7 Filings:

No Chapter 7 Filings Found this Month

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		2021 June - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues (US$Mil)	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		Brodock Press	8/5/21	No Data	Utica, NY	None	N/A	Jun-21	Commercial printing	Link
		Gateway Printing & Graphics	8/12/21	No Data	Hamburg, NY	None	N/A	Jun-21	Commercial printing	Link

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Packaging Industry Consolidation in Every Direction – July 2021 M&A Activity

August 7, 2021, 11:52 pm

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≪ Previous: Apollo Trades Textbooks for Wallpaper & Pillows – June 2021 M&A Activity

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There has been no pause, not even a brief breather, in the steam roller-like consolidation of the packaging-related printing businesses. The driving imperative is to consolidate production both horizontally to build out a global network to service global brands, as well as vertically to link supply chains to ensure material availability.

Clayton, Dubilier & Rice, one of the oldest private equity investment firms and a true pioneer in leveraged buyouts, announced the simultaneous purchase of Fort Dearborn and Multi-Color Corporation. The deal joins two of the most active consolidators of the label manufacturing segment, before the ink is even dry on their own respective acquisitions.

Fort Dearborn, backed since 2016 by Advent International, just completed the acquisition of Hammer Packaging in March. The Hammer Packaging deal brought production capabilities in cut & stack, in-mold, pressure sensitive, roll-fed and shrink sleeve labels and flexible packaging to Fort Dearborn. The transaction was significant in size for Fort Dearborn, it added 450 employees and two plants to the company’s existing 19 operations in North America.

Multi-Color Corporation, acquired by Platinum Equity in 2019, expanded its international reach, also in March 2021, with the acquisition of Herrods, a manufacturer of in-mold labels down under in Melbourne, Australia. Multi-Color brings a true global footprint to the new combined platform, with label plants in the US, Argentina, Australia, Belgium, Canada, Chile, China, France, Germany, Indonesia, Ireland, Italy, Kenya, Malaysia, Mexico, New Zealand, Philippines, Poland, Romania, South Africa, Spain, Switzerland, Tanzania, Thailand, United Kingdom and Vietnam. The only continent missing is Antarctica. This global network is the result of a decade of acquisitions, a veritable roll-up of roll-ups (see The Target Report: Platinum Equity Likes Print – February 2019).

The dealmakers at ProAmpac do not rest. ProAmpac, traditionally focused on consolidating the flexible packaging segment, has completed no less than seven acquisitions this year, in addition to the eight bolt-ons announced since being acquired by Pritzker Partners in 2016. Three of those deals were announced all within the past month. In addition to broadening its product line to include bags and pouches, ProAmpac has expanded vertically into its supply chain, most recently acquiring APC Paper Group in Claremont, New Hampshire. The acquired company manufactures 100% recycled kraft grade paper products, a key component in the recently acquired bag manufacturing companies (see The Target Report: Bags, Pouches, Trays & Bowls – December 2020). Earlier this year, ProAmpac completed a pair of acquisitions also vertically down into its supply chain, purchasing IG Industries and Brayford Plastics, both UK-based manufacturers of plastic films used in the production of bags and flexible packaging applications. After completing its latest flurry of deal activity, ProAmpac is approaching 50 sites globally, with nearly 5,800 employees in 90 countries.

Resource Label Group changed hands in July, trading out long-term PE supporter First Atlantic Capital for fresh investment from Ares Management, the formerly private, but now publicly traded buyout firm. Consistent with the non-stop rhythm of dealmaking in the packaging segments, Resource Label itself just completed the acquisition of Cypress Multigraphics, a label and nameplate company based in Tinley Park, Illinois. We expect that Ares Management is already eyeing up future acquisitions to continue building onto the Resource Label platform.

H.I.G. Capital is now in the label and flexible packaging business and is not wasting time. The Miami-based private equity behemoth, which has multiple investments across several print-centric business segments, entered the packaging mix in January 2021, mashing together two Southern California companies to form its new packaging platform, Signature Action Packaging (aka SAG). H.I.G. announced that SAG has purchased Chromatic Productions, a label and flexible packaging manufacturer, located in Irvine, California. It’s a start, and we expect more from SAG.

Japan’s largest printing company, Toppan, set forth in its most recent strategic plan that it would be accelerating a global expansion into the packaging business and establishing local production facilities. To that end, Toppan announced the acquisition of InterFlex Group, a manufacturer of films and pouches based in Wilkesboro, North Carolina. We can’t help being reminded of Canadian giant printing company TC Transcontinental’s strategic plan announced in 2014 to transition from primarily a publishing and publication printing company to focus on flexible packaging. TC Transcontinental began its makeover with a few modest deals and methodically pursued its strategic plan and eventually accomplished its goal with the 2018 purchase of Coveris Americas. TC Transcontinental is now a transformed company with a majority of its revenue derived from packaging products. With the red-hot market for labels and flexible packaging companies, Toppan is late to the game.

Commercial Printing

Mt. Royal Printing, a Baltimore-based commercial printing company, announced the acquisition of East Petersburg, Pennsylvania-based Spectrum Printing.* The transaction represents Mt. Royal’s first expansion outside of the greater Maryland, Washington, DC, Northern Virginia market. Offset production and finishing have been moved to the Baltimore plant, with East Petersburg now established as a new fulfillment center and sales office. Simultaneous with the Spectrum acquisition, Mt. Royal acquired Shuman-Heritage Printing, the related digital printing company formerly located in York, Pennsylvania and now tucked-in to the East Petersburg and Baltimore locations.*

Modern Litho, based in Jefferson City, Missouri, has acquired the commercial business of Watkins Lithographic in North Kansas City, Missouri. Modern had an existing Kansas City location based on a previous acquisition and had been seeking an opportunity to expand. Structured as a reverse tuck-in, Modern will be moving its Kansas City operation into the Watkins plant. Watkins has retained its flexo operations at a new location.

Industrial Printing

NFI, an industrial and label printing company based in New Bedford, Massachusetts, acquired PPS in Olathe, Kansas.† The acquired company specializes in custom printed industrial printed electronics, membrane switches, graphic overlays, labels, and specialty decals. Originally a US sales office for a UK-based company, Nameplates for Industry, NFI grew into an independent manufacturer with two plants in Massachusetts. This is NFI’s third acquisition, its first in the Midwest.

* Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to Mt. Royal Printing in these transactions.

† Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to PPS in this transaction.

   

2021 July - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1 (Surviving Entity)

Pre-Deal Revenues (US$Mil)

Party #1 Address

Deal Party #2

Pre-Deal Revenues (US$Mil )

Party #2 Address

Date Deal Public

Deal Value (US$Mil)

Deal Structure (Intermediary)

Notes

Press Release

Avery Dennison

$7,870

Glendale, CA

Vestcom (Port co. Charlesbank Capital Partners)

$400.0

Little Rock, AR

7/29/21

$1,450

Acquisition

Retail shelf markers

Link

Toppan Printing

$13,000

Tokyo, Japan

InterFlex Group

No Data

Wilkesboro, NC

7/28/21

No Data

Acquisition

Films & pouches

Link

Modern Litho

No Data

Jefferson City, MO

Watkins Lithographic

No Data

North Kansas City, MO

7/27/21

No Data

Acquisition

Commercial printing

Link

ProAmpac (Port co. Pritzker Partners)

No Data

Cincinnati, OH

Euroflex

No Data

Letterkenny, Ireland

7/27/21

No Data

Acquisition

Films & pouches

Link

Signature Action Packaging (Port co. H.I.G. Capital)

No Data

Commerce, CA

Chromatic Productions

No Data

Irvine, CA

7/22/21

No Data

Acquisition

Labels & flexible packaging

Link

ProAmpac (Port co. Pritzker Partners)

No Data

Cincinnati, OH

APC Paper Group

No Data

Claremont, NH

7/20/21

No Data

Acquisition (Mesirow)

