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

January 7, 2022, 8:30 pm
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As printing industry consolidators grow, merge, fail, sell out, or otherwise exit the playing field for the acquisition of lower middle market and family-owned companies, new smaller consolidators rise up to take their place, often with financial backing from a private equity sponsor.

Consolidators Grow Up and Leave the Lower Middle Market Behind

CJK has been a very active aggregator of companies in the book manufacturing business (see CJK Goes Global as Cenveo Unwinds – September 2020). Of late, CJK has increased the size and diversity of its acquisitions, most recently with the acquisition of Tweedle Group. The acquired company is itself quite sizeable, with over 500 employees worldwide. Tweedle primarily serves global equipment manufacturers with content management and e-delivery services, as well as printed material, related to technical product support. This follows CJK’s acquisition of Cenveo’s content management business. CJK is no longer simply a consolidator of US book manufacturing plants, the company has turned to hunting bigger game in the related, but distinctly non-print at its core, business of content management.

Other print industry consolidators have exited or are busy with their internal efforts to integrate past roll-ups of roll-ups. For example, the recent combination of Fort Dearborn and Multi-Color Corporation under the new ownership of Clayton, Dubilier & Rice has created a mega-sized label manufacturing conglomeration. (See Packaging Industry Consolidation in Every Direction – July 2021). At the size of this new combined label printing company behemoth, will it make sense to acquire more lower middle market family-owned and managed label printers?

In the folding carton segment, the formerly very active consolidator Multi Packaging Solutions was taken out of the mix in 2017 when it was acquired by WestRock. (See WestRock Affirms Commitment to Paper – January 2017). And for those of us that hail from the commercial printing segment, it seemed like exit purchase multiples dropped two turns the day the music died when RR Donnelley took Consolidated Graphics out.

A New Crop of Consolidators Springs Up

A free market abhors a vacuum, and while there may be a lag time, eventually new, smaller, and nimbler acquisitors will rise up to fill the void left by the lumbering giants. In the commercial printing segment, we have noted the entry into the space by Missouri-based ColorArt, which recently acquired the commercial printing business of Cenveo in Missouri and Texas. With backing from JAL Equity, ColorArt has quietly built a 15-plant network, and is now recognized as a serial consolidator within the commercial printing segment.

In our most recent annual review of M&A activity in the printing, packaging and graphic communications industries, we noted our expectation that the super-heated acquisition activity in the label business would likely be mimicked by an increased rate of consolidation within the folding carton manufacturing segment. Increased consolidation in folding cartons is now underway.

One player within the folding carton segment has come on slowly over the past five years but has recently stepped up its activity and announced two major acquisitions, one in the US and one in Europe. That company, GPA Global, just acquired Southern California Graphics, a general commercial printing company with a wide range of capabilities that includes a dabbling of expertise in folding cartons, as well as wide format retail display applications. The acquisition is another expansion of GPA’s production platform.

GPA Global has demonstrated that its goal of being an international packaging company is more than just the word global in its name. Only two weeks prior to the acquisition of Southern California Graphics, with financial backing from Sweden-based private equity firm EQT Partners, GPA Global acquired the ASG Print operations in Pruszków, Poland. The acquired company includes office locations in London, Paris and the Netherlands, with deep roots in the production of high-quality folding cartons and rigid boxes. From its plant in the outskirts of Warsaw, the production facility serves packaging requirements for companies in Europe, the Middle East, and Africa.

The acquired Polish operation of ASG Print was the remnant of Atlas Holdings’ investment in the AGI-Shorewood Group that Atlas formed in 2012 when it acquired Shorewood from International Paper, and merged it with Album Graphics International (AGI) to form ASG. The majority of ASG was sold by Atlas and rolled into Multi-Color Corporation back in 2014, effectively removing ASG from its role as industry consolidator. GPA Global clearly intends to step into that role.

Newly emerging consolidators are cognizant of the importance of how their brand is perceived in the marketplace by the next generation of buyers; corporate mission statements include social concerns alongside statements about product quality and economic value. GPA Global is positioning its own corporate brand as a sustainable and socially responsible packaging company. Established in 2009, the predecessor company to GPA Global was Green Packaging Asia, which had the stated goal of eliminating PVC clamshell packaging that it outsourced to factories in China. The company carries that corporate responsibility message forward to today, with a promise to continually seek to utilize eco-friendly materials and reduce waste throughout the life cycle of the packaging it manufactures. The social responsibility component of GPA Global’s brand position is fostered and supported by donations to a Hong Kong-based charitable fund that works to alleviate poverty, stop human trafficking, and educate girls in China, Nepal, and the Philippines. Along with growth comes corporate responsibility with up-to-date themes and concerns.

As the older more established consolidators are acquired and merged into large enterprise level operations, they often lose their appetite for the lower middle market and family-managed companies. In their place, new consolidators emerge with a fresh perspective. Often watered and fertilized with private equity funding and business expertise, these new consolidators grow via a steady and deliberate stream of acquisitions and offer a viable exit path for private company owners. Formerly privately-owned local or regional players gain the ability and scale to compete on a national or, as is the case with GPA Global, truly on the international playing field.
























(Click chart to enlarge)

Other Players Rolling-Up the Folding Carton Segment

Oliver Printing & Packaging has also emerged as a consolidator within the lower middle-market segment where many privately held, family-managed folding carton companies operate. Earlier this year, Oliver acquired Boutwell, Owens & Co., a manufacturer of folding cartons and blister cards. Oliver has announced that in December it closed on the acquisition of Professional Image, a manufacturer of folding cartons located in Tulsa, Oklahoma. This latest deal represents Oliver’s fourth add-on since Pfingsten Partners’ initial 2016 investment in Oliver.

Rohrer Corporation, based in Wadsworth, Ohio, announced the acquisition of Jay Packaging Group. The purchased company is in Warwick, Rhode Island and touts internal thermoforming manufacturing in addition to its core expertise in folding cartons. Rohrer recently also acquired Coburn Carton Solutions with two plants in Ohio. Rohrer itself was acquired by Wellspring Capital in March 2021 from Shoreview Industries. Upon its exit from ownership of Rohrer, Shoreview announced that it had grown Rohrer from $67 million to over $200 million in revenue with four add-on acquisitions since its initial investment in the company in 2009. Wellspring Capital clearly intends to pick up the pace and already has two sizeable acquisitions under its belt within its first eight months of ownership. Leaving no doubt about its intention to owners of folding carton companies, Wellspring announced its goal to “become the consolidator of choice in the industry.”
   
2021 December - 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
RBO PrintLogistixNo DataMaryland Heights,
MO		Reign Print SolutionsNo DataArlington Heights, IL12/31/21No DataAcquisition
(Corp Dev Assoc)		Commercial printingLink
Martin Yale IndustriesNo DataWabash, INPostmarkNo DataSan Luis Obispo, CA12/28/21No DataAcquisitionMail processing equipmentLink
Bluestem IntegratedNo DataTulsa, OKMagna IVNo DataLittle Rock, AR12/23/21No DataAcquisitionCommercial printingLink
CJK GroupNo DataBrainerd, MNTweddle GroupNo DataClinton Township, MI12/22/21No DataAcquisitionContent & print managementLink
Sycamore PartnersNo DataNew York, NYDigital Room
(Port co. H.I.G. Capital)		No DataSherman Oaks, CA12/22/21No DataAcquisitionE-commerce printing sitesLink
Checkpoint Systems
(Div. CCL Industries)		$553.0
($5,480)		Toronto, ONForever Blue (Tecnoblu)$17.6Blumenau, Brazil12/21/21$19.1AcquisitionLabels & tags for apparelLink
AmerCareRoyal
(Port co. HCI Equity Partners)		No DataExton, PARoss & Wallace Paper ProductsNo DataHammond, LA12/21/21No DataAcquisition
(Generational Equity)		Paper bagsLink
Canva GroupNo DataLaval, QCIntergraphics DecalNo DataWinnipeg, MB12/21/21No DataAcquisitionFleet markingLink
SupplyOne
(Port co. Wellspring Capital)		No DataNewtown Square,
PA		Romanow ContainerNo DataWestwood, MA12/20/21No DataAcquisitionCorrugated boxesLink
LBSNo DataDes Moines, IAFIM HeadbandsNo DataSouth Hackensack, NJ12/20/21No DataAcquisitionBookbinding suppliesLink
ProAmpac
(Port co. Pritzker Partners)		No DataCincinnati, OHPrairie State GroupNo DataFranklin Park, IL12/20/21No DataAcquisitionFlexible packaging & labelsLink
UFP Packaging
(Div. UFP Industries)		$8,010Grand Rapids, MIAdvantage Label & Packaging$19.8Grand Rapids, MI12/20/21$16.0AcquisitionLabel printingLink
BillerudKorsnäs$2,805Solna, SwedenVerso$1,264Miamisburg, OH12/20/21$970.0AcquisitionPaper manufacturingLink
Rohrer
(Port co. Wellspring Capital)		No DataWadsworth, OHJay Packaging GroupNo DataWarwick, RI12/17/21No DataAcquisition
(Mesirow)		Folding cartonsLink
Liberty Packaging
(Div. Liberty Diversified)		No DataNew Hope, MNAlois Box CompanyNo DataMelrose Park, IL12/16/21No DataAcquisitionCorrugated boxesLink
NarvarNo DataSan Francisco, CALumiNo DataLos Angeles, CA12/15/21No DataAcquisitionOnline packaging marketplaceLink
GPA Global
(Port co EQT Partners)		No DataNew York, NYSouthern California GraphicsNo DataCulver City, CA12/9/21No DataAcquisitionCommercial printingLink
1905 New Media
(Affil. Thomson Printing)		No DataSaint Charles, MOArco+Associates$1.2Ballwin, MO12/8/21No DataAcquisitionMarketing servicesLink
CherryRoad MediaNo DataParsippany, NJSleepy Eye Herald-Dispatch
(13 titles) (Prop. Gannett)		No DataSleepy Eye, MN12/8/21No DataAcquisitionCommunity newspapersLink
Jam Paper & EnvelopeNo DataNorthvale, NJBigname Commerce
( Port co. TZP Group)		No DataAmityville, NY12/7/21No DataMergerEnvelopes & foldersLink
MooreNo DataTulsa, OKTri-State EnvelopeNo DataAshland, PA12/7/21No DataAcquisitionEnvelope manufacturingLink
American Pacific GroupNo DataLarkspur, CAFellersNo DataTulsa, OK12/6/21No DataAcquisition
(Bridgepoint)		Wide format suppliesLink
Blue Point Capital PartnersNo DataCleveland, OHBrimar IndustriesNo DataGarfield, NJ12/1/21No DataAcquisitionSafety label & sign printingLink

  
2021 December - 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---------------------------
Chapter 7 Filings:
J.P. Printing, Inc.12/11/21No Data21-14034Chicago, IL7thNorthern IL
Chicago		Janet S. BaerDavid M SiegelPrinting & copying


2021 December - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



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


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
No Plant Closures Found this Month------------------------
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CCL Industries Breaks the Rules – January 2022 M&A Activity

February 7, 2022, 7:48 pm
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It is somewhat axiomatic that a large company needs to complete bigger and bigger transactions in order to move the needle on its own revenues and bottom-line profits. CCL Industries, the Canadian company primarily engaged in label printing and related specialties, consistently breaks that rule. Time and time again, CCL finds niche players in small corners of the market and applies its characteristic discipline to the valuation of the target acquisitions.

Executing a Strategy of Acquiring Niche Players

CCL announced three transactions in January, a continuation of the string of deals completed over the past two years in which the average revenue of the acquired companies was only $18.7 million.* In contrast, CCL’s revenue, inclusive of its four primary business segments, is approximately $4.4 billion, 235 times larger than the average of the acquired companies. Each acquisition, on average, represents a miniscule 0.43% increase in top line revenues for CCL. With very few exceptions, it is rare for the delta in size between buyer and seller to be so disparate. On the infrequent occasion when we see such a difference in the printing, packaging, and graphics industries, it is usually a one-off aberration that has a clearly defined and articulated strategic logic. However, in the case of CCL, the contrast in size is the norm.

The companies typically acquired by CCL serve unique niche markets, outside the fray of the PE-fueled roll-up underway over the past several years in the prime label segment. CCL’s most recent acquisition, McGavigan Holdings, adds to the company’s slow and steady growth in the industrial printing segment. McGavigan started in 1861 as a printer of commercial and religious materials in Glasgow, Scotland, and eventually migrated to the printing of industrial control panels, graphic overlays, and membrane switches. Beginning with a focus on the automotive OED market, printing dashboard dials for the Ford Escort, the company progressed technologically. McGavigan now produces highly technical sub-assemblies and beautifully printed control panels for the high-end automotive, medical device, and consumer product markets. The company still utilizes traditional printing techniques, including screen printing, in-mold labeling, pad printing and other decorative methods common in the printing industry, but this is not your everyday label printer.

Also announced in January, CCL acquired Lodging Access Systems, based in the Florida Tampa Bay area. The company is focused solely on RFID key cards, wristbands, and key fobs for access control applications, primarily serving the hospitality industry. Selling under the name RFID Hotel, the company claims to be the largest provider in the US of RFID key cards for hotels. Now that’s a product niche within a vertical niche. Just try and compete.

Rounding out CCL’s trio of January acquisition announcements, the company acquired International Master Products, a printing and die cutting operation that makes millions of plant tags, plant labels, plant label stakes and horticultural signage. Its products are seen at every garden nursery, garden center and home improvement store. Based in Michigan, halfway up the Great Lake, the company started making plant tags in 1949 when a local grower, Harry, asked his friend Lou, the local hardware store owner, if he might have a better method for labeling plants than the old-fashioned wooden stick and pencil method. As it turned out, Lou was making plastic fishing bobbers in the basement of his hardware store using injection molding. When printing was added to the new product, the now ubiquitous plastic nursery tags, stakes, and labels became the standard, informing consumers about the specific plant variety being offered, with care and growing instructions all in one convenient place. What began as a favor to a friend grew into a highly specialized printing business serving a clearly defined vertical market.

This thread of unique printed products that serve niche markets runs consistently throughout virtually every acquisition that CCL completes, no matter the size or how small.

Maintaining Pricing Discipline

As we have noted in the past, CCL exhibits a high degree of pricing discipline across the range of its acquisitions (See Sticky Discipline for the Label Business – May 2016). It is true that the average of the multiples paid by CCL has increased from the 5.1x average multiple of adjusted EBITDA in the 2016 survey of CCL deals. Enterprise values are now a full turn higher, with an average multiple in the past two years of 6.1x adjusted EBITDA. However, that increase is modest within the context of and compared to the current hot market for companies in the label printing and converting segment (See Private Equity Fuel$ Consolidation of Label Industry – September 2021).

CCL paid higher than its average multiple for the MaGavigan company, which went for an enterprise value of 7.2x adjusted EBITDA. Notably, McGavigan is the largest of the CCL target group and also the most specialized. McGavigan is arguably not primarily a printing company, more aptly described as a specialized manufacturer that happens to print, justifying the multiple above the usual disciplined CCL range.

Also of interest, the other value outlier in the group was Lux Global Label Asia, a small and less differentiated label printing company in Singapore. At a multiple of 9.4x, the transaction stands out both for the price paid, as well as for sporting the lowest EBITDA of the group, expressed as a percentage of revenue. By way of explanation, CCL noted in the press release that the enterprise value of Lux Global Label Asia was not based on a multiple of EBITDA, but rather was the fair market value of the tangible assets, including the building, an asset not usually factored into the enterprise value of a printing company. In other words, in this instance, the market value of the assets exceeded the value determined using a multiple of EBITDA and CCL agreed to that alternate valuation methodology, but made it clear in the corporate communication that they did not abandon their pricing discipline and did not overpay. If we remove the aberrant Lux Global Label Asia transaction from the mix, the average enterprise value paid across the transactions of the past two years drops down to 5.8x adjusted EBITDA, demonstrating even more strongly CCL’s disciplined pricing approach to its acquisition strategy in the midst of a red-hot market for label and related printing companies.
 
























(Click chart to enlarge)

Activity Stays Brisk Across the Label Printing Segment

Brook + Whittle, which in November 2021 was itself acquired by PE fund Genstar Capital, announced its first deal under the new financial sponsorship, with the purchase of Paradigm Label. The acquired company is based in Mira Loma, California and manufactures flexible packaging and labels. The company extolled the deal as a continuation of its westward expansion, building on the recent acquisition of Digital Label Solutions, also in California. Brook + Whittle is now under the ownership of its third PE sponsor (in addition to its original collaboration with independent sponsor Charter Oak Equity). Via a steady stream of acquisitions, Brook + Whittle has grown to nine production facilities with over 1,200 employees.

Resource Label Group, one of the other very active PE-backed roll-ups in the label segment, kept up its steady pace of deals, landing QSX Labels in Everett, Massachusetts. The CEO of Resource Label noted that the purchase of QSX Labels represents the twenty-third acquisition for the company and expands their existing presence in New England. Like Brook + Whittle, Resource Label Group also recently traded out its former PE owner. In August, Resource Label Group was purchased by Ares Management, its third private equity sponsor (See The Evolution of Resource Label Group – September 2021).