Kraft paper manufacturing

Link

CCL Industries

$4,393

Toronto, ON

Plum Paper

$9.5

Oceanside, CA

7/16/21

$21.5

Acquisition

Personalized planners

Link

TCG Legacy (Port co. CORE Industrial Partners)

No Data

Chicago, IL

MedLit Graphics

No Data

Windsor, NJ

7/14/21

No Data

Acquisition (Sperry, Mitchell)

Pharma inserts & packaging

Link

Daily Gazette of Schenectady

No Data

Schenectady, NY

Leader-Herald of Gloversville (Prop. Ogden Newspapers)

No Data

Gloversville, NY

7/13/21

No Data

Acquisition

Community newspaper

Link

Circle Graphics (Port co. H.I.G. Capital)

No Data

Longmont, CO

Canvaspop

No Data

Ottawa, ON

7/13/21

No Data

Acquisition

Décor printing & framing

Link

Xaar

$66.5

Cambridge, UK

FFEI Limited

No Data

Hemel Hempstead, UK

7/13/21

$12.6

Acquisition

Inkjet technology

Link

Mt. Royal Printing (Advised by Graphic Arts Advisors)

No Data

Baltimore, MD

Shuman Heritage Printing

No Data

East Petersburg, PA

7/12/21

No Data

Acquisition (Graphic Arts Advisors)

Commercial printing

Link

Mt. Royal Printing (Advised by Graphic Arts Advisors)

No Data

Baltimore, MD

Spectrum Printing

No Data

East Petersburg, PA

7/12/21

No Data

Acquisition (Graphic Arts Advisors)

Commercial printing

Link

Ares Management

$3,100

Los Angeles, CA

Resource Label Group (Port co. First Atlantic Capital)

No Data

Memphis, TN

7/8/21

No Data

Acquisition

Label printing

Link

NFI Corp.

No Data

New Bedford, MA

PPS (Advised by Graphic Arts Advisors)

No Data

Olathe Kansas

7/7/21

No Data

Acquisition (Graphic Arts Advisors)

Industrial printing

Link

Craftsmen Industries

No Data

Saint Charles, MO

GDS Retail & Display Graphics

No Data

Bloomington, IL

7/6/21

No Data

Acquisition

Wide format printing

Link

Clayton, Dubilier & Rice

No Data

New York, NY

Fort Dearborn (Port co. Advent International)

No Data

Elk Grove, IL

7/2/21

No Data

Acquisition

Label printing

Link

Clayton, Dubilier & Rice

No Data

New York, NY

Multi-Color Corporation (Port co. Platinum Equity)

No Data

Cincinnati, OH

7/2/21

No Data

Acquisition

Label printing

Link

ProAmpac (Port co. Pritzker Partners)

No Data

Cincinnati, OH

Ultimate Packaging

No Data

Grimsby, UK

7/1/21

No Data

Acquisition

Flexible packaging

Link

 

  

2021 July - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries

Filing Party

Date Case Filed

Pre-Petition Revenues (US$Mil)

Case #

Filing Party Address

Circuit

Region & City

Judge

Attorney for Debtor

Notes

Chapter 11 Filings:

No Chapter 11 Filings Found this Month

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Chapter 7 Filings:

Clark Graphic Service, Inc.

7/29/21

No Data

21-46283

Troy, MI

6th

Eastern MI Detroit

Thomas J. Tucker

Karen E. Evangelista

Commercial printing

Mid Atlantic Graphix, Inc. dba Signal Graphics Printing

7/7/21

No Data

21-15544

Ocean View, NJ

3rd

New Jersey Camden

Andrew B. Altenburg Jr.

Bruno Bellucci, III

Printing & copying

		2021 July - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues (US$Mil)	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		Ultra Graphics	8/18/21	No Data	Columbus, NE	None	N/A	Jul-21	Commercial printing	Link
		Metro Web	8/15/21	No Data	North Bergen, NJ	None	N/A	Jul-21	Coldset web financial printing	Link
		Jam Printing	9/1/21	No Data	Elmsford, NY	None	N/A	Jul-21	Commercial printing	Link

The Target Report Annual Review – August 2021 TTM M&A Activity

September 8, 2021, 8:03 pm

≫ Next: Private Equity Fuel$ Consolidation of Label Industry – September 2021 M&A Activity

≪ Previous: Packaging Industry Consolidation in Every Direction – July 2021 M&A Activity

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As readers of The Target Report know, we view the printing, packaging, and related industries from the perspective of M&A transactional activity. Over the past ten years, we have chronicled, logged, and commented on the robust merger and acquisition activity in the print-centric business segments. We traditionally take a break at this time of the year, depart from our usual review of the prior months’ deal activity, and take a look back at the past twelve months from a high-level macro perspective. Our goal is to identify some long-term trends. Which segments have experienced more, or less, deal activity? What are the trends in rationale behind these acquisitions? Are acquirers adding facilities to their networks, or opportunistically folding acquisitions into their existing facilities?

We review, categorize, sort, count and chart the data we have collected, comparing the trailing twelve months (“TTM”) ended this August to the prior twelve months. This year, we have added the prior two years in order to bridge the pandemic period and illustrate the comparison between pre-pandemic, pandemic, and the beginning of the post-pandemic business climate in the printing, packaging and related industries.

In M&A terms, the past twelve months were decidedly busier than the twelve months ended August 2020. We identified approximately 13% more transactions than last year; almost the exact match in the number of transactions during the pre-pandemic year: our data is based on 215 M&A transactions of interest for the TTM August 2021, versus 191 last year this same time, and 214 for the TTM August 2019.

As illustrated in the chart below, deal activity spiked upwards in the autumn of 2018 and again at the beginning of 2020. For reasons that were never clear, at least not to us, there was a pronounced slump in deal activity during the beginning months of 2019. Activity returned to the norm in the Spring of that year. Most dramatic and no surprise to anyone, there was a decline in transactions during March and April of 2020 when Covid-19 broke out and much business and social activity came to a screeching halt. By August of 2020, the deal activity trend had returned to the norm and has continued apace over the past twelve months.

Looking at the gross numbers of M&A deals provides a view of overall transactional activity. However, as we know, the printing industry is not monolithic, rather the placement of images via ink onto a variety of substrates is comprised of a complex mix of specialties, including direct mail, wide format, industrial printing, and several forms of packaging, in addition to the more generalized commercial printing business. In our search to understand the market better, we categorize all the deals we have logged over the past year by segment. We then dig deeper into the packaging, commercial printing, direct mail and wide-format printing businesses, illustrating the rationale behind all this deal activity, by segment. We also seek to understand where the challenges are most pronounced by studying bankruptcy filings and non-bankruptcy plant closings.

The next chart breaks down the transactions over the past three years into all the segments we track in The Target Report.

Commercial Printing

Our annual deep dive into the rationale behind the transactions in the commercial printing segment reveals once again that deals structured as a tuck-in represent a significant portion of the total. In these tuck-in transactions, the customers of the acquired company are transitioned to the buyer’s production facility. 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, and possibly cherry-picking certain equipment that is needed or desirable for the smooth continued servicing of the acquired customers. In three instances out of the fourteen tuck-ins during the past year, 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. As a percentage of total deals announced in commercial printing, tuck-ins represented 48% this past year, compared to 44% last year. This compares to the 70% of the commercial printing deals that were tuck-ins during the twelve months ended August 2019. This drop off from two years ago indicates to us that some of the excess capacity in the market, as evidenced by tuck-in transactional activity, has been wrung out. However, at close to 50%, the number of tuck-ins tells us that the market signals are still flashing red in the commercial printing segment and there will be much more consolidation to come.

There were fifteen acquisitions in the commercial printing segment where the acquired facility was important to the buyer and will remain in operation, as-is-where-is. Five of these were sold to new owners that were not previously invested in the commercial printing industry, while ten represented an additional facility for an existing company seeking to expand operations. The following chart shows how the past three years compare, showing tuck-ins, existing businesses adding facilities, and new entries into the commercial printing business.

Digging a little deeper, we looked for instances in which buyers cited geographic expansion and/or added services as the rationale behind their acquisitions, as well as whether a private equity sponsor was involved. Expanding service territory was the reason most often mentioned, two-to-one over adding a new service, clearly a departure from the trend of the past two years. Notably, many of the transactions were part of a clearly expressed strategy to grow regionally in a hub-and-spoke fashion with a core financially strong commercial printing company at the center (see The Target Report: Commercial Printing: Consolidation or Regional Expansion? – November 2019). This regional consolidation trend has been in contrast to the national roll-up strategy from the now acquired and absorbed (CGX) and disintegrated (Cenveo) roll-ups from years past.

Many owners we talk with in the commercial segment are experiencing a steady, albeit modest, improvement, as the impact of the pandemic recedes. Owners that put their exit plans on hold are beginning to come back into the market, not waiting until they recover completely to pre-pandemic levels. Weaker players have begun to falter and seek shelter in a sale to a stronger company. We believe that M&A activity will increase in the commercial segment over the next several years. Consolidation will pick up steam as the impact of government subsidies fades and the demographic imperative of an aging population of owners prevails over holding out for better days.

Private equity continues to have lukewarm interest in the commercial printing segment. We noted four commercial print transactions in which private equity played a part during the past year, a similar count to past years. We suspect that at least one of the PE-backed transactions is more of a turnaround play rather than a platform-and-build-out-via-acquisition strategy.

We make special mention this year of a notable transaction in the commercial printing segment, backed by JAL Equity, representing the first new PE-backed platform in commercial printing in several years. Having quietly assembled a network of commercial printing and related businesses over the past couple years, JAL Equity announced a blockbuster deal this past month to acquire the remaining commercial printing business of Cenveo, forming ColorArt, a new national consolidator. With the other national buyer, Mittera, still actively acquiring commercial printing companies across the US, the industry once again has two national consolidators. Both appear to be more disciplined and selectively opportunistic than their predecessors.

Packaging

For the second year in a row, packaging has now surpassed commercial printing as the most active segment. There does not appear to be any let up in buyer appetite for packaging companies. As we noted recently, packaging deal activity is red hot, with a slew of private equity investment funds driving transaction multiples up as they compete to consolidate what has been a highly fragmented business, often family-owned and spanning two or more generations.

The following chart is illustrative of buyer activity in the packaging business, broken down by primary product produced at the target company. Label manufacturing again leads the pack, shooting way up this past year. The number of transactions in the corrugated box segment has been trending down; we suspect because the low-hanging fruit has already been picked, not because there are any fewer boxes showing up on our front porches. Similarly, we regularly hear from buyers that are eagerly seeking target companies in the flexible packaging segment, but fewer deals are getting done involving flexible packaging as the supply of target companies is limited compared to other packaging segments. Also worth noting is the uptick in transactions in which folding cartons are the primary product of the target company. We expect that trend to continue as private equity funds seek alternatives to the higher multiples in the label and flexible packaging businesses, as well as in response to social trends extolling the use of more sustainable fiber-based packaging.

Our candidate for the most notable and influential singular transaction in the packaging segment during the past twelve months has to be the recently announced deal in which PE firm Clayton, Dubilier & Rice announced the simultaneous purchase and combination of label manufacturing companies Fort Dearborn and Multi-Color Corporation (see The Target Report: Packaging Industry Consolidation in Every Direction – July 2021). The result is a vast network, a roll-up of roll-ups, comprised of the remnants of many formerly independent, and often family-owned, label manufacturing companies.

When we dig into the rationale behind transactions in the packaging segment, a very different picture emerges as compared to commercial printing. Of the fifty-six transactions that we recorded over the past twelve months in the packaging segment, only two were reported to be tuck-ins; both were small and produced labels. 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. Eleven of the packaging companies were sold to new owners that were not currently invested in this segment, a dramatic increase from past years.

Private equity was involved in forty-one of the fifty-six transactions in packaging, a staggering 73% of the total, as compared to 37% and 55% over the past two years, respectively. The roll-up model, with financial sponsorship from private equity, is in full swing across the various packaging segments and as mentioned above, driving competition for midsize and larger label printing companies to a frenzied level of activity. Adding to the hustle, eight new PE-backed platforms were formed over the past year, as compared to only one last year and none the year before.

Thirteen of the buyers noted that the acquisition brought new services to the company, or significantly expanded on a small beachhead previously established in that service. For example, one folding carton company noted that an acquisition brought significant blister card production to their product mix, as well as adding volume to their core business, folding cartons. In twenty-eight instances, geographic expansion or diversity of the acquired locations was also noted as a key element in the buyer’s logic.

Wide Format and Related Digital Products

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 and related products from the more generalized commercial printing segment.

The wide-format market has matured. Gone are the days of the uniqueness of digitally printed banners and wraps, the cool factor of flatbeds and the easy margins that came with being first on the block to offer large inkjet prints. Pricing on entry-level equipment has come way down, finishing technology is automated, and overall barriers to entry are low. Differentiation has moved from first-mover advantage to more complex online direct-to-customer systems, robust installation capabilities, or value-added services such as framing prints for use as home or office décor.

Our selection for most transformative transaction in the wide-format and related products segments over the past year is Shutterfly’s acquisition of Spoonflower. Backed by Apollo Global Management, the deal illustrates the investment community’s interest and confidence in custom-printed products, the aggregation of the segment (previously bolt-ons included Snapfish) and diversification of wide-format applications to include one-of-a-kind apparel, custom designed fabrics and personalized wall décor. (see The Target Report: Apollo Trades Textbooks for Wallpaper & Pillows – June 2021).

In the wide-format and related products segment, there are proportionately fewer tuck-ins than in general commercial printing, but consistent with the past two years, about a quarter of the deals were tuck-ins, with the seller’s plant shuttered and production consolidated in the buyer’s existing facility. The tuck-ins are indicative of excess capacity and the maturation of the wide-format segment; for many years there were none. Another indication of the wide-format market reaching saturation is no new entrants, all the buyers over the past year were already in the business in one form or another.

Seven buyers cited adding or greatly expanding wide format as a service offering as the logic supporting their acquisition. Same as last year, two buyers noted geographic expansion as important to their decision to move forward. Seven of the transactions involved participation by private equity in the deal, but none were new platforms for the fund. We continue to believe that the trends in wide-format and related printing, especially the involvement of financial buyers and the increase in number of distressed transactions, are predictive of more M&A activity and consolidation for wide-format printing companies.

Direct Mail

Direct mail printing companies, especially those that can manage, manipulate, store, and utilize data to drive improved results for their customers, are an exception and in a class by themselves, apart from the more generalized undifferentiated “job-shop” commercial printing companies. Therefore, we break these companies out separately.

Transactional activity in the direct mail printing segment was steady over the past twelve months, with a total of eight deals announced, versus nine the prior year. Indicative of the overall health of the segment, there were no tuck-ins, and in every case the buyers cited adding a facility to increase capacity as the reason to acquire. However, there were no new entrants into the segment, a sign that current owners are confident and willing to invest in acquisitions, but outsiders are holding onto their wallets.

Our choice of the notable transaction of the year in the direct mail segment is Moore’s acquisition of Worchester Envelope in Auburn, Massachusetts. The 125-year-old acquired company operates out of a 180,000 square foot facility, offering a diverse range of converting and printing options. This follows Moore’s investment in and resurrection of the failed Colortree printing business in Richmond, Virginia which had been a major supplier of specialty envelopes to the non-profit solicitation businesses surrounding the Washington DC region. A huge user of envelopes, the move to secure its own specialized envelope production facilities provides a defensive position for Moore as envelope production consolidates.