I.D. Images also is under new private equity ownership, having been acquired by Sole Source Capital in August 2021. I.D. Images came out in January with a triple-play, simultaneously announcing the acquisition of Valley Forge Tape & Label in Exton, Pennsylvania, Multi-Action Communications in Quebec, and Digital Printing Concepts in Providence, Rhode Island. I.D. Images distinguishes its position in the market by selling only through independent trade distributors.

AWT Labels & Packaging announced its first acquisition under the ownership of Morgan Stanley Capital Partners, which acquired the AWT label roll-up in December 2020. In a departure from AWT’s focus on primary labels, shrink sleeves and flexible packaging, the acquired company, MacArthur Corporation, offers a range of industrial printing products such as flexible electronics, as well as RFID tags and a range of engineered functional film products serving OEM customers in the automotive, electronics, health technology and other industrial sectors.

Epic Labeling Solutions in Mountain View, California was sold to BR Printers, a company with its roots in the commercial printing segment. Based in nearby San Jose, BR Printers has been acquiring commercial printing, direct mail, promotional product distribution, and book manufacturing companies, some as far flung from its California base as Cincinnati, Ohio and Independence, Kentucky. BR Printers’ stated strategy behind this latest acquisition is to provide label printing as a new resource within one business entity, a classic one-stop shopping approach.

Trident Solutions, a platform holding company in Sherman, Texas with financial backing from River Associates Investments, a PE firm in Chattanooga, Tennessee, acquired LEM Products. The purchased company is located in Pennsylvania and manufactures safety and identification labels, tags, and signs, primarily serving electrical and other utilities. Including the LEM acquisition, Trident has assembled a portfolio of five companies that produce specialized signs, tapes, marker posts, nameplates, personal protection products, and tracer wires, all with the common theme of promoting safety via warning and hazard identification.

On the material supply side of the label business, Mactac, a division of Japan-based Lintec since 2016, acquired Spinnaker Coating. The acquired company, based in Troy, Ohio, has distribution centers across the US and specializes in customized production and distribution of pressure-sensitive roll and sheet label stock. All Printing Resources, a distributor serving the flexographic printing market, expanded its reach with the acquisition of Marietta, Georgia based JVI Solutions which distributes flexographic plates and other supplies to the label printing industry.

* All figures herein converted to US dollars as of the date the transaction was announced.
   
2022 January - 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
HSP DirectNo DataAshburn, VAMDI Imaging and MailNo DataDulles, VA1/27/22No DataAcquisitionDirect mail printingLink
Summit Plastics
(Port co. Longuevue Capital)		No DataSummit, MSClear View PackagingNo DataAlbany, NY1/27/22No DataAcquisitionFlexible packaging & bagsLink
Kornit Digital$193.3Rosh HaAyin, IsraelTesomaNo DataLichtenau, Germany1/25/22No DataAcquisitionDrying machineryLink
Olympus Group$24.0Milwaukee, WIScreaming ImagesNo DataLas Vegas, NV1/24/22No DataAcquisitionWide & grand format printingLink
DCG One
(Port co. Clavis Capital/Dobbs Mngt.)		$65.0Seattle, WAGarrigan Lyman GroupNo DataSeattle, WA1/20/22No DataAcquisitionMarketing & branding servicesLink
Mactac
(Div. Lintec)		No DataStow, OhioSpinnaker Coating$130.0Troy, OH1/20/22$40.0AcquisitionSpecialty papersLink
Chicago Public MediaNo DataChicago, ILChicago Sun-TimesNo DataChicago, IL1/18/22No DataAcquisitionMetro newspaperLink
The Arena Group$181.0New York, NYAMG/ParadeNo DataNew York, NY1/18/22$16.0AcquisitionMagazine publishingLink
Apollo Mailing GroupNo DataMarietta, GA1st Class MailingNo DataKennesaw, GA1/14/22No DataMergerMailing servicesLink
FutureTech Holding CompanyNo DataAtlanta, GAVincent PrintingNo DataChattanooga, TN1/12/22No DataAcquisitionWide & grand format printingLink
Ironmark$39.3Annapolis Junction, MDPrinting SpecialistNo DataGlen Burnie, MD1/11/22No DataAcquisitionCommercial printingLink
Graphic Village
(Port co. Revitalize Capital)		$22.0Cincinnati, OHOneTouchPoint - Cincinnati Div
(Port co. ICV Partners)		No DataCincinnati, OH1/11/22No DataAcquisitionCommercial printingLink
AWT Labels & Packaging
(Port co. Morgan Stanley Capital)		No DataMinneapolis, MN MacArthur CorporationNo DataGrand Blanc, MI1/10/22No DataAcquisitionLabel & tag printingLink
Trident SolutionsNo DataSherman, TXLEM ProductsNo DataMontgomeryville, PA1/7/22No DataAcquisitionSafety label, tag & sign printingLink
CCL Industries$4,393Toronto, ONMcGavigan Holdings$43.7Glasgow, UK1/7/22$82.8AcquisitionIndustrial printingLink
Brook + Whittle
(Port co. Genstar Capital)		No DataNorth Branford, CTParadigm LabelNo DataMira Loma, CA1/6/22No DataAcquisitionFlexible packaging & labelsLink
Corporate Graphics Commercial
(Div. Taylor Corporation)		No DataNorth Mankato, MNReindl BinderyNo DataGermantown, WI 1/6/22No DataAcquisitionBindery servicesLink
Direct Marketing Solutions
(Port co. Main Street Capital)		No DataPortland, ORMailing Services of Pittsburgh$81.0Freedom, PA1/5/22No DataAcquisitionDirect mail printingLink
Symphony Technology GroupNo DataMenlo Park, CAeProductivity Software
(Div. Electronics for Imaging)		No DataFremont, CA1/5/22No DataAcquisitionMIS systems for printingLink
I.D. Images
(Port co. Sole Source Capital)		No DataBrunswick, OHValley Forge Tape & LabelNo DataExton, PA1/5/22No DataAcquisitionLabel printingLink
I.D. Images
(Port co. Sole Source Capital)		No DataBrunswick, OHMulti-Action CommunicationsNo DataL'Ange-Gardien, QC1/5/22No DataAcquisitionLabel printingLink
I.D. Images
(Port co. Sole Source Capital)		No DataBrunswick, OHDigital Printing ConceptsNo DataProvidence, RI1/5/22No DataAcquisitionBarcode label printingLink
Resource Label Group
(Port co. Ares Management)		No DataFranklin, TNQSX Labels No DataEverett, MA1/5/22No DataAcquisitionLabel printingLink
Oliver Printing & Packaging
(Port co. Pfingsten Partners)		No DataTwinsburg, OHProfessional ImageNo DataTulsa, OK1/5/22No DataAcquisitionFolding cartonsLink
Avery
(Div. CCL Industries)		$553.8
($4,393)		Toronto, ONLodging Access Systems$12.6Lake Mary, FL1/4/22$21.9AcquisitionDigitally printed RFID cardsLink
Avery
(Div. CCL Industries)		$553.8
($4,393)		Toronto, ONInternational Master Products$36.4Montague, MI1/4/22$49.3AcquisitionHorticulture tags & labelsLink
All Printing ResourcesNo DataGlendale Heights, ILJVI SolutionsNo DataMarietta, GA1/4/22No DataAcquisitionFlexographic suppliesLink
BR Printers$21.6San Jose, CAEpic Labeling SolutionsNo DataMountain View, CA1/4/22No DataAcquisitionLabel printingLink
Sihl GroupNo DataFiskeville, RIDietzgenNo DataTampa, FL1/1/22No DataAcquisitionGraphic supplies distributorLink
    

2022 January - 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---------------------------
Chapter 7 Filings:
No Chapter 7 Filings Found this Month---------------------------
  
 
2022 January - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



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


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases

New York Daily News - Printing facility3/12/22No DataJersey City, NJNew York Daily News
(Port co. Alden Global Capital)		New York, NY1/12/22Outsourcing printingLink

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Printing Papers Get Squeezed Out – February 2022 M&A Activity

March 6, 2022, 9:52 pm
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A refrain is now heard throughout the printing industry; paper supplies are very tight, allocations limit the ability to take on new customers, discounts and rebates are a thing of the past, shipments are delayed until price increases take effect, and printing and packaging companies increase paper inventories at every opportunity. The supply and demand curves have crossed, and the mills are in charge.

There are several reasons pricing leverage has shifted to the mills, including a labor strike at Finnish papermaker UPM, Covid-related supply chain disruptions, shortages of drivers, all in addition to the numerous closures of paper mills over the past several years.

The Finns will eventually go back to work, shipping containers will get sorted out, truck drivers will be hired, and pricing will eventually settle down. However, one trend that is not likely to reverse is the conversion of papermaking machines from printing paper grades to packaging grades.

Conversion to Brown Paper

McKinley Paper Company, a subsidiary of Mexico-based paper producer Bio Pappel, acquired Midwest Paper Group located in Combined Locks, Wisconsin. The Midwest Paper Group mill is the former Appleton Paper mill, which for many years produced fine printing papers. The switch to packaging grades has taken several years to complete, with the mill’s loyal employees traversing a painful path through several owners, receivership, a complete shutdown of the mill, the resurrection and restarting of the machines, and finally the rebuilding of the paper machines to make lower quality, but in demand, packaging grades.

At one time, the Appleton Papers company, which operated the mill, made some of the finest coated printing paper grades. As the former owner of a commercial printing company, I remember that some of the papers that Appleton Papers made were so fine that they were rated above number one and earned the approbation as premium and super-premium grades. Sold under the tradename Utopia One, these were beautiful papers.

Appleton Paper was capable of making these fine grades because the company had a long history of technical proficiency in paper coating technology. Notably, in the 1950’s when the inventor of microencapsulated inks developed the technology that enabled carbonless papers, he went to Appleton to commercialize his invention. Appvion, the successor to the original Appleton Papers company, has retained much of that coating expertise, now applied to direct thermal labels and other highly specialized coated substrates.

As Appleton transitioned to become specialty coating company Appvion, the mills were sold off and acquired by an investment group. That group foresaw the increased demand for packaging grades and began the transformation of the mill’s product lines. However, the company was overleveraged, and the Combined Locks facility eventually was forced to shut down when the company’s lender forced it into receivership in September 2017. Two used machine dealers picked up the 55-acre mill complex in the receivership proceedings, apparently intending to sell off the pieces. Fortuitously, the buyers stopped, looked at what they had bought, and listened to the investment group that had failed to complete the conversion.

The new buyers decided to give it a go and restarted the mill’s papermaking machines in 2018, recalling many of the laid off highly skilled papermakers. Commenting on the continuation of the conversion plans, the president of Midwest was quoted at the time, “White paper is in a declining market and you’re fighting to sell every ton. When you move to brown paper, we’re making both the inside and the outside of the boxes. It may not be sexy, but that market is growing tremendously, and we’re excited about it. We’re using our ability to make high-quality white paper and it put us in a position to make brown paper very, very well.”

McKinley Paper has other papermaking assets in the US, including U.S. Corrugated in Pennsylvania which it acquired in 2019. It’s parent company, Bio Pappel, is focusing its efforts on the production of packaging grades. The purchase by McKinley Paper firmly cements the conversion of the Combined Locks mill site to the production of brown Kraft paper and containerboard products.

More Conversions on the Horizon

In December 2021, Swedish paper company BillerudKorsnäs announced the acquisition of US-based Verso Corporation. Verso is the successor to the coated business of two major paper companies, International Paper and NewPage Holdings. Before being rolled into Verso, NewPage had itself acquired MeadWestvaco’s printing and writing paper business, as well as the North American assets of Stora Enso (formerly Consolidated Papers). Both Verso and NewPage declared bankruptcy and were restructured, shedding billions of dollars of debt in the process. During their relatively short lifespans, Verso and NewPage each separately closed numerous paper mills that produced printing paper grades as the market for these grades contracted.

BillerudKorsnäs stated goal in its acquisition of Verso is to build one of the most cost-efficient and sustainable paperboard platforms in North America by converting some of Verso’s assets into paperboard machines. Verso’s largest mill in Escanaba, Michigan, which currently produces printing and specialty grades for printing magazines, books, direct mail, and labels will be converted into a fully integrated pulp and paperboard production site. The plans call for one machine to be converted by 2025 and a second machine by 2029. BillerudKorsnäs will produce paper at Escanaba during the conversion. At the other mill included in the Verso deal, at Quinnesec, Michigan, the company will continue to produce coated woodfree and specialty printing papers. Despite the buyer’s assertion that it is committed to serve Verso’s existing customers, it appears that almost 75% of the acquired capacity will be converted from printing grades to paperboard grades.

The McKinley Paper mill and Verso conversions follow transitions at other paper mills, including ND Paper’s reworking of its Rumford, Maine paper mill to shift production further into packaging grades. ND Paper is a wholly-owned subsidiary of China-based Nine Dragons Paper Holdings, the largest producer of containerboard in Asia. Similar to Mexico’s Bio Pappel, the Chinese company’s focus is on the production of packaging, not printing, paper grades.

No Going Back

The paper industry has been chasing falling demand across the printing grades for a couple decades, closing mills, seeking to regain pricing leverage. With the uptick in online purchasing and increased consumer spending across the board during the rebound from the Covid shutdowns, the stage was set for the significant shift in paper manufacturing now well underway. The result is that shuttered mills have reopened, and in the process, transitioned to packaging grades. Underperforming mills are purchased, and the new owners reconfigure the paper machines away from printing paper grades and to containerboard or kraft papers. Paper making operations are large and capital-intensive; the moves are major sea changes and will not be easily reversed. The result will be tight supplies of printing grade papers for the foreseeable future.

   
2022 February - 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
BlueCrest
(Port co. Platinum Equity)		No DataDanbury, CTWindowbookNo DataCambridge, MA2/23/22No DataAcquisitionMail processing softwareLink
ProAmpac
(Port co. Pritzker Partners)		No DataCincinnati, OHBelle-Pak PackagingNo DataMarkham, ON2/22/22No DataAcquisitionPouches & flexible packagingLink
AWT Labels & Packaging
(Port co. Morgan Stanley Capital)		No DataMinneapolis, MN LabeltronixNo DataAnaheim, CA2/17/22No DataAcquisitionLabel printingLink
Providence Strategic Growth &
Blue Star Innovation Partners		No DataBoston, MA
Frisco, TX		PrintavoNo DataChicago, IL2/17/22No DataAcquisitionScreen printing MIS softwareLink
Providence Strategic Growth &
Blue Star Innovation Partners		No DataBoston, MA
Frisco, TX		InkSoftNo DataTempe, AZ2/17/22No DataAcquisitionPromo products MIS softwareLink
Apollo Global Management$5,810New York, NYNovolex
(Port co. Carlyle Group)		No DataHartsville, SC2/14/22No DataAcquisitionBags & diverse packagingLink
Menasha Packaging$2,000Neenah, WIColor-Box
(Div. Georgia-Pacific)		No DataAtlanta, GA2/14/22No DataAcquisitionCorrugated boxesLink
Todd McCulloughNo DataBelton, MOPrime Label KCNo DataBelton, MO2/11/22No DataAcquisition
(Generational Equity)		Label printingLink
McKinley Paper Company
(Div. Bio Pappel)		No DataPort Angeles, WAMidwest Paper Group
(Port co. Industrial Opportunity Partners)		No DataCombined Locks, WI2/11/22No DataAcquisitionPaperboard & kraft millLink
Lakeside Book, Div. LSC
(Port co. Atlas Holdings)		No DataChicago, ILPhoenix Color
(Sub. ALJ Regional Holdings)		No DataHagerstown, MD2/4/22$134.8AcquisitionBook manufacturingLink
Sealed Air Corporation$5,530Charlotte, NCFoxpak FlexiblesNo DataLouth, Ireland2/1/22No DataAcquisitionDigital flexible packagingLink

   
2022 February - 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---------------------------
Chapter 7 Filings:
Acorn Sign Graphics, Inc.2/23/22$6.022-30449Richmond, VA4thEastern VA
Richmond		Kevin R. HuennekensDavid K. SpiroSignage
Back Bay Sign, LLC2/4/22No Data22-10136Wilmington, MA1stMassachusetts
Boston		Frank J. BaileyDavid B. MadoffSignage


2022 February - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



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


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
The Print House3/16/22No DataBrooklyn, NYNoneN/AFeb-22Commercial printingLink
↧

Label Roll-Ups are Red Hot; Are Folding Cartons Next? – March 2022 M&A Activity

April 5, 2022, 3:58 pm
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Merger and acquisition activity in the label and flexible packaging printing and converting segments has been on fire, with several PE-backed roll-ups competing to pick up family-owned and managed companies. As the market becomes more crowded with competing PE platforms, several roll-ups were inevitably themselves rolled up in secondary and tertiary buys (see Private Equity Fuel$ Consolidation of Label Industry – September 2021).

The activity in the label and flexible packaging segments continues unabated, month after month, and March was no exception. All American Label & Packaging, with backing from Heartwood Partners, merged with Western Shield Label & Packaging, itself a serial acquirer of label companies. C-P Flexible Packaging, with financial sponsorship of First Atlantic Capital, acquired Bass Flexible Packaging. The Jordan Company, a PE firm with deep experience in packaging films and paperboard mills, acquired Five Star Holding, a Texas-based group of companies that produce flexible packaging, printed films, and plastic bags. H.I.G. Capital, the global behemoth fund and no stranger to print-centric businesses, has rebranded its new flexible packaging platform simultaneously with the purchase of TechFlex Packaging in Gardena, California. Operating now as DazPak, the new entity incorporates the former acquisitions of Action Packaging and Signature Flexible Packaging, and certainly is in the hunt for more.