Only one of the transactions in direct mail involved private equity backers, and there were no new PE-backed platforms. In five of the eight transactions we found, the buyers mentioned adding a service element as their rationale to move forward with the deal. At least for now, the direct mail industry appears to be plowing forward, steady-as-she-goes, not racing forward like packaging, nor lagging behind as is the case with commercial printing.

Challenged Segments

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 continues to be true in the commercial printing segment.

Conversely, segments in which the number of transactions is inversely correlated to closures and bankruptcies are more likely to be expanding. Therefore, 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 packaging industry consolidates. As noted above, the market for label manufacturing businesses has heated up considerably over the past several years.

Despite the outbreak of Covid-19, the number of bankruptcies for the past twelve months across all segments decreased to 29 filings, down from 38 and 41 over the prior two years, respectively. We attribute this decrease to the huge cash infusions into businesses over the past year, structured as forgivable PPP loans and other forms of government stimulus. Another factor is likely the high cost of going through a bankruptcy proceeding versus simply winding down a business without the formal filing. As expected, even at the reduced level of bankruptcy filings, the commercial printing segment leads the pack. Of interest, bankruptcies in publishing decreased, presumably the market has been rationalized, at least for the time being. Consistent with our observations above about the wide-format segment, there was a notable uptick in bankruptcy filings.

And finally, we also track activity in non-bankruptcy plant closures; some companies simply close up and just disappear while others find a buyer for the book-of-business and conduct an orderly wind-down process. A closure does not always 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 bankruptcy filing data, the number of non-bankruptcy closures in the past twelve months declined to 33, down from 45 and 49 over the past two years, respectively. As expected, general commercial printing companies represent the majority of printing facilities closing up shop. Also not surprisingly, newspaper printing plants and publication/catalog plants also closed in greater numbers than most other segments.

2021 August - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1 (Surviving Entity)

Pre-Deal Revenues (US$Mil)

Party #1 Address

Deal Party #2

Pre-Deal Revenues (US$Mil )

Party #2 Address

Date Deal Public

Deal Value (US$Mil)

Deal Structure (Intermediary)

Notes

Press Release

Elvaston Capital Management

No Data

Berlin, Germany

DOCUFY (Div. Heidelberg)

No Data

Heidelberg, Germany

8/31/21

No Data

Acquisition

Product information software

Link

Reno Type

No Data

Reno, NV

CDMS

No Data

Sparks, NV

8/26/21

No Data

Acquisition

Commercial printing & promo

Link

Magnum Opus Acquisition (Port co. L2 Capital)

No Data

Hong Kong

Forbes Global Media (Port co. Integrated Whale Media )

No Data

New York, NY

8/26/21

$630.0

SPAC Acquisition

Magazine publishing

Link

Allegra Winston-Salem

No Data

Winston-Salem, NC

Goslen Printing

No Data

Winston-Salem, NC

8/24/21

No Data

Acquisition

Commercial printing

Link

C-P Flexible Packaging (Port co. First Atlantic Capital)

No Data

York, PA

Fruth Custom Packaging

No Data

Placentia, CA

8/24/21

No Data

Acquisition

Bags & films

Link

Kongsberg PCS (Port co. OpenGate Capital)

No Data

Gent, Belgium

MultiCam

No Data

Dallas, TX

8/23/21

No Data

Acquisition

Digital finishing equipment

Link

ColorArt (Port co. JAL Equity)

No Data

Eureka, MO

Commercial Print Business (Div. Cenveo)

No Data

Stamford, CT

8/18/21

No Data

Acquisition

Commercial printing

Link

Hachette Book Group

$839.0

New York, NY

Workman Publishing

No Data

New York, NY

8/16/21

No Data

Acquisition

Trade book publishing

Link

Graphic Village (Port co. Revitalize Capital)

$22.0

Cincinnati, OH

T-Max Graphics

No Data

Muncie, IN

8/16/21

No Data

Acquisition

Wide format printing

Link

Resource Label Group (Port co. Ares Management)

No Data

Memphis, TN

Tek Label and Printing

No Data

Milpitas, CA

8/12/21

No Data

Acquisition

Label printing

Link

Mac Papers + Packaging (Port co. Monomoy Capital)

$600.0

Jacksonville, FL

Dependable Packaging Solutions

No Data

Miami Lakes, FL

8/10/21

No Data

Acquisition

Corrugated distribution

Link

Freedom

$163.5

Milton, WI

Suncraft Technologies

No Data

Naperville, IL

8/9/21

No Data

Acquisition

Direct mail printing

Link

Architect Equity

No Data

El Segundo, CA

The Mail Group (Div. bpost Group)

No Data

Elk Grove Village, IL

8/5/21

No Data

Acquisition

Fulfillment & mailing services

Link

Repacorp

$49.0

Tipp City, OH

T&T Graphics

$8.5

Miamisburg, OH

8/4/21

No Data

Acquisition

Label & wide format printing

Link

Inovar Packaging Group (Port co. AEA Investors)

No Data

Dallas, TX

Precision Label

No Data

Oceanside, CA

8/3/21

No Data

Acquisition

Label printing

Link

C-P Flexible Packaging (Port co. First Atlantic Capital)

No Data

York, PA

Prestige-Pak

No Data

Fond du Lac, WI

8/3/21

No Data

Acquisition (TKO Miller)

Flexible packaging

Link

Geiger

No Data

Lewiston, ME

ProCorp Images

No Data

Englewood, CO

8/2/21

No Data

Acquisition

Promotional distributor

Link

2021 August - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries

Filing Party

Date Case Filed

Pre-Petition Revenues (US$Mil)

Case #

Filing Party Address

Circuit

Region & City

Judge

Attorney for Debtor

Notes

Chapter 11 Filings:

Brown Industries

8/20/21

No Data

21-41020

Dalton, GA

11th

Northern GA Atlanta, GA

Paul W. Bonapfel

Matthew W. Levin

Retail displays

Four Wood Consulting and Publishing LLC dba Around the House Publishing

8/24/21

No Data

21-18183

West Palm Beach, FL

11th

Southern FL W. Palm Beach

Erik P. Kimball

David L. Merrill

Retail shoppers & commercial printing

Chapter 7 Filings:

A. Maciel Printing LLC

8/25/21

No Data

21-41089

San Francisco

9th

Northern CA Oakland

Roger L. Efremsky

Eric M. Boeing

Commercial printing

  

		2021 August - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues (US$Mil)	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		IWCO Direct - Printing & mailing facility	12/31/21	No Data	Little Falls, MN	IWCO Direct	Chanhassen, MN	8/26/21	Direct mail printing, mailing & commingling	Link
		Production Press	9/16/21	No Data	Jacksonville, IL	None	N/A	Aug-21	Commercial printing	Link

Private Equity Fuel$ Consolidation of Label Industry – September 2021 M&A Activity

October 6, 2021, 9:46 pm

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It’s a feeding frenzy in the prime label printing and converting business. Fueled by multiple private equity-backed roll-up platforms, the activity has been non-stop and does not appear to be ready to slow down until all the prime fruit has been picked.

Resource Label Group, which itself changed hands in July, was back at the closing table in September, announcing two more acquisitions in addition to the acquisition of Tek Label and Printing in August. In its most recent deal, Resource Label acquired Ample Labels based in Nixa, Missouri. The acquired company is a digital and flexographic printer of prime labels for the food, health, personal care, industrial, pharmaceutical and beverage markets. Only four days earlier, Resource Label announced the purchase of StickerGiant.com, a producer of labels and stickers sold via an online storefront. StickerGiant.com would appear to fill a space at the lower end of the market, serving small companies, somewhat of a departure in the label roll-up space which has been focused on higher volume label manufacturers.

While not the only private equity-backed consolidator in the label industry, Resource Label is an exemplar of how the process of secondary, and now tertiary, buyouts by professional investment companies have provided the financial fuel needed to run a virtually non-stop acquisition process. At Resource Label, the buyout professionals did not skip a beat after the company switched financial sponsors from First Atlantic Capital to Ares Management; the team completed three acquisitions in less than three months.

Resource Label Group is not the only PE-fueled platform consolidating the label industry, nor is it the only platform that has flipped multiple times from one financial sponsor to another. Fort Dearborn was established in 1925 as a general printing company. By 1930, the founder had decided that printing labels was the business to be in, and other than a diversion during World War II to print top-secret strategic topographic maps for the war effort, Fort Dearborn has been focused on labels, shrink sleeves and related products. Fort Dearborn is now owned by Clayton, Dubilier & Rice, its fourth financial sponsor. The seller of Fort Dearborn, Advent International, acquired the company in 2016 from KRG Capital Partners, which previously acquired the company from Genstar Capital in 2010, which previously acquired the company from the individual non-institutional owners in 2006. At the time of its entry into the world of private equity backed growth, Fort Dearborn had six plants and revenue of $190 million, and with this latest deal is now part of a $3 billion revenue roll‑up of roll‑ups.

Simultaneous with the purchase of Fort Dearborn, PE firm Clayton, Dubilier & Rice also purchased Multi‑Color Corporation from Platinum Equity. Multi‑Color, now a global producer of labels, was established in 1916 as a manufacturer of sheet‑fed three‑color printing presses. The owners soon decided to pivot and transitioned to printing labels rather than making the machines. A seminal event in the company’s history was the development in 1980 of the in‑mold label technology, in which labels are applied to plastic containers as the containers are being formed in the mold. Platinum Equity purchased Multi‑Color in a take‑private transaction in 2019, ending Multi-Color’s listing as a public stock which dated back to 1987. (For more, see Packaging Industry Consolidation in Every Direction – July 2021).

In addition to the above mentioned PE funds, there are others also chasing label companies: Mason Wells, a private equity fund based in Milwaukee, just formed another entry into the PE-backed roll-up of the label business with the dual acquisition of KDV Label in Waukesha, Wisconsin and its sister company I-Graphics, based in Loveland, Colorado. An additional recent entry into the mix is the mega fund H.I.G. Capital, no stranger to print-centric businesses. This past summer, H.I.G. acquired label and flexible packaging company Chromatic Productions, establishing its label platform company. Dunes Point Capital, based in Rye, New York, started out small and launched its label roll‑up platform with the acquisition of Label Graphics Manufacturing in Little Falls, New Jersey. Not to be left out, in December 2020, Morgan Stanley Capital Partners acquired AWT Labels & Packaging from Mason Wells (yes, that Mason Wells, the same PE fund that just jumped back into the label business last month).

And let’s not leave out Brook & Whittle, the label platform now owned by Snow Phipps Group, which acquired the company in 2017 from RFE Investment Partners and Charter Oak Equity. Other PE-backed acquisition platforms in the label segment include Inovar, based in Dallas, with financial sponsorship from AEA Investors, and Fortis Solutions Group, based in Virginia Beach and operating 14 plants across the US, with financial backing from Main Post Partners.

Not all transactions in the label manufacturing segment are driven by large private equity-backed roll‑ups. The Kennedy Group, a family-owned and family-managed manufacturer of labeling and packaging, acquired the business of Color Label in St. Louis, Missouri.* Based in Willoughby, Ohio, The Kennedy Group has production capabilities in pressure sensitive labels, roll-fed film, digital labels, and RFID labels and is actively seeking opportunities to grow via strategic acquisitions, offering an alternative to the PE-backed roll-ups.

Direct Mail and Commercial Printing

Postal Center International, a direct mail shop in Weston, Florida, announced the acquisition of Arrowmail in nearby Miami. In addition to direct mail services, PCI processes transactional print and provides presort services. The company recently announced its plan to establish a series of regional sites across the country, starting with a leased 100,000 square foot facility in San Antonio, Texas. According to the CEO, the company is seeking to “drive scale quickly, not only in San Antonio but also in other high-impact and highly centralized regions around the country” as part of the company’s nationwide expansion of regional office, production and presort mailing sites. Based on our conversations and mandates with other owners in the direct mail and transactional print segments, we suspect that PCI’s strategy of expanding direct mail production capability across several regions is being driven in direct response to the slowdown in US postal delivery time standards.

The commercial printing segment was noticeably quiet in September, with the exception of the acquisition of Taylored Printing by Richmond, Virginia-based Worth & Higgins, a diversified print provider of sheetfed offset, digital printing, wide format, and signage.

There has been a notable, but not yet dramatic, increase in the number of commercial printing companies filing bankruptcy, the majority of which have filed under Chapter 7 of the Code, which means the company is being liquidated without the opportunity to reorganize as is allowed under Chapter 11. This increase in bankruptcies has been expected since the outbreak of Covid-19, forestalled by the distribution and forgiveness of the ubiquitous PPP loans, the benefit of which is likely now, or soon will be, exhausted. Another factor that may increase pressure on financially challenged companies, especially within the commercial printing segment which has its own unique headwinds, is the unwinding of Covid-support measures which is likely to lead to an increase in the number of loans classified as non-performing, with corresponding increased pressure from lenders on borrowers.

Promotional

Commercial printing companies have increasingly been offering promotional and specialty advertising items to their customers. What was once a separate differentiated business is now being included in the integrated mix of marketing production and support services under the umbrella of many commercial printing companies.

Grossman Marketing, a 111-year old Massachusetts company, acquired Symbol Marketing & Promotions. Founded in 1910 by the current owners’ great grandfather as the Massachusetts Envelope Company, the company has transitioned from envelope manufacturing to a pure promotional products and print distributorship business model. The current acquisition is the Grossman brothers’ eighth, all of which strategically support its asset-light service model.

Reno Type, a printing and mailing company, acquired CDMS, a promotional products distributor in nearby Sparks, Nevada. BR Printers, based in San Jose, California, a commercial printing and book manufacturing company with extensive production capabilities, certainly not an asset-light company, acquired Casa del Mar, a San Diego-based promotional products distributor. While not every commercial printing company is embracing the promo business, the trend towards becoming an integrated marketing service provider will continue, often via an acquisition strategy.

* Graphic Arts Advisors, publisher of The Target Report, provided outreach to identify the opportunity and served as exclusive advisors to The Kennedy Group in this transaction.

   

2021 September - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1 (Surviving Entity)

Pre-Deal Revenues (US$Mil)

Party #1 Address

Deal Party #2

Pre-Deal Revenues (US$Mil )

Party #2 Address

Date Deal Public

Deal Value (US$Mil)

Deal Structure (Intermediary)

Notes

Press Release

Grossman Marketing

No Data

Somerville, MA

Symbol Marketing & Promotions

No Data

Manchester, NH

9/27/21

No Data

Acquisition

Promo products distributor

Link

CherryRoad Media

No Data

Parsippany, NJ

Leavenworth Times (13 titles) (Prop. Gannett)

No Data

Leavenworth, KS

9/24/21

No Data

Acquisition

Community newspapers

Link

The Kennedy Group (Advised by Graphic Arts Advisors)

No Data

Willoughby, OH

Color Label

No Data

St. Louis, MO

9/23/21

No Data

Asset Acquisition (Graphic Arts Advisors)

Labels printing

Link

Resource Label Group (Port co. Ares Management)

No Data

Franklin, TN

Ample Labels

No Data

Nixa, MO

9/21/21

No Data

Acquisition

Labels printing

Link

Resource Label Group (Port co. Ares Management)

No Data

Franklin, TN

StickerGiant.com

No Data

Longmont, CO

9/17/21

No Data

Acquisition

Label printing & online store

Link

The Harlan Newspapers (sub. Blackbird)