As we noted in our September annual review of M&A activity in the printing, packaging and graphic communications industries, our expectation has been that the super-heated acquisition activity in the label and flexible packaging businesses would likely be mimicked by an increased rate of consolidation within the folding carton manufacturing segment. Activity will be most pronounced in the lower middle market that is populated by mature privately owned businesses. While the folding carton business may never experience the frenzy of activity occurring in the label business, nonetheless increased consolidation in folding cartons is now underway and, in our opinion, is likely to increase.

Private Equity is the Driver

As with labels, the fuel igniting the fire in folding cartons is the institutional capital injected into the market by the multitude of private equity funds seeking to differentiate themselves and put their investor’s money to good use within limited time frames. Packaging, in general, has several of the characteristics that many funds seek: recurring revenues, reasonably predictable margins, diverse customer verticals, and a highly fragmented landscape of companies to acquire, many of which are privately owned and operating in the fertile ground of the lower middle market.

With low interest rates and plenty of cash sloshing around the economy, old-fashioned financial engineering has been replaced by the platform-and-bolt-on strategy. Buy a good sturdy company, add on an appropriate acquisition, remove duplicative costs, institutionalize the back-office functions, and repeat. Funds seeking a coherent investment thesis have landed on packaging as a desirable and suitable business to which they can apply this basic roll-up strategy.

As in other segments of the printing industry, aging owners of folding carton manufacturers often do not have a qualified or interested next generation to pick up the mantle of leadership or that want to assume the financial risk inherent in private company ownership. Faced with the need to embark on another cycle of investment in increasingly sophisticated capital equipment, owners instead want to exit ownership, take chips off the table, and retire from the business. Fertile ground for consolidation, indeed.

Lewisburg Printing Company Enters the Game

Lewisburg Printing Company announced that it was merging Huston Patterson into its fold, along with Sigma Graphics, a subsidiary of Huston Patterson. The acquired company operates from its primary location in Decatur, Illinois, with an additional plant in Ottawa, Illinois. The acquired company perfectly fits the roll-up bolt-on criteria. With a history dating back 115 years, Huston Patterson began as the commercial printing division of the local newspaper publisher. Acquired by the current selling family in 1961 as a small letterpress printing company, three generations have managed the transition of Huston Patterson into a producer of packaging and retail display components.

Products produced at Huston Patterson include litho labels and top sheets for mounting on corrugated stock to produce boxes with high quality graphics. Differentiation is provided with a fleet of large format offset presses capable of printing sheets large enough to wrap a box. Similar to other printing companies that run large format offset presses, Huston Patterson also produces top sheets used to manufacture retail displays. With 80 employees, the acquired company is in the sweet spot for bolt-ons in a roll-up strategy, not large enough to be purchased as a new platform company, but big enough to make an attractive addition to an existing PE-backed company ready to commence its roll-up strategy.

Lewisburg Printing itself was acquired in April 2021 by Radial Equity Partners, a New York-based private equity firm. The Radial Equity Partners team members are no strangers to the packaging business, having worked together at predecessor private equity firms leading investments in Alpha Packaging, Chesapeake Corporation, Mold-Rite Plastics and Multi Packaging Solutions. Lewisburg Printing has 250 employees operating large format offset presses and locations in Tennessee and Texas, and as such, is the ideal platform company on which to build out another success story.

The Competition

Oliver Printing & Packaging has a significant head start in this current class of PE-backed folding carton roll-ups. The Oliver family sold a controlling interest to Pfingsten Partners in May 2016. With its roots in commercial printing, Oliver had methodically built an expertise in printing and finishing folding cartons. Using Oliver as its platform, Pfingsten set about building out the platform in 2017 with the acquisition of folding carton manufacturer Pohlig Packaging in Richmond Virginia, followed by the purchase of DISC Graphics located on Long Island in New York State. DISC started as a specialized printing company producing record jackets and marketing collateral for the entertainment industry and had evolved into a high-end folding carton manufacturer serving a wide range of industries.

Staying true to the platform and roll-up strategy, Pfingsten supported Oliver with the 2021 acquisition of Boutwell, Owens & Co, a Massachusetts folding carton and blister card printing company. More recently, in January 2022, Oliver added Professional Image, a folding carton manufacturer in Tulsa, Oklahoma.

Another sophomore in the PE-backed roll-up of the folding carton segment is GPA Global. With backing from Sweden-based private equity firm EQT Partners, GPA has taken a more international approach, acquiring folding carton plants in the UK, Ireland, Poland, and the US. Most recently, GPA uncharacteristically staked out a position in the commercial printing segment with the purchase of Southern California Graphics (see GPA Global Emerges as Packaging Consolidator – December 2021).

On the varsity level is Rohrer Corporation, having graduated from its first PE sponsorship as a portfolio company of Shoreview Industries when it was acquired by Wellspring Capital in 2021. Upon its exit from ownership of Rohrer, Shoreview announced that it had grown Rohrer from $67 million to over $200 million in revenue with four add-on acquisitions since its initial investment in the company in 2009. Leaving no doubt about its intention to owners and potential sellers of folding carton companies, Wellspring announced its goal to “become the consolidator of choice in the industry.” Making good on that promise, Wellspring has already supported the acquisition of Jay Packaging in Warwick, Rhode Island and Coburn Carton Solutions in Hayesville, Ohio.

The Big Leagues

Fueled by the public markets rather than private equity funds, Graphic Packaging and Westrock are large, vertically integrated producers of folding cartons. Both companies operate their own paperboard mills with much of their mill’s output consumed by their own operations. While not completely immune to being purchased by one of the massive global private equity funds in a take-private transaction, these public entities have been at the top end of the folding carton food chain, absorbing former PE-backed roll-ups that have reached sufficient critical mass.

If the activity of the past several years in the label printing segment is any indication, and to at least some extent we believe it is, owners of folding carton manufacturers in the lower middle end of the market will be on the receiving end of multiple calls from newly minted young MBAs working the phones and sending emails, seeking to introduce their employer, a private equity fund intent on rolling up another segment of our industry.
   
2022 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
Contiweb
(Port co. H2 Equity Partners)		No DataBoxmeer,
Netherlands		WS PrintNo DataSchnaittach,
Germany		3/31/22No DataAcquisitionPressroom chemicalsNote
Jordan CompanyNo DataNew York, NYFive Star HoldingNo DataHouston, TX3/30/22$1,500AcquisitionFlexible packaging & filmsNote
Schweitzer-Mauduit International$1,440Alpharetta, GANeenah$1,030Alpharetta, GA3/28/22$1,000MergerSpecialty papersNote
All American Label & Packaging
(Port co. Heartwood Partners)		No DataDublin, CAWestern Shield Label & PackagingNo DataRancho Dominguez, CA3/28/22No DataMergerLabel printingNote
Gold Sachs Asset ManagementNo DataNew York, NYTemperPack TechnologiesNo DataRichmond, VA3/22/22No DataEquity FinancingThermal packagingNote
Lewisburg Printing Company
(Port co. Radial Equity Partners)		No DataLewisburg, TNHuston PattersonNo DataDecatur, IL3/22/22No DataAcquisitionFolding cartons & retail displayNote
Cold Chain Technologies
(Port co. Aurora Capital Partners)		No DataFranklin, MAPackaging Technology GroupNo DataFall River, MA3/21/22No DataAcquisitionThermal packagingNote
Imperial DadeNo DataJersey City, NJVeritiv Canada
(Sub. Veritiv Corporation)		$6,850Atlanta, GA3/18/22No DataAcquisitionPaper distributionNote
Tension CorporationNo DataKansas City, MOIntellus Print DivisionNo DataMontgomeryville,
PA		3/16/22No DataAcquisitionEnvelope manufacturingNote
Hybrid Software GroupNo DataCambridge, UKiC3d
Creative Edge Software		No DataMinneapolis, MN3/15/22$4.0AcquisitionPackaging mockup softwareNote
DazPak Flexible Packaging
(Port co. H.I.G. Capital)		No DataCommerce, CATechFlex PackagingNo DataGardena, CA3/9/22No DataAcquisitionFlexible packagingNote
Joann$2,420Hudson, OHWeaveUpNo DataDurham, NC3/8/22No DataAcquisitionDigital fabric printingNote
C-P Flexible Packaging
(Port co. First Atlantic Capital)		No DataYork, PABass Flexible PackagingNo DataLakeville, MN3/4/22No DataAcquisitionFlexible packaging & bagsNote
Xaar$66.5Cambridge, UKMegnajetNo DataNorthamptonshire, UK3/3/22No DataAcquisitionInk systemsNote


2022 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:
Art & Antiques Worldwide Media, LLC3/18/22No Data22-00598Wilmington, NC4thEastern NC
Raleigh		David M. WarrenGeorge M. OliverSpecialty publishing
Chapter 7 Filings:
No Chapter 7 Filings Found this Month---------------------------


2022 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 PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Little Raymond's Print Shop3/21/22No DataIndianapolis, IN Little Raymond's Print ShopCoppell, TX3/21/22Screen printing, apparel & promo itemsNote
19 Titles
Gannett Weekly Newspapers		May-22No DataEastern MAGannettMcLean, VA3/17/22Community papers ceasing print editionsNote
Stephenson Printing4/28/22No DataAlexandria, VANoneN/AMar-22Commercial printingNote
United Bindery Service5/2/22No DataChicago, ILNoneN/AMar-22Commercial print binderyNote
Diecrafters5/5/22No DataCicero, ILNoneN/AMar-22Commercial print diecutting & finishingNote
Mylan Technologies - Printing facility5/5/22No DataSwanton, VTPfizerNew York, NYMar-22In-Plant print shopNote
↧

When Does Customer Concentration Become an Advantage? – April 2022 M&A Activity

May 8, 2022, 8:30 pm
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One of the more pernicious characteristics of many printing companies is the reliance on one or two customers that become the majority source of revenue. A loyal key customer can be the lifeline when a company is starting up. The key customer’s demands drive the company’s strategic direction, inform capital equipment investment decisions, enable the development of particular internal skill sets, and lead to product specialization. When it comes time to sell the company, customer concentration often results in a small universe of buyers restricted to those willing to take on the risk inherent in the situation. Buyers may seek discounts on enterprise value or at minimum require some form of risk mitigation in the structure of the purchase.

Occasionally the laser-like focus on serving a customer is not a risk for a buyer, but rather the very reason that the transaction makes sense. We are reminded of the long-term strategic decision made by TC Transcontinental in 2014 to transition out of the company’s traditional publishing and publication printing services and move aggressively into the flexible packaging segment. The company acquired by TC Transcontinental, Capri Packaging, had one customer, its owner Schreiber Foods, that provided 75% of revenue. To gain entry to the new market segment with one fell swoop, TC Transcontinental paid dearly at 1.85 times acquired revenues. Risk was mitigated with a ten-year commitment from Schreiber Foods, the seller and now the number one customer of the spun-off printing operation (see The Target Report – March 2014).

In this example of TC Transcontinental’s foray into flexible packaging, customer concentration became a positive attribute in the deal. Despite the seller’s customer concentration, the acquired business formed a large enough base for TC Transcontinental to establish a stake in the flexible packaging market. Supported by a contractual commitment, the customer concentration became less significant within TC Transcontinental’s much larger business.

Within four years, TC Transcontinental had built on the acquired base and successfully transformed its business to be more than 50% packaging (see Getting Flexible in Your Middle Years - April 2018).

Millennium Print Group Acquired

The Pokémon Company International, the US division of the parent Japan-based Pokémon company, acquired Millennium Print Group. Millennium has focused on the printing and finishing of trading and specialty cards. Based in Morrisville, North Carolina, the company has in excess of 830,000 square feet of production space, seven 40” Komori presses, with in-line coating and full UV curing systems. Critically, the company boasts multiple in-house slitting lines, round cornering, and overwrapping capabilities, all necessary for efficient card production.

The company was acquired by Park Communications in 2014 and has been printing Trading Card Game (“TCG”) cards for Pokémon since 2015. Both buyer and seller indicated that investments are forthcoming to serve not only the needs of Pokémon, but to continue to grow the printing operation to become the premier printer of trading cards in the world.

Created in Japan in 1996 by Satoshi Tajiri, the original Pocket Monsters was inspired by his love of collecting insects, or as he saw them, little monsters. He designed the original game as a simple contest in which cartoonish humans capture fanciful little creatures by throwing Poké Balls at them. Originally hosted on the monochrome Nintendo Game Boy system, the first images were low-res, pixelated, and black and white. From that humble beginning, the brand has transformed into a multi-media phenomenon estimated to be the highest-grossing media franchise of all time. The video game, in all its iterations, is the fourth best-selling video game with more than 380 million copies sold and one billion mobile downloads. The game inspired a television series, now the most successful TV adaptation of a video game with over 20 seasons and more than a thousand episodes shown in 183 countries. 23 animated films have been based on the characters. There are now over 900 fictional little pocket monsters and the game’s ninth and latest generation is scheduled for release this year.

Most important to Millennium and the world of print, the game was originally also launched as a collectible card game and continues to be very popular in the paper-based world. 86 sets have been published in English and almost as many in Japanese. Rare cards have sold for in excess of $350,000 and at least one unopened original box set sold for more than $1 million. No wonder that on its website Millennium promotes production site security as one of the company's differentiating factors. As of March 2021, over 34.1 billion cards have been sold worldwide.

Neither the buyer nor seller disclosed the percentage that the Pokémon TCG cards represent of Millennium’s revenue, so we cannot be sure how concentrated is the relationship. Nonetheless, the president of the Japan parent company stated that “Millennium Print Group has been an important partner to The Pokémon Company International for many years.” Clearly, Millennium’s focus on building expertise in printing quality trading cards and serving this significant, but critical, customer was instrumental in Pokémon’s decision to convert Millennium from independent vendor to captive supplier.

2022 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
Snow Peak CapitalNo DataBoulder, COSandy AlexanderNo DataClifton, NJ4/26/22No DataAcquisition
(New Direction)		Commercial printingLink
TricorBraun
(Port co. AEA Investors)		No DataSt. Louis, MOPBFYNo DataBrea, CA4/21/22No DataAcquisitionFlexible packaging distributorLink
Agfa-Gevaert Group$2,001Mortsel, BelgiumInca Digital Printers
(Div. Screen)		No DataCambridge, UK4/20/22No DataAcquisitionDigital inkjet printersLink
Pokémon CompanyNo DataTokyo, JapanMillennium Print GroupNo DataMorrisville, NC4/18/22No DataAcquisitionTrading cards & packagingLink
Fortis Solutions Group
(Port co. Harvest Partners)		No DataVirginia Beach, VAProfecta LabelsNo DataSt-Hubert, QC4/15/22No DataAcquisitionLabel printingLink
News Media AllianceNo DataArlington, VAAssociation of Magazine MediaNo DataWashington, DC4/13/22No DataMergerTrade associationLink
NahanNo DataSt. Cloud, MNIntellus Mail DivisionNo DataMontgomeryville,
PA		4/13/22No DataAcquisitionDirect mail printingLink
Premium Label & Packaging
(Port co. Dunes Point Capital)		No DataRye, NYHP Mile
(Incl. Privateer & Label One div.)		No DataSyracuse, NY4/11/22No DataAcquisitionPharma label printingLink
Peak Technologies
(Port co. Sole Source Capital)		No DataLinthicum Heights, MDGraphic LabelNo DataYakima, WA4/8/22No DataAcquisitionLabel & tag printingLink
Brook + Whittle
(Port co. Genstar Capital)		No DataNorth Branford, CTCustom Labels Group
(Div. Cenveo Worldwide)		No DataStamford, CT4/8/22No DataAcquisitionLabel printingLink
Midland Paper$1,000.0Wheeling, ILJ. SchmidNo DataPrairie Village, KS4/5/22No DataAcquisitionBranding & creative servicesLink
CCL Industries$4,393Toronto, ONAdelbrasNo DataVinhedo, Brazil4/4/22No DataAcquisitionLabel & tape printingLink
Fortis Solutions Group
(Port co. Harvest Partners)		No DataVirginia Beach, VALabel TechNo DataSomersworth, NH4/4/22No DataAcquisitionLabel printingLink
H.I.G. CapitalNo DataMiami, FLPixelle Specialty Solutions
(Port co. Lindsay Goldberg)		No DataSpring Grove, PA4/4/22No DataAcquisition
(Houlihan Lokey)		Paper manufacturingLink
Canon Production Printing
(Div. Canon)		$3,550Tokyo, JapanEdaleNo DataHampshire, UK4/4/22No DataAcquisitionNarrow web printing pressesLink
View Newspaper GroupNo DataLapeer, MISherman PublicationsNo DataOxford, MI4/2/22No DataAcquisitionCommunity newspapersLink
    
   
2022 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:
Access Direct Mail, Inc.4/13/22No Data22-01482Sarasota, FL11thMiddle Florida
Orlando		Caryl E. DelanoMelody D. GensonDirect mail printing
Chapter 7 Filings:
Four Star Reproductions, Inc
dba Four Star Color & Red Oak Packaging		4/28/22No Data22-13465Newton, NJ3rdNew Jersey
Newark		Stacey L. MeiselLeonard S SingerFolding carton printing
The Riegle Press, Inc.4/27/22No Data22-30669Flint, MI6thEastern MI
Flint		Joel D. ApplebaumPeter T. MooneyCommercial printing
Midpoint Packaging, LLC4/12/22No Data22-04230Downers Grove, IL7thNorthern IL
Chicago		Janet S. BaerJoshua D. GreeneLabel printing

  
2022 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 PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
No Plant Closures Found this Month------------------------

↧
↧

Paper Industry in Transition – May 2022 M&A Activity

June 7, 2022, 2:51 pm
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Paper-based Industries are in Flux

As a result of the changes occurring in the paper industry, many printing and packaging companies are struggling to procure the paper they need, the grades they require, at the time they would like, and in a sufficient quantity necessary to fulfill customer orders. This is an abrupt turnabout for many companies that have striven for years to increase customer orders, always completely confident that the required paper substrates would be available on a just-in-time basis. Distributors gladly stocked and warehoused multiple grades at their own expense, ready to ship immediately, and often delivered paper on demand with extended credit terms. Some printers even enjoyed paper stocked on their premises on a consignment basis, ensuring sufficient supply without tying up excess working capital.