No Data

Harlan, IA

Glenwood Opinion-Tribune (Prop. Paxton Media Group)

No Data

Glenwood, IA

9/16/21

No Data

Acquisition

Community newspapers

Link

Mason Wells

No Data

Milwaukee, IL

I-Graphics

No Data

Loveland, CO

9/16/21

No Data

Acquisition (Taureau Group)

Label printing & converting

Link

Mason Wells

No Data

Milwaukee, IL

KDV Label

No Data

Waukesha, WI

9/16/21

No Data

Acquisition (Taureau Group)

Label printing & converting

Link

Monotype Imaging Holdings

No Data

Woburn, MA

Hoefler & Co

No Data

New York, NY

9/15/21

No Data

Acquisition

Type foundry (fonts)

Link

Postal Center International

$200.0

Weston, FL

Arrowmail

No Data

Miami, FL

9/15/21

No Data

Acquisition

Direct mail printing

Link

PPC Flexible Packaging (Port co Morgan Stanley Capital)

No Data

Buffalo Grove, IL

Consumer Packaging Group

No Data

Hartland, WI

9/10/21

No Data

Acquisition (TKO Miller)

Packaging prototypes

Link

Lone Star Funds

No Data

Dallas, TX

XSYX (Div. Flint Group)

No Data

Stuttgart, Germany

9/8/21

No Data

Acquisition

Plates & prepress equipment

Link

Worth & Higgins

$33.0

Richmond, VA

Taylored Printing

No Data

Yorktown, VA

9/3/21

No Data

Acquisition

Commercial printing

Link

Reno Type

No Data

Reno, NV

CDMS

No Data

Sparks, NV

9/2/21

No Data

Acquisition

Promo products distributor

Link

BR Printers

$21.6

San Jose, CA

Casa del Mar

No Data

San Diego, CA

9/1/21

No Data

Acquisition

Promo products distributor

Link

H.I.G. Capital

No Data

Miami, FL

Jackson Paper Manufacturing

No Data

Sylva, NC

9/1/21

No Data

Acquisition

Recycled paper manufacturing

Link

   

2021 September - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries

Filing Party

Date Case Filed

Pre-Petition Revenues (US$Mil)

Case #

Filing Party Address

Circuit

Region & City

Judge

Attorney for Debtor

Notes

Chapter 11 Filings:

The Harman Press Inc.

9/20/21

No Data

21-11544

North Hollywood, CA

9th

Central CA Woodland Hills

Maureen Tighe

Thomas B. Ure

Commercial printing

Chapter 7 Filings:

Allegiant Marketing Group aka AMG

9/27/21

No Data

21-12573

Edmond, OK

10th

Western OK Oklahoma City

Sarah A. Hall

Dekovan L. Bowler

Marketing & direct mail

Colorado Litho, Inc.

9/22/21

No Data

21-14850

Westminster, CO

10th

Colorado Boulder

Elizabeth E. Brown

Robert S. Sutton

Commercial printing

Target Printing and Graphic Communications Inc.

9/17/21

No Data

21-17316

Rochelle Park, NJ

3rd

New Jersey Newark

Vincent F. Papalia

David L. Stevens

Printing & copying

Graphics Now, Inc.

9/15/21

No Data

21-02393

Greenville, SC

4th

South Carolina Columbia

Helen E. Burris

Randy A. Skinner

Commercial printing

   

		2021 September - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues (US$Mil)	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		RR Donnelley  - Printing facility	11/30/21	No Data	Lewisburg, PA	RR Donnelley	Chicago, IL	9/20/21	Commercial printing (Formerly Moore Wallace facility)	Link
		Unique Impressions Printing	11/4/21	No Data	Phoenix, AZ	None	N/A	Sep-21	Commercial printing - trade shop	Link
		F.P. Horak	11/11/21	No Data	Bay City, MI	None	N/A	Sep-21	Commercial printing	Link
		El Paso Times - Printing facility	10/4/21	No Data	El Paso, TX	Gannett	McLean, VA	9/10/21	Print production moving to Juarez, Mexico	Link

The End of the Dotcom Era – October 2021 M&A Activity

November 7, 2021, 9:15 pm

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≪ Previous: Private Equity Fuel$ Consolidation of Label Industry – September 2021 M&A Activity

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The printing industry had its own dotcom boom and bust. It was at the end of the last millennium and the big Print show held at McCormick Place in Chicago was all abuzz about the dotcom companies that were invading the industry. These upstarts were making big promises that they represented the new way that printers and their customers would come together via automated internet-based platforms. The star of the show was printCafe, a newly agglomerated collection of acquired existing printing management information systems. With a hipster booth, all decked out in coffee brown and a clever steaming cup of coffee logo, the prime show location was mobbed. Some attendees, myself included, were trying to understand what it meant now that my printing company’s MIS system had been acquired by and was part of a dotcom darling. Did I really want this upstart coming between my company and our customers? Exactly who did they intend to serve, printers like me or our customers? I knew right away that the reverse auction feature did not sound good. 

Along the back wall was another dotcom startup promising to change the world of printing. They called themselves Noosh, a whimsical name with a correspondingly whimsical logo. At the time, it was not exactly clear what they intended their software to do for printers, or maybe do to printers. But it certainly was exciting. The dotcom craze was in full swing and every day a new company appeared ready disrupt another industry, from books to pet food (as we now know, the book thing worked out, the pet food thing did not). Printing was just next in line. It’s been two decades since the internet bubble burst in 2000, dotcom stocks crashed, high-flying companies evaporated overnight, and internet companies lost an aggregate 75% of their value in six months. 

PrintCafe missed the boat, planning to go public in March 2000, the same month that the warning flags went up that many of the dotcom companies were burning cash with no prospect of making a profit. Not to be dissuaded, and still burning cash, printCafe went public the next year, eventually earning the position as the second-worst initial public offering of 2002, losing 90% of its initial offering price. As it turned out, not much changed with the MIS systems. Progress came to a virtual halt with the MIS systems until eventually EFI acquired printCafe. EFI dropped the caffeine-inspired theme and began the difficult job of making sense out of the disparate members of the coffee clutch. 

Noosh somehow made it through and survived, morphing into a marketing execution and procurement system. The logo grew up, as did the business, recently reported to have in excess of $1.2 billion of spending coursing through the Noosh system on the way to printing and promotional suppliers. The audience for Noosh is now clear, large corporate enterprise marketing departments and advertising agencies are each offered a version to support their procurement of marketing materials and control costs. Printing companies need not apply. 

The Noosh website still promotes the dreaded reverse auction, a very unpopular (among printers), but common, feature of early internet-based print purchasing platforms, in which participating printers get the privilege of finding out which company will lower their price the most. 

HH Global, the UK-based print and marketing management company, announced the purchase of Noosh, touting that the combination of the companies “will allow both businesses to leverage greater aggregated spend under management.” The purchasing power of HH Global is not welcome at many printing companies when they find out that their formerly loyal customers have outsource the print buying decision to a global behemoth whose very existence is based on relentlessly squeezing down suppliers’ margins. The acquisition of Noosh comes a little more than a year after HH Global took out Innerworkings, its major competitor in the print management business (see Buyers are On The Move and On Track, Marketing Execution (Print Management) – July 2020). 

Much has changed since the dotcom boom and bust. Printing companies still have direct relationships with many of their customers. The promise of printCafe and Noosh did not play out as their founders thought and promised back in Chicago. However, as it turns out, a significant portion of the spend on printing and related marketing materials was disrupted and is now controlled by a global intermediary using internet-based technology. 

Commercial Printing

Allan Creel, formerly the owner of Creel Printing, is back in the game with the purchase of Fenske Media in Rapid City, South Dakota. Creel was an early devotee of on-demand digital printing technologies within the commercial printing segment, acquiring New Jersey-based GlobalSoft Digital Solutions back in 2015, a quantum-jump in distance and technology from the large offset printing facility the company had in Las Vegas. Creel Printing grew to six locations, $120 million in revenue, and approximately 700 employees, before selling out to LSC Communications in 2017. In another stop on a long and winding road, in 2020 Creel bought back his namesake company in a 363-asset sale from LSC Communications when LSC entered bankruptcy. That did not last long and select assets of the company were sold to national consolidator Mittera Group less than five months later and the Las Vegas operation was shut down. People in the printing industry often say the ink gets in your blood and no matter how hard you try the industry draws you back in. It seems that Allan Creel would agree. 

Packaging

Private equity firms continued their love affair with the packaging industry. Roll-ups are combined with other roll-ups and PE funds complete secondary and even tertiary buyouts from other funds (see Private Equity Fuel$ Consolidation of Label Industry – September 2021 and also Packaging Industry Consolidation in Every Direction – July 2021). 

Fortis Solutions Group, with backing for several years from Main Post Partners, was acquired in a secondary buyout funded by Harvest Partners. Four days before the announced switch of financial sponsors, Fortis itself acquired Quality Tape and Label, a manufacturer of labels and shrink sleeves in Marietta, Georgia. 

In another secondary buyout, Chicago-based private equity fund GTCR acquired PPC Flexible Packaging. PPC Flexible Packaging had built up a network of ten manufacturing facilities in the US and South America in just four years, backed with funding from Morgan Stanley Capital. 

C-P Flexible Packaging, a portfolio company of First Atlantic Capital, acquired Preferred Packaging, a producer of flexible packaging film in Norcross, Georgia. Rohrer, with financial backing by Wellspring Capital, announced the purchase of Coburn Carton Solutions, a manufacturer of folding cartons based in Hayesville, OH.

 

2021 October - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1 (Surviving Entity)

Pre-Deal Revenues (US$Mil)

Party #1 Address

Deal Party #2

Pre-Deal Revenues (US$Mil )

Party #2 Address

Date Deal Public

Deal Value (US$Mil)

Deal Structure (Intermediary)

Notes

Press Release

Hybrid Software Group

No Data

Cambridge, UK

ColorLogic

No Data

Rheine, Germany

10/28/21

No Data

Acquisition

Color profile software

Link

Allan Creel

No Data

Las Vegas, NV

Fenske Media

No Data

Rapid City, SD

10/26/21

No Data

Acquisition (New Direction)

Commercial printing

Link

C-P Flexible Packaging (Port co. First Atlantic Capital)

No Data

York, PA

Preferred Packaging

No Data

Norcross, GA

10/22/21

No Data

Acquisition

Flexible packaging films

Link

Lowest Price Print

No Data

West Sacramento, CA

Volume Press

No Data

West Sacramento, CA

10/21/21

No Data

Acquisition

Commercial printing

Link

Dataflow

No Data

Binghamton, NY

Quicker Printer

No Data

Elmira, NY

10/18/21

No Data

Acquisition

Printing & copying

Link

Harvest Partners

No Data

New York, NY

Fortis Solutions Group (Port co. Main Post Partners)

No Data

Virginia Beach, VA

10/15/21

No Data

Acquisition

Labels & flexible packaging

Link

Fortis Solutions Group (Port co. Main Post Partners)

No Data

Virginia Beach, VA

Quality Tape and Label

No Data

Marietta, GA

10/11/21

No Data

Acquisition

Labels & shrink sleeves

Link

Dotdash (Port co. IAC)

$214.0

New York, NY

Meredith

$2,990

Des Moines, IA

10/6/21

$2,700

Acquisition

Magazine publishing

Link

Rohrer (Port co. Wellspring Capital)

No Data

Wadsworth, OH

Coburn Carton Solutions

No Data

Hayesville, OH

10/4/21

No Data

Acquisition

Folding cartons

Link

BR Printers

$21.6

San Jose, CA

C.J. Krehbiel Co dba CJK Print Possibilities

$14.5

Cincinnati, OH

10/1/21

No Data

Acquisition (Anderson LeNeave)

Book manufacturing

Link

Champion Media

No Data

Mooresville, NC

Herald-Advocate

No Data

Bennettsville, SC

10/1/21

No Data

Acquisition

Community newspaper

Link

HH Global Group

$426.5

Leatherhead, England

Noosh

$11.0

Mountain View, CA

10/1/21

No Data

Acquisition

Procurement management

Link

CCL Industries

$5,480

Toronto, ON

D&F

$31.3

San Luis, Mexico

10/1/21

$50.7

Acquisition

Industrial printing

Link

GTCR

No Data

Chicago, IL

PPC Flexible Packaging (Port co Morgan Stanley Capital)

No Data

Buffalo Grove, IL

10/1/21

No Data

Acquisition

Flexible packaging

Link

2021 October - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries

Filing Party

Date Case Filed

Pre-Petition Revenues (US$Mil)

Case #

Filing Party Address

Circuit

Region & City

Judge

Attorney for Debtor

Notes

Chapter 11 Filings:

Mid Atlantic Printers, LTD.

10/27/21

No Data

21-61173

Altavista, VA

4th

Western VA Lynchburg

Rebecca B. Connelly

Andrew S. Goldstein

Commercial printing

Chapter 7 Filings:

Pocono Screen Supply, LLC

10/31/21

No Data

21-02229

Lackawanna, PA

3rd

Middle PA Wilkes-Barre

Henry W. Van Eck

Brian E. Mannin

Screen printing supplies

  

		2021 October - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues (US$Mil)	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		Windmill Press	11/9/21	No Data	Pennsauken, NJ	None	N/A	Oct-21	Specialty printing & finishing	Link
		Brown Industries	12/16/21	No Data	Dalton, GA	None	N/A	Oct-21	Retail displays	Link

Slugfest Breaks Out Over RR Donnelley – November 2021 M&A Activity

December 7, 2021, 8:30 pm

≫ Next: GPA Global Emerges as Packaging Consolidator – December 2021 M&A Activity

≪ Previous: The End of the Dotcom Era – October 2021 M&A Activity

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You’ve heard it. I’ve heard it. Print is Dead. If that is true, why did two private equity heavyweights, both of which are already invested in print and paper, get into a slugfest and bid up the share price of RR Donnelley (RRD)?

The deal is not done, so there still might be an opportunity for Atlas Holdings, the challenger, to rise up and get back into the ring, however that appears unlikely at the time of this report. Atlas made a good show of it and had clear reasons to enter the fight. As the owner of LSC Communications, which itself was spun off of RRD in October 2016, Atlas’ bid held out the tantalizing possibility that two of the three formerly conjoined business units would be reunited under one ownership. Heads must have been spinning about the possibilities. Alas, Atlas got knocked out in the last round, beaten out by the tenacious, persistent parrying, blocking and punching by Chatham Asset Management.

Chatham had been preparing for this fight for quite a while, bulking up on RRD’s common stock and gathering bench strength as the largest holder of RRD’s debt, both of which Chatham suggested would be converted to equity or subordinated in the restructured company, a huge advantage in the final rounds.

When the match between Atlas and Chatham seemed like it was all over, a mysterious contender slipped under the ropes via a “go shop” provision and jumped into the ring. Keeping its identity a secret, the mystery bidder punched above the fray with an offer that was ten percent higher than Chatham’s second offer which had been seemingly insufficient to dislodge Atlas. That did it. Chatham came back with a third bid and topped the mystery offer. As the final blow to settle the contest, Chatham also agreed to pay for any wounds it had inflicted on Atlas, offering to pay RRD’s $20 million termination fee due to Atlas for breaking up. RRD rang the bell and declared Chatham Asset Management the winner.