At least for the foreseeable future, those days of paper plenty are over. Printing and packaging company owners report that they are spending considerable time every day just procuring needed paper stock. The efficiency inherent in longer run lengths is lost when orders are filled with multiple shorter runs requiring repetitive press makereadies. Fussy buyers have lowered their paper standards, accepting lesser grades in order to meet deadlines. Shortages are being filled in with substitute grades, sometimes several different papers used within the same print run. Distributors are enforcing paper allocation schemes based on prior years usage, hindering the growth of their printing industry customers. Credit terms have tightened considerably, with slow payers cut off or required to adhere to self-liquidating payment policies. Price increases have become routine, which must be passed on to customers who have and will consider other alternative (electronic) communication choices.

Exacerbating the problem, printing companies have been buying whatever paper they can get whenever it becomes available and stocking up. This is completely understandable as each company seeks to defend its own position and viability, but clearly this makes the problem worse for the industry as a whole. Building up inventory has its cost, occupying valuable space and increasing net working capital requirements. Eventually this will run its course, as the hoarded paper reaches an equilibrium with available space and capital. However, during the buildup phase of increased inventory levels, the hoarding tendency just makes the situation worse. Just like that other paper shortage, that of toilet paper when the pandemic broke out.

M&A Activity Hits All Levels of Paper Industry

The paper industry has been in flux over the past year, with transactions impacting all levels of the supply chain, from pulp to distribution.


Paper Making Consolidates, Specializes & Converts

Canadian-based Kruger acquired the DKP Pulp subsidiary of Domtar in a transaction that was a derivative forced sale by Domtar. The Canadian Commissioner of Competition required Domtar to divest the mill as a condition to approve its acquisition by Paper Excellence. DKP Pulp owns and operates the Kamloops Mill in British Columbia which produces softwood bleached pulp and unbleached softwood kraft pulp. Kruger announced that the acquisition will secure the supply of pulp for some of its paper mills, including in Quebec where the company is constructing two state-of-the-art tissue plants. Not limited to tissue papers, Kruger also makes coated publication printing grades, newsprint, and paper designed specifically for inkjet web presses.

In a transaction announced in May 2021, and closed late last year, 175-year-old publicly listed Domtar was acquired in an all-cash deal for $3 billion by the relative newcomer privately-owned Paper Excellence Group. Domtar, much larger and with 21 manufacturing facilities and customers in 50 countries, is now private and controlled by the much smaller British Columbia-based Paper Excellence company which operates seven mills in Canada. However, despite protestations to the contrary, Paper Excellence appears to have connections to and the backing of the billionaire Widjaja family of Indonesia, owners of Asia Pulp & Paper, among other corporate holdings. This relationship matters to those concerned with the environmental impact of deforestation and destruction of wildlife habitat, accusations that have plagued AP&P’s operations in Indonesia and Brazil.

Domtar is currently well on its way to complete the process of converting a printing and writing paper mill in Kingsport, Tennessee, into a containerboard mill. The mill was shut down in early 2020 in an effort to balance supply with demand for printing papers which had steadily declined. When the pandemic hit and the demand for printing papers temporarily plummeted, Domtar moved forward with tentative plans to convert the mill which was in the works before its acquisition by Paper Excellence. The conversion will be complete in late 2022 and the mill re‑configured to supply regional corrugators with products made from 100% recycled fiber. As a result, there will not be any more printing grade papers emanating from this mill. The general manager of the Kingsport mill recently confirmed Domtar’s long-term goal to convert additional mills to produce recycled containerboard products, including mills in Arkansas, Kentucky, and South Carolina. These are expensive capital projects, each conversion costing several hundreds of millions of dollars. Now with the backing of Paper Excellence, and the apparent family money supporting the North American investments, the handwriting is on the wall that funding will be in place to complete more conversions, further tightening supply in the market for printing grade papers.

Likely to be the most significant transaction impacting the printing industry is the sale of what’s left of Verso to Swedish paper company BillerudKorsnäs, announced in December 2021 and completed in March. The impact of this transaction will be keenly felt by the printing industry over the next seven years as BillerudKorsnäs executes its plan to convert approximately three-quarters of the acquired paper making capacity to paperboard grades designed for packaging applications. Longtime print industry veterans will recognize the name Escanaba as a production grade paper used in publications, catalogs, and commercial applications. The mill which gave its name to the paper grade, in Escanaba, Michigan, the largest in the Verso portfolio, is scheduled to be completely converted over to packaging grades. The resultant loss of capacity to produce printing grade papers will further tighten supplies to the commercial, book, direct mail, catalog, label, and publication segments of the industry.

In April, H.I.G. Capital, which has significant holdings in printing, packaging, and related companies, acquired Pixelle Specialty Solutions. Pixelle was formed in 2018 by PE firm Lindsay Goldberg with the express intent of building out a profile of specialty paper mills that eventually included four mill sites with twelve paper machines. Specialized papers produced by Pixelle include release papers, casting liners, book papers, carbonless form stock, security paper, and various other niche products. Two of the mills came from Verso Corporation, itself recently acquired. Notably, Pixelle assiduously describes its products as specialty grades and strives to find niches within the larger market for commodity printing grades.

For more detail about the transactions that have impacted the conversion to brown paper, as well as the move to specialty niches within the larger paper industry context, see Printing Papers Get Squeezed Out – February 2022).

Paper Distributors Move into Jan-San; Jan-San Moves into Paper

As the demand for printing papers declined over the past several years, the major paper distributors kept up a steady drumbeat of acquisitions, purchasing many of the formerly independent family-owned paper distribution companies. Lindenmeyr Monroe, subsidiary of industry giant Central National-Gottesman, recently acquired the much smaller New Jersey-based Paterson Papers, in a move indicative that the major pickings have already been plucked. Mac Papers & Packaging, a portfolio company of Monomoy Capital, acquired Dependable Packaging Solutions, a south-Florida based distributor of corrugated products, point‑of‑purchase displays and packaging supplies.

In another concurrent trend, paper distributors began to branch out and distribute other graphic supplies and, in some cases, acting as sales representatives for graphic production equipment including wide format machines. Further declines in demand precipitated the move by some into more generalized supplies related to the janitorial and sanitary needs of their customers’ facilities, otherwise known as the jan‑san business. Mac Paper & Packaging, Lindenmeyr Monroe, and Veritiv, all have jan-san offerings on their websites. In a transaction that portends possible moves in the other direction, Imperial Dade, a family-owned operation headquartered in Jersey City, New Jersey, acquired the Canadian business of Veritiv. Imperial Dade’s operations focus on supplies for food service, janitorial, other facility-related needs, and now print. The company has grown via acquisitions; Vertiv’s Canadian operations is Imperial Dade’s 47th purchase. Expect further blurring of the lines between jan-san and printing paper distributors, as printing paper distribution becomes less of a specialty and is subsumed under more broadly-based distribution companies.
     
2022 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
Allegra Marketing Print MailNo DataAsheville, NCDaniels GraphicsNo DataAsheville, NC5/31/22No DataAcquisition
(Graphic Arts Advisors)		Commercial printingLink
Avery
(Div. CCL Industries)		$4,664Toronto, ONFloramedia Group$62.0Westzaan,
The Netherlands		5/31/22$51.6AcquisitionHorticulture tags & labelsLink
SugarHouse IndustriesNo DataSalt Lake City, UTImaginosNo DataMurray, UT5/31/22No DataAcquisitionWide format printingLink
Quad-C ManagementNo DataCharlottesville, VACatapult Print and PackagingNo DataOrlando, FL5/26/22No DataAcquisitionLabel printingLink
ProAmpac
(Port co. Pritzker Partners)		No DataCincinnati, OHSpecialty PackagingNo DataFort Worth, TX5/24/22No DataAcquisitionBags, wraps & filmsLink
Kruger Specialty Papers
(Div. Kruger)		No DataMontreal, QCDKP Pulp
(Sub. Domtar)		No DataKamloops, BC5/12/22No DataAcquisitionPaper pulp millLink
Phase 3 Marketing and Communications$27.8Atlanta, GAGraphic Visions UnlimitedNo DataAtlanta, GA5/11/22No DataAcquisitionCommercial printingLink
Brook + Whittle
(Port co. Genstar Capital)		No DataNorth Branford, CTDiamond Flexible PackagingNo DataNorthbrook, IL5/11/22No DataAcquisitionFlexible packaging & bagsLink
IconexNo DataDuluth, GALiberty GreenleafNo DataPhoenix, AZ5/9/22No DataAcquisitionReceipt & packaging papersLink
Marquis Book PrintingNo DataMontreal, QCLogistics Services
(Div. Georgetown Terminal Warehouses)		No DataGeorgetown, OH5/5/22No DataAcquisitionBook distribution servicesLink

   
2022 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:
Color Graphics R Us Design and Printing, Inc.5/11/22No Data22-13858Belleville, NJ3rdNew Jersey
Newark		Vincent F. PapaliaDavid L. StevensPrinting & copying
Chapter 7 Filings:
No Chapter 7 Filings Found this Month---------------------------

   
2022 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 PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
MC Packaging9/8/22No DataFarmingdale, NYNoneN/AMay-22Corrugated boxes & folding cartonsLink
Benton Announcements7/14/22No DataBuffalo, NYNoneN/AMay-22Trade finishingLink
Sauers Group7/1/22No DataStone Mountain, GANoneN/AMay-22Commercial printingLink
Omega Printing6/28/22No DataBensenville, ILNoneN/AMay-22Commercial printingLink
Hamilton Web Printing facility6/9/22No DataStony Creek, ONMetroland Media
(Div. Torstar)		Mississauga, ONMay-22Newspaper printing plantLink
↧

Commercial Print Awakes from M&A Slumber – June 2022 M&A Activity

July 8, 2022, 3:00 am
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Commercial Print M&A Activity Falls During Covid Period

In the three years leading up to the pandemic that broke out in early 2020, M&A activity in the commercial printing segment, as we define it,* averaged 43 transactions per year. For the past two years, the number of M&A transactions in the commercial printing segment has fallen to 25 and 26 in each year, respectively, or otherwise stated, approximately two per month.

During the prior twelve months leading up to the end of the second quarter of 2022, there was one month with no M&A deals in the segment and four months with only one deal that we counted in the commercial printing segment. Of the 26 transactions in the twelve months ended June 2022, five of those occurred in just the past month. These numbers contrast with what we found in 2013, two years after we started the Target Report, when the average number of transactions in the commercial printing segment was close to 6 per month, every month. 

It is too soon to tell whether this might portend a return to the norm of the pre-pandemic era, however the nature of the transactions suggests some trends that are likely to continue even if the deal count does not.

Companies Do Not Live on Print Alone

Post Capital Partners announced the acquisition of Ironmark, a diversified provider of marketing production services located in Annapolis Junction, Maryland. The acquired company was originally focused solely on printing services and operated from 1955 to 2011 under the banner Frank Gumpert Printing. In 2011, the company merged with Corporate Printing Solutions and was renamed CPS Gumpert. According to the company’s website, the combined entities grew and began offering a multitude of graphic and marketing services in addition to traditional offset printing, expanding into digital and large format printing, graphic design and web development, event promotions, promo products and e-comm services.

In the press release announcing the purchase of Ironmark and establishment of the firm as a new platform for future investments, Post Capital introduces Ironmark to its audience as an “image company” with plans to “further build upon its omni-channel marketing delivery platform.” While not eschewing the company’s roots in printing, noting that Ironmark has a “strong legacy in print-based marketing solutions,” the announcement elaborates that the company “provides a fully-integrated suite of services including commercial print (digital, offset and wide-format), digital marketing and web development, creative agency, promotional products management and a range of logistics services including procurement, warehousing, kitting, mailing, and e-commerce fulfillment, which enables its customers to realize the benefits of spend and vendor management consolidation with a single, omni-channel provider.” The message is clear, this is not your grandfather’s printing company. Rather, this new platform within the private equity universe is a marketing services production engine.

Also in June, Graphic Village announced the purchase of Sunrise Hitek Group in Chicago. The acquired company provides a wide variety of printed products and extends Graphic Village’s footprint west to Chicago. Based in Cincinnati, Ohio and with backing from Revitalize Capital, Graphic Village has been a serial acquirer of a diversified collection of graphic service providers. Similar to Ironmark, Graphic Village has its beginnings as a pure commercial printer. 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 Graphic Village as the new graphic services platform for Cincinnati-based private equity firm Revitalize Capital. 

Well down the pathway to being a diversified marketing services production provider, the first words on Graphic Village’s website set the tone with “Welcome to Graphic Village, your multichannel marketing solutions provider.” The inference is clear, this is not your run-of-the-mill printing company. (For more about Graphic Village’s acquisition journey, (see Regional Print Consolidator Builds Diverse Offerings - May 2020). 

Regional, Not National, Consolidation

In addition to extolling the virtues of its expanded services, Graphic Village explicitly noted that the location of the acquired company, Chicago, was a key strategic rationale behind the acquisition. This aligns with another clear trend we have noted. Healthy commercial printing companies are building out a regional network of locations via acquisition, in contrast to leaping right from a central base to a national strategy of networked commercial printing companies. That concept, which was the strategy du jour at the turn of the century, eventually faded as Consolidated Graphics (CGX), Cenveo (né Mailwell), Printing Arts America, and Nationwide Argosy, among others, all were acquired, absorbed, deconsolidated, or simply disintegrated back into separate printing companies. 

Representative of the current trend to build out regionally, Paper Airplane, a commercial printing company based in Birmingham, Alabama, acquired Colonial Printing and Packaging, located in Huntsville, Alabama. Paper Airplane announced that it was assuming operations at the Huntsville location and would offers services there as well as at its headquarters in Birmingham. The new location is approximately an hour and a half away, a good example of the regional trend consolidation trend we have seen elsewhere (see Commercial Printing: Consolidation or Regional Expansion? – November 2019).

There are exceptions to this regional consolidation trend. Missouri-based ColorArt, with backing from JAL Equity, has rapidly built up a network of acquired commercial printing companies, with locations ranging from Southern California and Las Vegas in the west, a smattering of locations in every state that connect from New Mexico all the way up to Michigan, east to Long Island in New York, and down to Florida. Ironically, in its most notable transaction, in June 2021, ColorArt acquired the commercial print division of the disintegrating Cenveo which included three major printing facilities (see CJK Goes Global as Cenveo Unwinds – September 2020). More recently, in February 2022, ColorArt acquired Cockrell Enovation, a commercial printing company in Fort Worth, Texas. The strategy is clearly national, opportunistic, and primarily print-centric.

In another twist of the patchwork of consolidation, deconsolidation, and re-consolidation, earlier this year the aforementioned regional consolidator Graphic Village picked up the Cincinnati division of formerly active consolidator OneTouchPoint. With backing from ICV Partners, OneTouchPoint was an active national player and an early proponent of layering marketing services on top of a network of print providers. However, OneTouchPoint has gone quiet on the buy side since right before the pandemic broke out in February 2020, when the company acquired Bluewater, a digital marketing services company. It remains to be seen if the sale of the Cincinnati operation to Graphic Village is a one off divestiture or the beginning of another deconstruction.

We have no doubt that these two trends will continue, exemplified by the recent uptick in deals within the broadly defined commercial printing segment. The stronger players will continue to move upstream from pure print providers and superimpose a myriad of marketing services on top of their basic analog and digital print capabilities. Some of those same top performers will also see regional expansion as their best path to growth since the overall market is, depending on who you ask, either stable or declining, but not increasing.

*In our lexicon, we draw a wide circle around the term “commercial printing” to include everything from the main street print and copy shops up to and including RR Donnelley. In essence, if the printed product of the acquired company is primarily used for marketing purposes, versus labels or folding cartons, for example, then we classify the transaction within the overall commercial printing category.
   