(Click chart to enlarge)

While the contenders slugged it out and went the full ten rounds in a battle for control of RRD, the value of stockholder’s equity shot up from a dismal low of less than $100 million at the trough of the market after the pandemic broke out, topping out at the conclusion to more than three quarters of a billion dollars. Total enterprise value, including equity and debt, was reported to have reached in excess of $2.1 billion.

Neither Chatham nor Atlas are strangers to the world of print and paper-based industries. They know what they are getting into. It’s true that these sophisticated financial players move in on their targets when company situations are advantageous to a buyer, such as Chatham did by building a position when RRD’s stock and debt values were depressed, or by acquiring companies in bankruptcy proceedings. Nonetheless, they must perceive significant value in the assets, or they would not be in the hunt for these companies.

Chatham Asset Management is a major player in the newspaper industry, including its investment in McClatchy, the publisher of over 30 newspapers. Chatham acquired the McClatchy assets in the 363 sale process in McClatchy’s bankruptcy proceeding. (see Buyers are On The Move and On Track, Newspaper Publishing – July 2020).

Atlas Holdings will be known by many in the printing industry for its take-private acquisition of LSC Communications, the RRD spinoff that is the largest book manufacturer in the US, as well as a major US printer and distributor of magazines. Atlas also owns several paper manufacturing companies, including Finch Paper, which in turn acquired French Paper Company, Twin River Paper Company, Marcal Paper, and is currently in negotiations to acquire coated paper manufacturer Verso. Atlas also has investments in packaging with its portfolio company ASG AGI-Shorewood Group.

For those of us who have dedicated our careers to the printing and related industries, it’s nice to know that we are in the company of these Masters of the Universe* who see value in and have placed their bets on businesses that print.

Commercial Printing

CJK Group, the privately owned consolidator that has focused on book manufacturing and journal printing, jumped back into the market with the acquisition of Times Printing, a large web and sheetfed printing facility in Random Lake, Wisconsin. The acquired company was formerly part of the late Nicholas Karabots’ Kappa Media Group. The plant produces magazines, catalogs and commercial printing in a wide variety of finished sizes, with some short cut-off size capabilities.

Packaging

The consolidation of the packaging industry continues unabated. Inovar Packaging Group, a portfolio company of AEA Investors, acquired Dion Label Printing, located in Westfield, Massachusetts. Inovar is a portfolio company of AEA Investors. Dion Label is a printer and converter of prime labels, OTC pharmaceutical labels and specialty medical labels.

ProAmpac, headquartered in Cincinnati, Ohio, acquired Irish Flexible Packaging and related company Fispak, both in Ireland. The acquired companies manufacture waxed paper and specialty wraps for meats, cheeses, and bread products. Currently backed by Pritzker Private Capital, ProAmpac has been rolling up the flexible packaging segment steadily since its formation in 2015 with the merger of Ampac and Prolamina. The company has branched out recently in products such as wraps and bags (see Bags, Pouches, Trays & Bowls – December 2020).

ProMach, a manufacturer of packaging machinery, acquired CL&D Graphics, a specialty printer and converter of roll-fed film, labels, shrink sleeves, pouches, lids, and preprinted thermoformed packaging. The acquisition would appear to be a new strategic direction for ProMach, providing the packaging materials in addition to the machinery.

TC Transcontinental, the largest printing company in Canada, continued its evolution into a packaging and retail display company, moving steadily away from its legacy position as a publisher and printer of newspapers and magazines, with the acquisition of H.S. Crocker (see Getting Flexible in Your Middle Years - April 2018). The acquired company has revenues of $50 million and operates two facilities, in Huntley, Illinois and Exton, Pennsylvania.

* “Masters of the Universe” from The Bonfire of the Vanities by Tom Wolfe, 1987, referring to highly successful financial business experts.

     

2021 November - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1 (Surviving Entity)

Pre-Deal Revenues (US$Mil)

Party #1 Address

Deal Party #2

Pre-Deal Revenues (US$Mil )

Party #2 Address

Date Deal Public

Deal Value (US$Mil)

Deal Structure (Intermediary)

Notes

Press Release

Chatham Asset Management

No Data

Chatham, NJ

RR Donnelly

$4,940

Chicago, IL

11/30/21

$1,200

Acquisition

Diversified printing services

Link

Lindenmeyr Munroe (Div. Central National Gottesman)

$6,200

Purchase, NY

Paterson Papers

No Data

Paterson, NJ

11/30/21

No Data

Acquisition (DAK Group)

Paper distribution

Link

Frost River

No Data

No Data

On The Limit

No Data

Duluth, MN

11/29/21

No Data

Acquisition

Screen printing apparel

Link

Inovar Packaging Group (Port co. AEA Investors)

No Data

Dallas, TX

Dion Label Printing

No Data

Westfield, MA

11/17/21

No Data

Acquisition

Label printing

Link

Sydney Stone

No Data

Mississauga, ON

Philips Graphics Services

No Data

Mississauga, ON

11/15/21

No Data

Acquisition

Printing equipment services

Link

New State Capital Partners

No Data

Larchmont, NY

Wilmington Paper

No Data

Pinebrook, NJ

11/12/21

No Data

Acquisition

Paper recycling

Link

Bobst Group

$1,642

Mex, Switzerland

Groupo Cerutti

No Data

Casale Monferrato, Italy

11/11/21

No Data

Acquisition

Gravure printing presses

Link

Tjoapack

No Data

Etten-Leur, The Netherlands

Pharma Packaging Solutions (Div. Carton Services)

No Data

Clinton, TN

11/8/21

No Data

Acquisition (Mesirow)

Folding cartons & blister packs

Link

ProAmpac (Port co. Pritzker Partners)

No Data

Cincinnati, OH

Irish Flexible Packaging / Fispak

No Data

Wicklow, Ireland

11/4/21

No Data

Acquisition

Flexible packaging

Link

ProMach (Port co Leonard Green & Partners)

No Data

Covington, KY

CL&D Graphics / CL&D Digital

No Data

Hartland, WI

11/2/21

No Data

Acquisition

Labels & flexible packaging

Link

TC Transcontinental

$2,520

Montreal, QC

H.S. Crocker Co.

$50.0

Huntley, IL

11/2/21

No Data

Acquisition (Blaige & Company)

Labels & die cut lids

Link

Team Concept Printing

No Data

Carol Stream, IL

Guardsman Laminating

No Data

Bensenville, IL

11/2/21

No Data

Acquisition

Bindery services

Link

BlueCrest (Port co. Platinum Equity)

No Data

Danbury, CT

Fluence Automation

No Data

Arlington Heights, IL

11/1/21

No Data

Acquisition

Sorting equipment

Link

CJK Group

No Data

Brainerd, MN

Times Printing (Div. Kappa Publishing)

No Data

Random Lake, WI

11/1/21

No Data

Asset Acquisition

Commercial printing

Link

      

2021 November - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries

Filing Party

Date Case Filed

Pre-Petition Revenues (US$Mil)

Case #

Filing Party Address

Circuit

Region & City

Judge

Attorney for Debtor

Notes

Chapter 11 Filings:

No Chapter 11 Filings Found this Month

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Chapter 7 Filings:

Screen-It, Ltd.

11/23/21

No Data

12-11076

Troy, NY

2nd

Northern NY Albany

Robert E. Littlefield, Jr.

Francis J. Brennan

Screen printing apparel & promo

   

		2021 November - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries
		Closed Company / Facility	Date of Closure	Pre-Closure Revenues (US$Mil)	Closing Address	Related Party	Related Party Address	Date Closure Public	Notes	Press Releases
		Nieman Printing	12/15/21	$29.2	Dallas, TX	None	N/A	Nov-21	Commercial printing	Link
		IWCO - Maiing facility	Jan-22	No Data	Little Falls, MN	IWCO	Chanhassen, MN	Nov-21	Mail processing services	Link