2022 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
Green Bay PackagingNo DataGreen Bay, WIInterstate PackagingNo DataAlbert Lea, MN6/30/22No DataAcquisitionCorrugated cartonsLink
Fortis Solutions Group
(Port co. Harvest Partners)		No DataVirginia Beach, VAAnchor PrintingNo DataNovi, MI6/30/22No DataAcquisitionLabels & flexible packagingLink
Post Capital PartnersNo DataNew York, NYIronmarkNo DataAnnapolis Junction, MD6/22/22No DataAcquisitionMarketing production servicesLink
Carpenter Newsmedia
Affil. Boone Newspapers		No DataNatchez, MSDaily News of Bowling GreenNo DataBowling Green, KY6/22/22No DataAcquisition
Cribb, Cope & Potts		Community newspapersLink
TC Transcontinental$2,176Montreal, QCBanaplastNo DataArmenia, Colombia.6/22/22No DataAcquisitionFlexible packagingLink
Central National Gottesman$6,200Purchase, NYLewis Paper InternationalNo DataAddison, IL6/20/22No DataAcquisitionPaper & supplies distributionLink
Association for PRINT Technologies (APTech) No DataFranklin, TNWhatTheyThinkNo DataSt. Paul, MN6/15/22No DataAcquisitionPrinting industry publisherLink
iSignNo DataBoyertown, PAAcorn Sign GraphicsNo DataRichmond, VA6/15/22$0.1363 Sale in Ch. 11Signage businessLink
Syracuse Label & Surround PrintingNo DataNorth Syracuse, NYMacaran Printing ProductsNo DataCohoes, NY 6/13/22No DataMergerLabel printingLink
Minuteman Press Spokane ValleyNo DataSpokane Valley, WALancer Ltd. Commercial PrintingNo DataSpokane Valley, WA6/10/22No DataAcquisitionPrinting & copyingLink
SummaNo DataGistel, BelgiumValianiNo DataCertaldo, Italy6/9/22No DataAcquisitionFlatbed cutting devicesLink
Paper AirplaneNo DataBirmingham, ALColonial Printing and PackagingNo DataHuntsville, AL6/8/22$3.0AcquisitionCommercial printingLink
Fujifilm$22,500Tokyo, JapanUnigraphicaNo DataLiechtenstein6/8/22No DataAcquisitionPrinting system integratorLink
Electronics for Imaging (EFI)
Port Co. Siris Capital Group		$1,020Foster City, CAInèdit SoftwareNo DataBarcelona, Spain6/8/22No DataAcquisitionTextile printing softwareLink
Orbus Exhibit & Display Group
Port co. Tenex Capital Management		No DataWoodbridge, ILSEG Systems & ServicesNo DataCharlotte, NC6/6/22No DataAcquisitionRetail displaysLink
Graphic Village
(Port co. Revitalize Capital)		$22.0Cincinnati, OHSunrise Hitek No DataChicago, IL6/5/22No DataAcquisitionCommercial printingLink
Sigler CompaniesNo DataAmes, IAAlphaCopies (w/ FastSigns)No DataAmes, IA6/2/22No DataAcquisitionPrinting & copyingLink
A/E Graphics |Epic ColorNo DataBrookfield, WIB&L Graphic SolutionsNo DataJackson, WI6/2/22No DataAcquisitionWide format printingLink

   
2022 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:
Premier Modern Commercial Printing Company6/7/22No Data22-41296Burleson, TX5thNorthern TX
Fort Worth		Edward L. MorrisMichael S. MitchellCommercial printing
Chapter 7 Filings:
No Chapter 7 Filings Found this Month---------------------------

   
2022 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 PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
No Plant Closures Found this Month------------------------
↧

Cenveo Returns to its Roots – July 2022 M&A Activity

August 7, 2022, 7:49 pm
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Good Times in the Envelope Business

In what appears to be a positive end to a long and tortuous road, the management team of Cenveo has completed a management buyout of the company. The Burton family, which has effectively controlled the company since 2005, is now collectively the majority shareholder, with the balance of the equity owned by other senior executives.

Cenveo, which started as an envelope manufacturer over one hundred years ago, and at one time seemed bent on acquiring anything but envelope manufacturers, has now been pared back down to its core. What remains is an envelope printing and converting powerhouse. According to the press release announcing the management buyout, “Cenveo is now exclusively an envelope focused business and the largest envelope converter in North America.”

The management buyout transaction may be an example of brilliant strategic planning, or simply good luck getting the timing just right. The envelope business has gone from being a highly price-sensitive commodity business to become a critical component in the print-centric direct mail and transactional document supply chain. For those readers of The Target Report who are not intimately familiar with the printing business, let’s just say that printers and mailers have been scrambling to obtain sufficient quantities of envelopes to complete customer orders. With the ongoing paper shortage (see Paper Industry in Transition – May 2022), converters have resorted to filling orders with brown paper stocks that are more difficult to convert into envelopes and tougher for direct mail printers to process, in lieu of normally widely available standard white paper.

The supply-demand curve has inverted, envelopes are in demand and in short supply. Presumably, this has been good for envelope manufacturers, at least until the market comes back into balance. Cenveo is, finally, in a good spot.

Cenveo – Unwinding a Roll-Up

When we last wrote about Cenveo’s stream of divestitures, in the fall of 2020, the company had just completed the sale of its Cenveo Worldwide Publisher Services division to CJK Group. This transaction followed right on the heels of the sale of a publication printing plant in Pennsylvania and a fulfillment and digital printing plant in Maryland, both sold to Intellicor, a Pennsylvania-based direct mail roll-up. In addition to these divestitures, Cenveo completed a long string of plant closures, wrapping up with the shutdown of the former Cadmus Communications publication printing plant in Richmond, Virginia. These were only the most recent transactions in a steady drumbeat of divisional sales and plant closures, all surrounding the filing for Chapter 11 bankruptcy protection in 2018. Throughout all this churning, it was difficult to discern if there was any rhyme or reason to the unwinding. The divisions that most printing-related companies would consider to be prize assets, such as manufacturers of folding cartons, shrink sleeves, and labels - all went on the chopping block. There was even, in the midst of the frenzied disassembly, a sale of an envelope company, Quality Park Envelope in Minneapolis, to LSC Communications. If management was executing a planned strategy to convert the conglomerate to a pure envelope company, it was nonetheless not apparent at the time (see CJK Goes Global as Cenveo Unwinds – September 2020).

The Picture Gets Clear

In August 2021, the printing world learned that a new consolidator in the commercial printing segment had stepped up to the big stage and acquired the commercial printing business of Cenveo, including three large printing facilities in Eureka, Missouri, Amarillo, Texas, and San Antonio, Texas. With financial backing from JAL Equity, the consolidator had quietly built up a national network of 15 printing plants. The new entity was named ColorArt, an apparent homage to the Missouri plant’s original owner before being acquired by Mail-Well, the predecessor to Cenveo (more on this later). With this sale, Cenveo took itself out of the highly competitive commodity-level high-volume commercial printing business.

Once more staying in the divestiture mode, Cenveo unloaded its Custom Labels Group, in a sale earlier this year, to Brook + Whittle, the label, shrink sleeve and flexible packaging roll-up currently backed by Genstar Capital. Now distilled down to purely an envelope manufacturing company, Cenveo was poised for the management buyout.

How did it get this Crazy?

Cenveo traces its roots back to 1919 when two entrepreneurs moved west from Missouri and founded the Rocky Mountain Envelope Company. With the rapid economic growth of the Denver region, the company took off, along with many other “Rocky Mountain” brands, so the founders completed the first rebranding and began manufacturing “Mail-Well” products under the new corporate name, Rockmont Envelope Company.

It was all envelopes until the late 1950s when the company made some modest inroads into printing stationery and paper bags. In 1960 Rockmont began to diversify, first into school supplies, notebooks, memo pads and tablets. The company rebranded once again as Pak-Well, with Rockmont Envelope now structured as the company’s subsidiary. The company did not escape the early 60’s go-public craze for mid-size manufacturers and was taken public when revenue was slightly more than $13 million. In addition to its home base of Denver, Colorado, the company had manufacturing plants in Portland, Houston, Phoenix, Los Angeles, Salt Lake City, and Honolulu.

Reported earnings were never stellar. In the early 1970s, the company posted net earnings of only $1.74 million on sales of $53.8 million (3.23%), establishing a trend of low margins that would continue as the company grew.

Through a series of transactions, Pak-Well eventually became part of the paper company Great Northern Nekoosa Corporation, which subsequently was rolled into Georgia-Pacific in 1990. By this time, the division was back to strictly producing envelopes under the Mail-Well brand, as well as under the Wisco Envelopes brand.

The low margin envelope business was spun out of Georgia-Pacific in 1993 as the Mail-Well company, with 16 manufacturing plants (remember this number) that produced about 13 billion envelopes annually. Leverage was high, with $17 million in equity supporting $142 million of debt, another trend that would continue. Acquisitions were on the table from jump, including the 1994 purchase of American Envelope Company and the addition of Canadian envelope manufacturing Supremex in 1995 (subsequently one of the first spin-offs under Cenveo in 2005). In 1995 the company went public once again, decreasing leverage, although not for long. Margins remained tight, with reported net income of $8 million on sales of $597 million (1.34%).

1995 also marked the diversion of Mail-Well away from the commodity printed products business and into the business of very high-quality commercial printing, with the acquisition of the Graphics Arts Center in Portland, Oregon. Instead of plain-Jane envelope products, Mail-Well had entered the business of technologically-advanced high-craft printing of critical color marketing materials, such as annual reports and automotive brochures. It had also begun to compete in the business of providing trade printing services to the distributor market, with the acquisition of Murray Envelope in Mississippi.

Mail-Well was on a tear, competing with Consolidated Graphics to see which company could acquire more, faster. In 1998 alone, Mail-Well rang up 23 acquisitions, including the purchase of creme de la creme commercial printing company Anderson Lithograph in Los Angeles. The same year, the company entered the packaging business with the purchase of the label division of Lawson Mardon Packaging. In May of that year, Mail-Well completed a simultaneous merger with seven commercial printing companies in an exchange of stock, the largest of which was St. Louis-based Color Art with revenue of $75 million. By 1998, Mail-Well boasted revenue of $1.5 billion. However, net income remained a dismal, in relative terms, $21.7 million (1.45%).

Things began to sour in 2000, when the company reported sales of $2.43 billion and net income of $27.6 million (1.14%). The company now employed in excess of 13,000 people across the US and Europe, operating 110 printing plants. The turn of the millennium also marked the beginning of a long-drawn-out phase of restructuring, merger of operating divisions, and closure of facilities. The company rebranded again in 2004 to the somewhat perplexing name “Cenveo” (Rockmont Envelope anyone?)

The dealmaking days were not over, however, and in 2007 Cenveo purchased Cadmus Communications, further diversifying the company as a major provider of content management and production of scientific, technical, and medical journals.

In what now appears to have been a prescient move, Cenveo’s last major acquisition was the purchase of bankrupt National Envelope in 2013. The deal, structured as a 363 sale in the bankruptcy proceeding, was a bargain, reported to be $25 million for a $300 million revenue business. With this transaction, the latest in a string too long to recite here, the company returns to its roots. Cenveo is now an envelope manufacturer, producing approximately 50 billion envelopes annually in 14 plants across the US.

The question remains, can the new owners of Cenveo stick to the core business and when the time comes to grow once again by acquisition, will the path be clearly defined, strategically adjunctive, and financially accretive to the company?

Addendum - Other Envelope Players

Earlier this year in March, Tension Corporation, one of the largest manufacturers of envelopes in the US, announced the acquisition of the print division assets of Intellus Direct. The acquired division is the successor to the former IBS Direct, a direct mail and envelope converter located in King of Prussia, Pennsylvania. The plant operated under the short-lived name Intellus Marketing, a direct mail roll-up which acquired the IBS Direct plant in 2018, among other assets now sold off.

A new envelope manufacturing platform company with private equity backing was announced in July. CenterGate Capital, based in Austin, Texas, purchased United Envelope. The acquired company is based in Ridgefield, New Jersey and has additional manufacturing locations in Pennsylvania and Ohio. CenterGate is seeking add-ons in the envelope segment. However, not content to keep its focus strictly on envelopes, CenterGate also states that it will consider add-ons in flexible packaging, folding cartons, paper-based products, and other graphic arts services.
   
2022 July - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

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

Party #1 Address

Deal Party #2		Pre-Deal
Revenue
(US$Mil)

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

Notes		Link
WestRock$20,940Norcross, GAGrupo GondiNo DataMexico City,
Mexico		7/27/22$1,763.0AcquisitionPaperboard mills & packagingLink
JBF FinanceNo DataBuchillon,
Switzerland		Bobst Group$1,670Lausanne,
Switzerland		7/25/22$622.1AcquisitionPrinting & finishing equipmentLink
Koenig & Bauer (KBA)$1,163Wurzburg, GermanyCelmacch GroupNo DataBrescia, Italy7/22/22No DataMinority InterestFlexo presses for corrugatedLink
Mill Rock Packaging
(Port co. Mill Rock Capital)		No DataNew York, NYImpressionsNo DataSt. Paul, MN7/18/22No DataAcquisitionFolding cartonsLink
LBSNo DataDes Moines, IACover Material SalesNo DataHyannis, MA7/18/22No DataAcquisitionSpecialty paper distributorLink
United GMGNo DataElk Grove Village, ILLightbox GraphixNo DataMount Prospect, IL7/18/22No DataAcquisitionSignage & wide formatLink
Crisp ImagingNo DataCosta Mesa, CACoastal ReprographicsNo DataSan Luis Obispo, CA7/14/22No DataAcquisitionReprographics & wide formatLink
CenterGate CapitalNo DataAustin, TXUnited EnvelopeNo DataRidgefield, NJ7/13/22No DataAcquisition
(CIBC)		Envelope manufacturingLink
DynosNo DataTroisdorf, GermanyCheney Pulp and PaperNo DataFranklin, OH 7/13/22No DataAcquisitionNatural fiber paper pulpLink
Mayr-Melnhof Group$3,490Vienna, AustriaEssentra Packaging (UK & US)
(Div. Essentra)		$440.0Oxford, UK
Westchester, IL		7/12/22$371.0AcquisitionFolding cartons & labelsLink
RelycoNo DataDover, NHBusiness FormsNo DataRoanoke, VA7/11/22No DataAcquisitionBusiness formsLink
The Graphics Shop
(Div. Hackworth Reprographics)		No DataChesapeake, VABalco Sign & SafetyNo DataVirginia Beach, VA7/11/22No DataAcquisitionSafety sign printingLink
Plockmatic
(Sub. Grimaldi Industri Group)		No DataHägersten, SwedenIntec Printing SolutionsNo DataPoole, UK7/11/22No DataAcquisitionPrint finishing equipmentLink
Cenveo Mngt TeamNo DataStamford, CTCenveoNo DataStamford, CT7/11/22No DataMngt. BuyoutEnvelope manufacturingLink
Tenex CapitalNo DataNew York, NYOliver Printing & Packaging
(Port co. Pfingsten Partners)		No DataHauppauge, NY7/11/22No DataAcquisitionFolding cartonsLink
Yankee Publishing ESOPNo DataDublin, NHYankee PublishingNo DataDublin, NH7/8/22No DataSale to ESOP
(Atlantic Mngt)		Magazine publishingLink
SupplyLogic
(Port co Inverness Graham)		No DataKansas City, MOWebbMasonNo DataHunt Valley, MD7/7/22No DataMergerPrint & brand managementLink
Paper ExcellenceNo DataRichmond, BCResolute Forest Products$3,740Montreal, QC7/6/22$2,700AcquisitionPaper & pulp productsLink
Electronics for Imaging (EFI)
Port Co. Siris Capital Group		No DataFoster City, CACADlink TechnologyNo DataOttawa, ON7/5/22No DataAcquisitionGraphic production softwareLink

   
2022 July - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenue
(US$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:
Bill's Prestige Printing, Inc7/28/22No Data22-02691Eustis, FL11thMiddle FL
Orlando		Grace E. RobsonMichael E. GolubPrinting & copying
Royal Graphics, Inc.7/14/22No Data22-+07848Downer's Grove, IL7thNorthern IL
Chicago		Janet S. BaerWilliam D. ChernyCommercial printing

   
2022 July - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



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


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Challenge Graphics8/25/22No DataDeer Park, NYNoneN/AJul-22Commercial printingLink
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Search

The Target Report Annual Review – August 2022 TTM M&A Activity

September 8, 2022, 6:36 pm
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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 eleven 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 month's deal activity, and take a look back at the past twelve months from a high-level macro perspective. Our goal in this annual review process is to identify some long-term trends. Which segments have experienced more, or less, deal activity? What are the trends in the buyers’ rationale to complete 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 include the prior three years which bridge the pandemic period. This provides an illustration of the business climate in the printing, packaging and related industries: pre-pandemic, pandemic, and the current post-pandemic sweet spot.

In pure numeric M&A terms, the past twelve months were on par with the twelve months ended August 2021 and the twelve months ended August 2019. We identified approximately 217 transactions of interest during the past twelve months; compared to 218 last year. And 215 in the TTM August 2019. In the period ended August 2020, without question the period in which most companies took the biggest hit from Covid, we identified only 192 transactions in the segments we track, or otherwise stated, an 11.5% reduction from the norm of the three surrounding years. The market has moved on and Covid is in the rearview mirror.

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 steep 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. Beginning not long after, in August of 2020, deal activity had returned close to the norm and has continued apace ever since, with another cooling-off period last winter and early spring during the spread of the Omicron variant. The trend is now headed upward as indicated by the purple line representing the latest trailing twelve-month period. 



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, in addition to the more generalized commercial printing business, 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 our search to understand the market better, we categorize all the deals we have logged over the past eleven years 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 business challenges facing owners are most pronounced by studying bankruptcy filings and non-bankruptcy plant closings.

The next chart breaks down the M&A transactions over the past four 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 a meaningful change in the market. There are significantly fewer transactions structured as tuck‑ins within the commercial segment, both in absolute numbers and as a percentage of the total. In fact, the decline in the number of transactions in the commercial printing industry is almost entirely attributable to fewer companies closing up and moving their business over to the buyer’s production facility.

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.

Back in August of 2019, when we first began digging deeper into the rationale behind the industry M&A transactions, the percentage of deals in the commercial printing segment structured as a tuck‑in was a staggering 70%, a clear indication of overcapacity and likely a necessary shuttering of shops burdened with out-of-date technology. The percentage fell dramatically during the following two years to 44.4% and 48.3%, respectively. In the twelve months just ended, tuck-ins represented only 30.8% of the total. In absolute numbers, there were only eight tuck-ins in the most recent year, compared to twenty-eight noted in the 2019 analysis. This decline in tuck-in transactional activity indicates to us that there is less excess capacity in the current market.

There were 18 acquisitions in the commercial printing segment where the acquired facility was important to the buyer and will remain in operation, as-is-where-is. Seven of these were sold to “new entry” owners that were not previously invested in the commercial printing industry. Notably, the number of transactions in commercial printing that were completed by these new entrants increased in each of the past four years, from only two in 2019, then four, then five, and now seven in the latest year. Outsiders are once again interested in investing in the printing industry.

The following chart shows how the past four years compare, showing tuck-ins, existing businesses adding facilities, and new entry owners 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 is still the reason most often mentioned, but now followed closely by the desire to add a new service, a return to the earlier trend. 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 Print Awakes from M&A Slumber – June 2022). This regional consolidation trend has been in contrast to a couple companies executing a national roll-up strategy (e.g., JAL Equity and BR Printers) and clearly different from the disintegrated roll-ups from years past (see The Target Report: Cenveo Returns to its Roots – July 2022).

Many owners we talk with in the commercial segment tell us that their shops are quite busy. They share with us that their company is returning to and exceeding their pre-pandemic revenue. Availability of trained labor and limited paper supply have become the constraints on the business, rather than lack of customer orders. Almost without exception, owners we talk with are raising prices and they tell us that their customers are accepting the increases with less objection than experienced in many years. (We hear these comments across the various printing and packaging segments, not just from commercial printers).

Owners that had put their exit plans on hold are now ready to get back into the market or are already actively seeking a buyer. We expect that trend to continue and increase over the next couple of years. Consolidation will pick up steam as the impact of government subsidies fades, while balance sheets are still flush with cash, and hopefully before the next adverse event (storm, virus, attack, recession, etc.) The demographic imperative of an aging population is a strong driver for owners in the commercial segment to bring their companies to market. It is time to cash out rather than sign up for another round of investment and related long-term debt.

In another change in the market, private equity has warmed up to the commercial printing segment. We noted seven commercial print transactions in which private equity supported the transaction during the past year, a meaningful increase from the prior years.


Packaging

The packaging business is now the most active among the segments we track, by a factor of three-to-one over the number two segment, commercial printing. Packaging deal activity was red hot last year and heated up even more over the past twelve months. A multitude of private equity investment funds are driving transaction multiples up and up as they compete to consolidate a highly fragmented industry. Many packaging companies are family-owned, spanning two or more generations. At Graphic Arts Advisors, we have heard several credible stories of offers from private equity funds that out-of-the-gate open the conversation with suggested offers in the double-digits, irresistible opportunities to monetize and diversify family wealth.

The following chart is illustrative of buyer activity in the packaging business, broken down by primary product produced at the target company. Label manufacturing retains the lead in terms of number of transactions. The corrugated box segment has remained relatively quiet; once again we suspect because the low-hanging fruit has already been picked, not because there are any fewer boxes showing up on our front porches. The flexible packaging segment continues to be of keen interest to buyers, however the number of deals is constrained in some degree by the limited number of targets compared to other packaging segments. Also worth noting is the steady 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 (see The Target Report: Label Roll-Ups are Red Hot; Are Folding Cartons Next? – March 2022).

Our candidate for the most interesting development in the packaging segment during the past twelve months is the emergence of GPA Global as a roll-up bringing together traditional asset‑light outsourcing expertise with domestic production capabilities, both in the US and Europe. The moves by GPA to add localized production are indicative of the larger economic trend of onshoring brought on by the Covid pandemic and international political tensions. (See The Target Report: GPA Global Emerges as Packaging Consolidator – December 2021). GPA’s resulting network of packaging and printing plants bridges the US with west and east coast locations. The acquired former ASG Print operations in Poland serve the European market for GPA Global. (We have noted that the industrial printing segment in the US has also been positively impacted by this onshoring trend.)


When we dig into the rationale behind transactions in the packaging segment, a very different picture emerges as compared to commercial printing. Of the 74 transactions that we recorded over the past twelve months in the packaging segment, only three were reported to be tuck-ins; two were relatively small and produced labels, the third was the divestiture of a specialty flexible packaging division in a sale in pieces of a company that primarily produced packaging films. In most of 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. An increasing number of the packaging companies, fifteen over the past year, were sold to new owners that were not currently invested in this segment, a continuation of the trend over the past four years.


Private equity was involved in 56 of the 74 total transactions in packaging, 69% of the total, comparable to the past year on a percentage basis, an increase of twelve transactions in absolute terms. The roll-up model, with financial sponsorship from private equity, is still in full swing across the various packaging segments and as we have noted repeatedly over the past two years, is driving competition for midsize and larger label printing companies to a frenzied level of activity. Adding to the hustle, fifteen new players entered the packaging business last year, and nine of these were backed by private equity firms establishing a new platform for further acquisitions.

Seven 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, in January, Avery, a division of Canada-based CCL Industries, acquired International Master Products, a US manufacturer of horticultural labels and tags. They bolstered the new specialty four months later with another acquisition, the purchase in the Netherlands of the Floramedia Group, another specialized producer of horticultural labels and tags.

In seventeen instances, geographic expansion or diversity of the acquired locations was noted as a key element in the buyer’s logic. While fewer in number than reported last year, an expanded geographic footprint still looms large in buyers’ expressed logic for completing acquisitions.


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. We include retail display and trade show graphic production in this category, as well as the expanding business of indoor architectural environment graphics.

In a complete inverse of the Covid impact on the packaging segment, which thrived during the pandemic, the wide-format market took a big hit. Event, trade show, and retail graphics all came to a screeching halt in the Spring of 2020 and are only now approaching pre-pandemic volumes according to many owners we speak with. The trends we noted in the past are still evident; gone are the days of the uniqueness of digitally printed banners and wraps, the cool factor of flatbeds has chilled, and the easy margins that came with being first on the block to offer large inkjet prints have been compressed by competition. Pricing on entry-level equipment has come way down, finishing technology is automated, and overall barriers to entry are low. Differentiation in the wide-format business has moved from first-mover advantage to more complex online direct-to-customer systems, robust planning and installation capabilities, or value-added services such as framing prints for use as home or office décor.

Despite the challenges of the past two years, interest in the wide-format segment appears ready to resume as life returns to a post-Covid normal state. A notable example over the past year was the acquisition of Screaming Images, a wide-format printing company in Las Vegas, well-positioned to benefit from the resumption of events in America’s adult playground that doubles as a mecca for trade shows. Geographic diversity was cited by the buyer, Milwaukee-based Olympus Group, as the driving criteria for the purchase. The acquisition brings the company’s footprint to five locations, ranging from Nevada to Florida.

In the wide-format and related products segment, there are proportionately fewer tuck-ins than in general commercial printing. Consistent with the decline in transactional activity over the past two years, there were only two wide-format tuck-ins during the past year, with the seller’s plant shuttered and production consolidated in the buyer’s existing facility. While tuck-ins are usually indicative of excess capacity and with the maturation of the wide-format segment, we frankly expected more transactions as this segment was hit hard. Many wide-format shops pivoted to producing personal protection equipment and warning signage, something that they were especially well-suited for with flatbed cutters and the capability to print floor graphics. Nonetheless, we expect that there are some weaker players in the market and tuck-ins will pick up in this segment.


Three buyers noted geographic expansion as important to their decision to move forward during the past year, consistent with prior years and with the stresses on wide-format in the pandemic period. Three buyers cited adding or greatly expanding wide format as a service offering as the logic supporting their acquisition.

Only one transaction in the wide-format segment was backed by private equity, the purchase in August of AllOver Media by ShoreView Industries. AllOver Media, based in Minneapolis, specializes in out-of-home advertising including billboards and transportation graphics. The transaction represents a new platform company for ShoreView.

Despite the lull in wide-format transactions, the existing presence of several private equity-backed platforms in the segment portends more activity to come. We continue to believe that the trends in wide-format and related printing, especially the involvement of financial buyers and the smattering of distressed transactions, as noted below, are predictive of increased future 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 that happen to include some mailing capabilities. Therefore, we break out these highly specialized direct mail companies into a separate segment for analysis.

Transactional activity in the direct mail printing segment declined over the past twelve months, with a total of only four deals announced, versus eight and nine during the prior two years, respectively. Indicative of the overall health of the segment, there was only one tuck-in. For the second year in a row, there were no new entrants buying into the segment. Outsiders are either hesitating to invest in direct mail or are unable to convince sellers that the offered price is right. Our perspective is that current owners in the direct mail segment are confident, holding onto their companies, and themselves willing to invest in acquisitions.

Our choice for the notable transaction of the year in the direct mail segment has to be the acquisition of Mailing Services of Pittsburgh (MSP) by Direct Marketing Solutions (DMS). Based in Portland, Oregon, DMS is backed by Main Street Capital, a publicly traded investment firm headquartered in Houston. The combination of the two firms, with private equity backing, is a direct mail powerhouse and indicative of a trend we have noted in which direct mail companies (as well as transactional printing companies) are reaching across the country in their acquisition strategies to mitigate the degradation in postal delivery standards. This transaction was the only one in direct mail over the past year that involved private equity backers. There were no new PE‑backed platforms established in direct mail during the year.


In none of the direct mail transactions did the buyer mention adding a service element as their rationale to move forward with the deal, indicating that the buyers have the services they believe are necessary for now, rather they are adding facilities to increase capacity and expand the company’s footprint within the direct mail business.

Based on the transactional activity, as well as has been discussed with us in private conversations with owners, the direct mail industry appears to be doing quite well, but not on fire from an M&A perspective like packaging, nor are owners beginning an exodus as we believe is and will continue to be the case with many commercial printing company owners.


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. While this continues to be true in the commercial printing segment, this is less evident than in prior years.


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 continues to consolidate.

Despite the outbreak of Covid-19 and subsequent difficulties, the number of bankruptcies for the past twelve months across all segments once again decreased compared to prior years. Bankruptcy filings, across all the segments we track, decreased to 22 new filings, down from 29, 38, and 41 over the prior three years, respectively. We believe that this decrease is at least partially, if not mostly, due to the huge cash infusions 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, there were no bankruptcies in publishing, presumably the market has been rationalized, at least for the time being. Consistent with our observations above about the wide-format segment, the business appears to be improving and we found only two bankruptcies, down from seven last year.

Our nomination for the most significant bankruptcy filing during the past year is without question the August 6th filing of OSG Group Holdings along with a slew of affiliates and subsidiaries. OSG Billing Services, the predecessor company, was an early star buyer in our Target Report deal logs, beginning in 2014 and appearing no less than eight times. Aquiline Capital acquired the acquisitive OSG in 2017 and continued the roll-up of the transactional printing business, going quiet after the acquisition of Gabriel Group in January 2020. The Chapter 11 bankruptcy was filed as a prepackaged plan with a quick in-and-out of the bankruptcy process. If all goes according to plan, Pemberton Strategic Credit Holdings, the second lien lender, emerges as the new owners in a classic loan-to-own strategy, presumably washing out much or all of Aquiline Capital’s equity value. To many suppliers’ relief, the plan called for unsecured creditors to receive one hundred cents on the dollar of pre-petition debts. The transactional printing segment has been very quiet over the past four years, with no transactions noted in the segment during the past year. That may be about to change as we expect some fallout from even this most orderly of bankruptcies.


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 23, down from 33, 45, and 49 over the past three years, respectively.


As expected, general commercial printing companies represent the majority of printing facilities closing up shop. newspaper printing plants also closed in greater numbers than most other segments. Similar to our conclusion from the data on bankruptcy filings, we did not find any printing companies that closed up that were primarily in the publication or catalog printing business. However, we still hear of major titles ceasing to publish the printed edition, moving the content to a digital online experience, suggesting will be difficulties ahead in this segment as more titles go online only.



2022 August - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

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

Party #1 Address

Deal Party #2		Pre-Deal
Revenue
(US$Mil)

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

Notes		Link
Ironmark
(Port co. Post Capital Partners)		No DataAnnapolis Junction, MDMillennium Marketing SolutionsNo DataAnnapolis Junction, MD8/31/22No DataAcquisition
(Graphic Arts Advisors)		Marketing & branding servicesLink
Open Jar StudiosNo DataNew York, NYBway PrintingNo DataNew York, NY8/30/22No DataAcquisitionPrinting & copyingLink
Fortis Solutions Group
(Port co. Harvest Partners)		No DataVirginia Beach, VAIdenti-GraphicsNo DataMontgomery, IL8/30/22No DataAcquisitionLabels & flexible packagingLink
Aurelius GroupNo DataGrünwald, GermanyOffset Solutions Business
(Div. Agfa-Gevaert)		$747.3Mortsel, Belgium8/30/22$91.9AcquisitionPrepress suppliesLink
Incline EquityNo DataPittsburgh, PANovaVisionNo DataBowling Green, OH8/30/22No DataAcquisitionSecurity tapes & labelsLink
ShoreView IndustriesNo DataMinneapolis, MNAllOver MediaNo DataMinneapolis, MN8/24/22No DataAcquisitionOut-of-Home advertisingLink
Solar ArtNo DataLaguna Hills, CABrower Tinting & GraphicsNo DataRenton, WA8/22/22No DataAcquisitionWindow graphicsLink
Heath & Tasha SullivanNo DataCleveland, TNCarroll PrintingNo DataCleveland, TN8/20/22No DataAcquisitionPrinting & copyingLink
Ennis$410.8Midlothian, TX Gulf Business FormsNo DataSan Marcos, TX8/17/22No DataAcquisitionBusiness formsLink
Millcraft PaperNo DataCleveland, OHKW GraphicsNo DataSpringfield, IL8/16/22No DataAcquisitionBinding supplies & equipmentLink
SaatiNo DataAppiano Gentile,
Italy		Ikonics
(Sub. TeraWulf)		No DataDuluth, M8/15/22No DataAcquisitionImaging technologiesLink
Specialty Printing & MarketingNo DataShepherdstown, WV Grubb Printing & Stamp CoNo DataPortsmouth, VA8/15/22No DataAcquisition
(Corp Dev Assoc)		Commercial printingLink
Dallas Plastics
(Port co. Sole Source Capital)		No DataMesquite, TXMPP PackagingNo DataMontreal, QC8/15/22No DataAcquisition Packaging filmsLink
BR PrintersNo DataSan Jose, CAEgan PrintingNo DataDenver, CO8/12/22No DataAcquisitionCommercial printingLink
Esko
(Sub. Danaher)		No DataGhent, BelgiumTilia LabsNo DataOttawa, ON8/10/22No DataAcquisitionGraphic production softwareLink
Charter Next GenerationNo DataMilton, WIPolymer Film & Bag
(Div. Polymer Packaging)		No DataMassillon, OH8/8/22No DataAcquisitionBags & packaging filmsLink
Cox EnterprisesNo DataAtlanta, GAAxiosNo DataArlington, VA8/8/22$525.0AcquisitionOnline newsLink
EukalinNo DataEschweiler,
Germany		Adhesives SpecialistsNo DataAllentown, PA8/8/22No DataAcquisitionSpecialty adhesivesLink
CenterGate CapitalNo DataAustin, TXPrisma GraphicNo DataPhoenix, AZ8/4/22No DataAcquisitionCommercial printingLink
LabelinkNo DataAnjou, QCThe Label FactoryNo DataGeorgetown, ON8/3/22No DataAcquisitionLabel printingLink
LabelinkNo DataAnjou, QCTaylor LabelNo DataBrampton, ON8/3/22No DataAcquisitionLabel printingLink
The Southeast Iowa Union
(Div. Folience)		No DataCedar Rapids, IABelle Plaine Star Press Union
(4 titles) (Prop. Gannett)		No DataBelle Plaine, IA8/3/22No DataAcquisitionCommunity newspapersLink
DazPak Flexible Packaging
(Port co. H.I.G. Capital)		No DataCommerce, CAInno-lok
(Div. Polymer Packaging)		No DataMassillon, OH8/2/22No DataAcquisitionFlexible packagingLink
DazPak Flexible Packaging
(Port co. H.I.G. Capital)		No DataCommerce, CAAtlapacNo DataColumbus, OH8/2/22No DataAcquisitionFlexible packagingLink

   
2022 August - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



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


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
OSG Group Holdings
(Port co. Aquiline Capital)		8/6/22No Data22-10718Carlstadt, NJ3rdDelaware
Wilmington		John T. DorseyErin R. FayTransactional printing
Chapter 7 Filings:
No Chapter 7 Filings Found this Month---------------------------

   
2022 August - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



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


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Cover Material Sales9/8/22No DataHyannis, MANoneN/AAug-22Book cover material convertingLink
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Private Equity Pieces Together Print & Packaging – September 2022 M&A Activity

October 8, 2022, 8:07 pm
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The consolidation of the printing and packaging industry continues to pick up momentum as new financial players enter the field. The new contenders, mostly private equity firms with backing from multiple investors, usually move into an industry segment with an initial acquisition, a transaction that drives a stake in the ground, a deal that announces their intention to invest in and grow a business in that specific sector. That first foray into the particular business segment is likely to be a company that has sufficient size and profitability to be used as a launching pad for further acquisitions. From that initial platform investment, the investment firms aggressively seek out and complete multiple sequential bolt-on acquisitions to expand their footprint in the targeted market.

This trend has been most evident and prevalent in the label and flexible packaging segments where the PE-backed frenzy has, over the past several years, reached a fever pitch of activity. Multiple private equity buyers vying to build out their platforms to achieve significant market gravitas has led to sky-high purchase multiples for label printing companies, at least judged within the value context of the overall printing and packaging industry segments. 

As we have noted in previous Target Reports, our expectation has been that PE-driven consolidators would become interested in other print-centric segments, especially the manufacture of folding cartons. Similar to labels and flexible packaging, folding carton manufacturing is characterized by recurring revenues, strict color management, adherence to a variety of technical requirements related to the industry vertical being served, and a constant proliferation of brand extensions which requires continuity of customer interaction. These industry features are attractive to private equity firms that operate in the lower middle market, exactly the level of many family-operated privately-owned folding carton companies.

Unlike labels and folding cartons, the level of M&A activity in the commercial printing arena has been much quieter for several years. Commercial printing has a much higher dependence on the ebb and flow of marketing budgets. Internal production in commercial print environments is characterized by the staccato rhythm of job-shop workflows. Commercial print has been and is increasingly challenged by the ongoing transition of marketing communications to electronic media. As a result of these factors, M&A activity and enterprise values in the commercial printing segment have lagged behind the other print segments, with fewer competing buyers and lower purchase multiples. Critically, in today’s market-driven dynamic that is highly influenced by private equity, the financial players stayed on the sidelines and avoided the more generalized commercial segments of the printing industry.

There are signs of change. Several financial players have now emerged to sponsor significant platforms within the general commercial segment. However, commercial printing company owners should not confuse the appearance of a select few private equity funds in the segment with a return to the robust market and higher valuations that characterized the market for commercial printing companies in the nineteen-nineties. The private equity players entering the commercial printing segment have been mostly very selective, acquiring successful profitable companies with diverse service offerings including upstream creative services and multi-channel delivery of their customers’ communications. Run-of-the-mill commercial printing companies need not apply.

Folding Carton Veterans Get Back in the Game

Industry icons Marc Shore and Dennis Kaltman are back, establishing a brand-new platform company. Leaving no doubt about their intentions to be serious players as they return to the industry, the duo is heading up a new company, Max Solutions, with backing from private equity firm Jefferson Capital Partners. Shore and Kaltman worked together at Shorewood packaging and were supported by Jefferson Capital Partners in the formation of Multi Packaging Solutions, a highly successful folding carton roll-up that was eventually sold to Westrock, the massive publicly-traded paper and paperboard manufacturing company.

Rather than start with the acquisition of an existing production company, Max Solutions began by establishing two brand new manufacturing plants focused on production of folding cartons and labels for the health care and consumer markets. The first plant to open, a 100K square-foot facility in Bristol, Pennsylvania, began operations in July. The second, also a new plant, is a 150K square-foot factory in Concord, North Carolina, and is slated to open this month.

The company announced its first acquisition, the purchase of Ellis Group, Canada’s largest family-owned and operated folding carton company. The acquired company operates three facilities in the Toronto region. In addition to sheetfed offset capabilities, the company utilizes web-fed flexographic presses designed specifically for high-volume folding carton production.

Another entrant into the contest to consolidate the folding carton market is GPA Global, with financial backing from Sweden-based private equity firm EQT Partners. GPA Global has built up a network of folding carton plants, layered on top of the company’s core outsourcing expertise, including plants in Poland, Ireland, the United Kingdom, as well as US-based factories in Massachusetts and California (see GPA Global Emerges as Packaging Consolidator – December 2021 M&A).

The PE-backed roll-up of Oliver Printing & Packaging, sponsored by Pfingsten Partners, was recently traded out in a secondary buyout to Tenex Capital. Pfingsten established the platform in 2016 with the purchase of Cleveland area-based Oliver Printing, at the time a commercial printing company that had successfully transitioned a substantial portion of its business to folding carton production. Building on that initial base, Pfingsten acquired multiple folding carton companies, including Pohlig Packaging in Virginia, Boutwell Owens in Massachusetts, Professional Image in Oklahoma, and DISC Graphics in Hauppauge, New York where the company is now headquartered.

Other PE-backed players consolidating the folding carton segment include Radial Equity Partners with the Lewisburg Printing platform, Mill Rock Capital’s Mill Rock Packaging roll-up, and Wellspring Capital’s Rohrer. (For more, see Label Roll-Ups are Red Hot; Are Folding Cartons Next? – March 2022).

Commercial Printing Roll-Up Redux (Marketing Production Providers)

DCG One, based in Seattle, Washington, acquired Corporate Communications Group (CCG), based in Upper Marlboro, Maryland. Notably, DCG One bills itself as a “marketing services organization” and described its acquisition target as an “integrated commercial print and direct marketing company.” While neither company shies away from promoting their roots in the printing industry, nonetheless both DCG One and CCG clearly present their printing capabilities within the framework of a broad range of capabilities. In addition to print, the combined organization offers strategic marketing, creative design services, web design, grand format printing, promotional products, digital media marketing, fulfillment, direct mail services, and oh yes, printing.

DCG One has been backed by Clavis Capital Partners and Dobbs Management Service since January 2020. The transformation into a marketing service provider was underway at the time of the purchase, and then accelerated with the acquisition of the Garrigan Lyman Group, a branding and digital advertising agency with offices in Seattle and New York.

Post Capital Partners, a private equity fund that focuses first on its trust and belief in an experienced executive leadership team, and only thereafter will invest in a specific industry, continued its support of the team at Ironmark, with the acquisition of Millennium Marketing Solutions.* Based in Annapolis Junction, Maryland, Ironmark presents a comprehensive value proposition to its customers. With the moniker of an “Image Company,” Ironmark offers creative services, website design, database integrations, search-engine-optimization, web-to-print, digital media marketing, fulfillment, and oh yes, printing. (see Commercial Print Awakes from M&A Slumber – June 2022).

The purchased company, Millennium Marketing Solutions, is also based in Annapolis Junction, and over time transitioned from a small print shop into a full-service marketing firm. Areas of expertise include digital marketing, webpage design, graphic design, promotional products, signage, and oh yes, printing.

Labels Remain the Division One Segment

Labels continue to be the most sought-after segment, if gauged by the number of private equity consolidators that have been competing to pick up the diminished number of suitable independent label printing companies that remain in the lower middle market.

Fortis Solutions Group announced the acquisition of Digital Dogma, a label printing company based in Santa Fe Springs, California. Fortis is now backed by Harvest Partners which acquired the company in a secondary buyout from Main Post Partners in October 2021. Fortis has grown via acquisition from one small pressure sensitive label printing company in Virginia Beach to a national multi-product packaging manufacturer with over 1,300 employees across twenty-two plants.

Other active private equity players in the label segment include Incline Equity with platform company NovaVision, Quad-C Management with Catapult Print and Packaging, Dunes Point Capital with Premium Label & Packaging, Sole Source Capital with Peak Technologies, Genstar Capital with Brook + Whittle, Heartwood Partners with All American Label & Packaging, Morgan Stanley Capital with AWT Labels & Packaging, Sole Source Capital with I.D. Images, and Ares Management with Resource Label Group. And that is just the list of PE-backed platforms active in the label segment that have announced transactions in the first nine months of 2022!

* Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to Millennium Marketing Solutions in this transaction.
   
2022 September - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

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

Party #1 Address

Deal Party #2		Pre-Deal
Revenue
(US$Mil)

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

Notes		Link
Max Solutions
(Port co. Jefferson Capital Partners)		No DataNew York, NYEllis GroupNo DataPickering, ON9/30/22No DataAcquisitionFolding cartonsLink
Sonoco$6,540Hartsville, SCSkjern Paper$50.0Skjern, Denmark9/28/22No DataAcquisitionRecycled paperboardLink
JAL EquityNo DataSarasota, FLEagle ProductsNo DataKansas City, KS9/27/22No DataAcquisition
(Generational Equity)		Screen printing apparelLink
Gallant Capital PartnersNo DataLos Angeles, CASupplyLogic WebbMasonNo DataKansas City, MO9/26/22No DataAcquisitionPrint & brand managementLink
Keypoint Intelligence
Port co. Atar Capital)		No DataFairfield, NJKarstedt PartnersNo DataEden, NY9/20/22No DataAcquisitionPackaging consultantsLink
Adobe$17,190San Jose, CAFigma$400.0San Francisco, CA9/15/22$20,000AcquisitionOnline design platformLink
Environmental & Applied Solutions$4,700Ghent, BelgiumEsko, Pantone, X-Rite, Linx
(Sub. Danaher)		No DataGhent, Belgium9/14/22No DataDivestitureGraphic technologiesLink
The Occasions Group
(Div. Taylor Corporation)		No DataNorth Mankato, MNAccu Copy of GreenvilleNo DataGreenville, NC9/9/22No DataAcquisitionCommercial & packagingLink
CherryRoad MediaNo DataParsippany, NJMillbury-Sutton Chronicle
(4 titles) (Prop. Gannett)		No DataMillbury, MA9/8/22No DataAcquisitionCommunity newspapersLink
Label TraxxNo DataMilwaukee, WIBatchedNo DataCincinnati, OH9/7/22No DataMergerLabel workflow softwareLink
Label TraxxNo DataMilwaukee, WISitelineNo DataSan Francisco, CA9/7/22No DataMergerLabel workflow softwareLink
O'Neil PrintingNo DataPhoenix, AZBuckAZ CommunicationsNo DataPhoenix, AZ9/6/22No DataAcquisitionCompliance communicationsLink
Fortis Solutions Group
(Port co. Harvest Partners)		No DataVirginia Beach, VADigital DogmaNo DataSanta Fe Springs, CA9/1/22No DataAcquisitionLabel printingLink
DCG One
(Port co. Clavis Capital/Dobbs Mngt.)		$65.0Seattle, WACorporate Communications GroupNo DataUpper Marlboro, MD9/1/22No DataAcquisitionCommercial printingLink

  
2022 September - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenue
(US$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:
Automated Mailing Services, Inc.9/27/22No Data22-30224Huntington, WV4thSouthern WV
Charleston		B. McKay MignaultScott G. StapletonMailing services

   
2022 September - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



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


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
A&M Printing10/18/22No DataPleasanton, CANoneN/AOct-22Commercial printingLink
Gray Graphics9/22/22No DataCapital Heights, MDNoneN/ASep-22Commercial printingLink

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Direct Mail Providers Stretch Out – October 2022 M&A Activity

November 7, 2022, 6:36 pm
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Postage rate increases now occur with a regularity that many wish would apply to the delivery service itself. Concurrent with rate increases, the US Postal Service issued new service standards a year ago that effectively made the reality of slower mail delivery its new goal. Nonetheless, even with the longer delivery time standards, the latest USPS Service Performance chart indicates that the overall performance of the postal system is just now at the level achieved in 2020 when the pandemic shut-down was at its most restrictive. In the alternate reality that exists at the US Postal Service, its ten-year goal is to deliver mail on time 95 percent of the time. For now, any postal region that achieves a rating of 90.25 percent or greater of on-time delivery, in accordance with the new lower standards, gets an “Above Target” rating. For those readers of The Target Report in the direct mail segment, just imagine telling your customers that ten percent of their orders will be late, but that is your company’s standard, so it's ok.

Despite the increased postage costs and degradation of postal delivery standards in effect for the past year, marketers continue to utilize direct mail as an effective communication channel. As a response to the relaxed delivery time standards for mail traveling any significant distance, direct mail providers have responded by acquiring companies or establishing new facilities distant from their home base.

Regional Saturation, National Reach

Moore, the direct mail behemoth originally based in Tulsa, Oklahoma, has put another stake in the fertile ground for non-profit mailing services around Washington, D.C. with the acquisition of Communications Corporation of America (CCA). Over the past decade, Moore has built out a network of production facilities and support services laser-focused on serving the nonprofit organizations that require a steady outflow of fundraising and awareness messages to accomplish their mission. CCA now joins forces with the multiple Moore operations in the mid-Atlantic region.

Moore’s initial foray into the D.C. region was the 2009 purchase of the business and real estate assets of Barton-Cotton in a Chapter 7 bankruptcy proceeding. According to a press release at the time, Barton-Cotton’s expertise and customer base was in the non-profit community around Washington D.C. Barton-Cotton provided direct mail fundraising services, and also had a division that served religious organizations. Moore’s core company at the time, ResourceOne, based in Tulsa, Oklahoma, was also focused on working with non-profit organizations. The acquisition of Barton-Cotton was a natural fit for Moore, a company with plans to grow. That 2009 purchase in the midst of the Great Recession initiated a round of acquisitions and start-ups around the D.C. region.

The mid-Atlantic region was awash in non-profit organizations, and in a trend similar to the political direct mail and commercial printing businesses, the non-profit outreach business had become increasingly dominated by production procurement agencies that intermediated themselves in between the ultimate customers and the printing companies. Based in Vienna, Virginia, Production Solutions/PS Digital was a major player in the space, providing production management and procurement services focused on serving nonprofit organizations. Moore made its move in 2016 and acquired Production Solutions/PS Digital, heading upstream to enhance its position directly with the nonprofit organizations.

When the direct mail company EU Services shut its doors in 2017, Moore moved in quickly and set up a new company, Navistar, as a refuge and revitalized base of operations for the EU executive team and industry experts. EU Services originally operated as Envelopes Unlimited and over time had transformed itself into one of the early trailblazers applying digital printing to the direct mail industry. Those of us that competed in the east coast printing industry at the time may recall some of the excitement surrounding EU Services and its unique digital approach. That digital uniqueness eventually became commonplace, and when the end came for EU Services, Moore was there to pick up the pieces.

In March 2020, Moore reopened the former Colortree Group factory in Virginia. Colortree had been unceremoniously shut down in June 2019 when employees showed up on a Monday morning to find chains and locks across the doors. This sudden closure was an abrupt about-face from the optimistic picture painted in 2017 when management acquired the company from PE firm Boathouse Capital. Boathouse had originally backed management in 2011 in a roll-up strategy, starting with the combination of two Virginia direct mail printing companies, Colortree and Graphic Innovations. The roll-up strategy apparently stalled after the 2013 acquisition of Direct Impressions, another Virginia-based direct mail printer. Boathouse bailed out before the ship sank and sold the company back to the original management. The departure of Colortree left a gap in the market, as the company had significant expertise in printing and converting specialty envelopes often used in the non-profit solicitations business. Moore’s resurrection of the factory included a commitment to prioritize the hiring back of the former Colortree employees with their envelope production expertise.

Several months later in 2020, Moore launched Audience First, a database list service that aggregates self-declared data from millions of consumers. Using surveys, AudienceFirst seeks to learn and understand consumers’ potential reasons for giving. This data is combined with third-party behavioral and transactional data to produce more highly targeted campaigns which increase positive response rates.

Swimming further upstream into the creative realm of direct mail, in January 2021, Moore rebranded its agency division as Edge Direct. Based in Baltimore, Maryland, Edge Direct is a registered professional fundraising consultancy, dedicated to help nonprofits raise maximum funds and brand awareness in support of their mission. However, Edge Direct goes way beyond print, stating that its “multichannel approach is based on a passion for creating campaigns that combine right brain/left brain marketing tactics.” Communication media utilized includes television, radio, print, digital and social media channels, and of course, direct mail.

Returning to the mundane world of print and mail, Moore announced the acquisition of Tri-State envelope in December 2021. Along with the prior restart of the Colortree plant, and the acquisition of the Worcester Envelope Company in Massachusetts, this deal solidified Moore’s ability to provide its other operations with envelopes in its increasingly vertically integrated operation; prescient moves in advance of the very tight market for envelopes that developed in 2022.

Moore has completed other acquisitions along the way in its journey from direct mail company in Oklahoma to fundraising and marketing powerhouse circling the nation’s capital. Those deals include data analytics, TV production and other supportive service companies. Through a combination of opportunistic acquisitions, adroit resurrections of failed operations, and a clear-eyed strategic focus on its core market, Moore has created a comprehensive position in the nonprofit segment of the direct mail industry. The company now claims a total of 38 locations nationwide that produced and mailed 1.9 billion pieces of mail last year, sent out 4 billion emails, and attained 20 billion TV views of its campaigns. No longer content to be called a direct mail company, Moore now calls itself “a leading constituent experience management company” – the latest term of art in the nonprofit fundraising business. Since that tagline phrase does not exactly roll off one’s tongue, Moore is now otherwise known as a CXM company.

With its concentration of direct mail firepower concentrated on the D.C. region, anchored by its original core Midwest Oklahoma-based operations, might we expect that at some point the longer postal delivery standards will require Moore to shift its acquisition focus westward?

Bi-Coastal Direct Mail

Other mail-centric printing companies have felt the pressure and pull to expand their footprint, specifically aimed at bridging the major postal service regions. Since the post office cannot deliver faster, the industry is responding, using M&A strategies to meet their customers’ need for speed. *

Earlier this year, in April, St. Cloud, Minnesota-based Nahan acquired the mail division assets of the short-lived roll-up Intellus in Montgomeryville, Pennsylvania. Nahan was clear in its reasoning for the acquisition, stating “The purchase allows Nahan to strategically expand its geographic footprint and complement its existing Minnesota facility with enhanced printing, mailing, distribution, and logistics capabilities that enable faster speed to market.” Nahan, while not as large as Moore, has also expanded its portfolio of services to include strategy, creative, data, analytics, print production, mailing, logistics and fulfillment services.

Direct Marketing Solutions (DMS), a portfolio company of Main Street Capital, acquired Mailing Services of Pittsburgh (MSP) back in January of 2022. We suspect that the CEO of DMS had the degraded postal standards clearly in mind when he announced the deal with the statement "This is a transformative time for our team but more importantly for our clients, who will benefit firsthand from the dynamic coast-to-coast reach that will enable us to deliver agile marketing campaigns to prospects days faster." In what now sounds like an echo chamber in the direct mail industry, DMS “leverages world-class strategic, data/analytics and creative insights to execute high-performing integrated direct mail and digital direct solutions.”

One year ago this week, Postal Center International (PCI), based in southern Florida, announced it was opening a new direct mail production facility in San Antonio, Texas. No stranger to acquisitions, PCI eschewed the M&A path in this instance and instead leased an empty 100,000 square-foot facility which it will outfit with equipment, systems and staff to mirror its Florida operation. The company explicitly announced that the San Antonio site was just the beginning of an expansion of regional office, production, and presort sites in regions around the country. PCI made good on this promise in September with another lease and build-out of a production facility in Franklin, Massachusetts aimed at serving the northeast region.

Effectively, the US Postal Service has changed its standards to meet the reality of its failure to meet past standards. The result of this, along with increasing costs, will be that time-sensitive communications will continue to migrate to electronic media. However, direct mail providers believe that, at least for the foreseeable future, their marketing customers with less time-critical communications, such as credit card solicitations, mortgage offers, insurance pitches, as well as non-profit fundraising campaigns, will continue to pour huge volumes into the US mail system. Direct mail providers with the scale and wherewithal to do so are mitigating the increased time in the mail stream by producing mail in different zones, offering their customers improved time to response.

* Graphic Arts Advisors, publisher of The Target Report, currently represents buyers seeking direct mail and transactional printing companies in the western US, in response to the market dynamics discussed herein.

2022 October - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

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

Party #1 Address

Deal Party #2		Pre-Deal
Revenue
(US$Mil)

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

Notes		Link
AWT Labels & Packaging
(Port co. Morgan Stanley Capital)		No DataMinneapolis, MN Label InnovationNo DataOttawa, ON10/31/22No DataAcquisitionLabel printingLink
Minuteman Press, Kettering
(New franchisee)		No DataKettering, OHSchuerholz PrintingNo DataKettering, OH10/25/22No DataAcquisitionPrinting & copyingLink
ValsoftNo DataMontreal, QCMWM GroupNo DataStockholm, Sweden10/24/22No DataAcquisitionPrint & media MIS softwareLink
DocketManagerNo DataLondon, ONPrintPointNo DataPalisades, NY10/21/22No DataAcquisitionPrint MIS softwareLink
PPC Flexible Packaging
(Port co GTCR)		No DataBuffalo Grove, ILPlastic Packaging TechnologiesNo DataKansas City, KS10/21/22No DataAcquisitionFlexible packaging & filmsLink
MooreNo DataTulsa, OKCommunications Corp of AmericaNo DataElkwood, VA10/18/22No DataAcquisitionDirect mailLink
Outform
(Port co. Gemspring Capital)		No DataMiami, FLAlrecNo DataMijdrecht,
The Netherlands		10/18/22No DataAcquisitionRetail displaysLink
Resource Label Group
(Port co. Ares Management)		No DataFranklin, TNMedLit Solutions
(Port co. Core Industrial Partners)		No DataWindsor, NJ10/18/22No DataAcquisition
(Mesirow)		Pharma inserts & packagingLink
Craftsmen IndustriesNo DataSt. Charles, MOZane WilliamsNo DataSt. Louis, MO10/17/22No DataAcquisitionWide format printingLink
RPG Squarefoot SolutionsNo DataLaurel, MDDigital Color InkNo DataJessup, MD10/14/22No DataAcquisition
(Zygoquest)		Wide format suppliesLink
Pitney Bowes$3,610Stamford, CTPresort business
(Div. Skymail International)		No DataSalt Lake City, UT10/13/22No DataAcquisitionPresortingLink
The Griff NetworkNo DataFallsington, PAAtlas MetallizingNo DataNew Britain, CT10/13/22No DataAcquisitionMetallized packaging filmsLink
Multi-Color Corporation
(Port co. Platinum Equity)		No DataCincinnati, OHFlexcoat Label No DataLouveira, Brazil10/13/22No DataAcquisitionLabel printingLink
Atlas Holdings$6,000Greenwich, CTCrown Paper Group
(Port co Lindsay Goldberg)		No DataAtlanta, GA10/11/22No DataAcquisitionContainerboard paper millLink
LabelinkNo DataAnjou, QCPro LabelNo DataAppleton, WI10/11/22No DataAcquisition
(TKO Miller)		Label printingLink
Dunes Point CapitalNo DataRye, NYK-1 Packaging GroupNo DataCity of Industry, CA10/11/22No DataAcquisitionDiversified packagingLink
Resource Label Group
(Port co. Ares Management)		No DataFranklin, TNDeco Labels & Flexible PackagingNo DataWood Dale, IL10/5/22No DataAcquisitionLabels & flexible packagingLink
Crisp ImagingNo DataCosta Mesa, CACoastal BlueNo DataSan Juan Capistrano,
CA		10/5/22No DataAcquisitionReprographics & wide formatLink
Hemlock PrintersNo DataBurnaby, BCPaper Chase PressNo DataLos Angeles, CA10/4/22No DataAcquisitionCommercial printingLink
Southern Champion TrayNo DataChattanooga, TNEvergreen PackagingNo DataLa Mirada, CA10/3/22No DataAcquisitionFolding cartonsLink

  
2022 October - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



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


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


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

   
2022 October - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



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


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Dunn Paper - Port Huron Mill11/18/22No DataPort Huron, MIDunn Paper
(Port co. Arbor Investments)		Alpharetta, GA10/22/22Closing specialty papermaking millLink
Catalyst Paper - Crofton Paper MillDec-22No DataCrofton, BCPaper ExcellenceRichmond, BC10/13/22Closing printing papermaking operationsLink
WestRock - Corrugated Operations10/6/22No DataSt. Paul, MNWestRockAtlanta, GA10/6/22Closing down corrugated medium mfg.Link
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Specialty Products Take Center Stage – November 2022 M&A Activity

December 6, 2022, 4:34 pm
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The trend toward specialization in the broadly-defined graphic communication industries is clearly evidenced by recent M&A transactions. Fewer companies are trading hands that would be considered general commercial printing companies, with a commensurate increase in deals that involve a specialized print-centric activity or product. As we noted in the latest Target Report Annual Review, the number of announced transactions in the commercial printing segment is at a four-year low. The reduction in the number of tuck-in transactions, in which one company closes up and folds its sales into another, is dramatic, now less than one-third of the total deals in the commercial printing segment (for more, see The Target Report Annual Review - 2022 M&A Activity).

Nonetheless, even with a quieter commercial printing segment, overall deal activity in the printing, packaging and related industries remains robust. A peek into several recent transactions, all announced in November, each in different graphic segments, helps to illustrate how specialization is driving buyers to complete M&A transactions.

Envelopes

SupremeX, the Canadian publicly-traded envelope and folding carton manufacturing company, acquired Royal Envelope Corporation, based in the Chicagoland area. According to the Supremex press release, the acquired company “focuses on higher-end, specialized, highly decorated envelopes, with expertise in special format, coloured envelopes.” In other words, a niche within the niche of envelope manufacturing.

SupremeX has a long history in the envelope business. Initially a roll-up focused on envelope production, SupremeX was acquired in 1995 by Mail-Well, the voracious US-based consolidator. With its roots also in envelope production, Mail-Well went on a printing industry acquisition binge, seemingly strategically unfocused, other than to see how many deals the company could complete in how short a time. The unsurprising result was too much debt, retrenchment, and in an effort to reinvent itself, Mail-Well was rebranded as Cenveo. As the company began its long unwinding process, the Supremex division was an early beneficiary and was spun out in 2006.

Eventually Cenveo went through a restructuring via a bankruptcy filing. Earlier this year, Cenveo management completed a buyout, imploding the company back to its core as an envelope manufacturing company (for more, see Cenveo Returns to its Roots – July 2022). It was a well-timed resurrection for Cenveo, as demand for envelopes has exceeded supply over the past couple of years.

In the meantime, as its former parent went through its ups and downs, the now independent SupremeX focused on the envelope business and completed a series of accretive acquisitions.* This most recent acquisition, Royal Envelope, generated revenues of $38.2 million in the year ended June 30th. Royal was purchased for total cash consideration of $18.7 million on a cash-free, debt-free basis, plus a $2 million kicker for recently acquired equipment. With this latest acquisition, Supremex further differentiates itself with increased capacity in the production of specialized highly decorated envelopes.

Bag-In-Box

Sealed Air Corporation, best known for its invention and marketing of the ubiquitous bubble wrap packing material, announced the acquisition of Liquibox. Both companies, buyer and seller, trace their roots back to the early 1960’s, a time of explosive growth in the use of plastics to improve everyday products.

Two civil engineers were working out their idea for dimensional wallpaper. They laminated two layers of plastic together, with air trapped in between, creating little bumps. As it turned out, the world did not need bumpy plastic-covered walls. However, the inventors realized that they had probably created something useful. Next, they marketed their invention as greenhouse insulation. Turns out that this was a good idea, but only of interest to a very limited addressable market. Determined to make something of this lightweight cushy stuff, they hit on the idea that their invention made excellent packing material and Bubble Wrap was born. Fortunately, for all of us who receive well-packed items (and also those who enjoy popping those little bubbles), the entrepreneurial spirit prevailed. The Sealed Air company was founded and eventually grew to become a global supplier of specialty packaging products.

Liquibox, the acquired company, is a manufacturer of highly specialized boxes with a plastic bladder liner on the inside, usually affixed with some type of plastic valve designed for easy dispensing of the contents. On the outside, a printed corrugated carton provides for strength and printed branding. Generically known as bag-in-box packaging, the design combines light weight with functionality and is now used to package everything from water to wine. The original bag-in-box design was invented in 1955 by an American chemist seeking a safe and effective method to ship and dispense battery acid. It did not take too long for the value of the basic design to be recognized and subsequently adopted to store, ship and dispense milk, wine, water, and other beverages.

Founded in 1961, Liquibox is based in Richmond, Virginia, and employs 1,300 people in 18 locations across the globe. Revenues for 2022 are estimated to be $362 million, with EBITDA of $85 million. Sealed Air paid $1.15 billion for the company, 13.5 times EBITDA, proving that specialization, superior strategic fit, uniqueness of the opportunity, and stellar EBITDA performance (23.5%), combined with a meaningful revenue stream that moves the needle for the buyer, results in multiple expansion for the seller.

Partitions

Sonoco acquired WestRock’s 65% interest in RTS packaging. Formerly a joint venture between Sonoco and WestRock, RTS Packaging will now be wholly owned by Sonoco. The acquired company’s primary product is preassembled collapsed partitions used to keep glass bottles and other products separated within a corrugated outside carton. Other products produced include 6-pack carriers, with partitions intact, shipped collapsed and flat to bottlers, as well as slip sheets manufactured to spec for stacking products. It’s all about partitions.

The buyer, Sonoco, is probably best known for its paper tubes, paper cans, and paper cores, including the Sonotube concrete forms used in construction. Established in 1899 as the Southern Novelty Company, the company began by producing the first paper-based cone-shaped carriers for yarn. The invention took off, replacing the wooden textile cones of the day. By 1923, paper cones were no longer a novelty, so the company changed its name to the much simpler Sonoco. Now a highly diversified producer of packaging, both paper-based and plastic, the company has over 22,000 employees, with 300 operations in 32 countries.

Revenues of RTS Packaging, the acquired company, are expected to reach $270 million in 2022, with EBITDA of $50 million. With a purchase price of $330 million, this equates to 6.6 times adjusted EBITDA. Sonoco has a history of acquiring companies that are tightly focused on manufacturing specialty products and RTS Packaging, supplier of fiber-based partitions, fit the bill.

Education Marketing Products

Ennis, a diversified producer of printing products sold via the wholesale/trade only model to print distributors, acquired School Photo Marketing in Morganville, New Jersey. In addition to the staple product sold to schools, yearbooks, the acquired company provides a plethora of products to schools, sports photographers, and photo labs, including pocket folders, calendars, and personalized student ID cards.

Ennis serves its end user customers via the print distributorship channel. This dedication to the trade sales channel arose naturally from Ennis’ origins as a printer of business forms, which traditionally relied on print brokers to reach the great number of potential customers using forms. School Photo Marketing fits the bill for Ennis, a well-defined market served by known repeat-order products sold via third-party independent reps. Specialized, to be sure.

Scent Marketing

If you have been a reader of The Target Report over the past couple of years, you know that the market for label printing companies has been hot, on fire you might say. Recently, it seems to have cooled off, at least a bit. We may be reaching the point where many of the most desirable candidates have been acquired, and we will see more roll-ups of the roll-ups (see Packaging Industry Consolidation in Every Direction – July 2021). We also have begun to see the acquisition of more specialized subsets within the more generalized label printing segment.

Resource Label, one of the more aggressive consolidators in the label printing business, acquired Scentisphere. Based in New York State, the acquired company produces scented varnishes and coatings marketed to printers and brand managers. In turn, the scented coatings are used to manufacture a wide range of products including labels, free-standing inserts, magazine inserts, point-of-purchase displays, and promotional products.

The acquisition of Scentisphere, which is not your typical prime label printing company, is a bit of a left-hand turn for Resource Label. Now backed by its third private equity owner, Ares Management, Resource Label has completed twenty-six acquisitions, almost all of them label printers, not suppliers to the printing trade (see Private Equity Fuel$ Consolidation of Label Industry – September 2021).

This latest acquisition comes right on the heels of Resource Label’s announcement last month of another acquisition that breaks the mold, that of MedLit Solutions, which is hardly a label printing company, rather the acquired company is focused on pharmaceutical packaging, inserts, outserts, marketing collateral, kitting, fulfillment, and mailing.

It appears that both acquisitions provide value from specialization, either via a highly developed niche application (scents) or from focus on a specific industry vertical (MedLit).

Value Via Specialization

Other notable November deals in which the depth of specialization played a significant role included the acquisition of Jondo (photo products and canvas wall décor) by Circle Graphics with backing by H.I.G. Capital; the purchase of Foiltech (decorating foils) by Infinity Foils, a division of UEI Group; and Banyan Software’s deal to acquire Innovatum (highly specialized label technology for regulated products).

There will certainly be more transactions forthcoming in the general commercial printing segment, as well as interest in companies that have successfully executed on the concept of one-stop shopping for marketing production services. However, in the present inflationary market with fears of looming recession, specialization appears to be the driving force supporting current M&A strategies.

* SupremeX, in addition to its envelope business, has developed a secondary specialty in the packaging segment, primarily the production of folding cartons, including the acquisition of Indianapolis-based Vista Graphic Communications. Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to Vista Graphic Communications in the transaction.)
   
2022 November - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

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

Party #1 Address

Deal Party #2		Pre-Deal
Revenue
(US$Mil)

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

Notes		Link
Ennis$421.5Midlothian, TX School Photo MarketingNo DataMorganville, NJ11/30/22No DataAcquisitionYearbook & specialty productsLink
Circle Graphics
(Port co. H.I.G. Capital)		No DataLongmont, COJondoNo DataYorba Linda, CA11/30/22No DataAcquisitionCanvas & photo productsLink
VelocityNo DataScotia, NYThe Bajan GroupNo DataSchenectady, NY11/29/22No DataAcquisitionPrint managementLink
Sihl GroupNo DataFiskeville, RIVisual Imaging ProductsNo DataOntario, CA11/29/22No DataAcquisitionGraphic supplies distributorLink
UsherwoodNo DataSyracuse, NYReprographics of New EnglandNo DataWinooski, VT11/28/22No DataAcquisitionReprographicsLink
Wynnchurch Capital
(BiOrigin Specialty Products)		No DataRosemont, ILDunn Paper
(Port co. Arbor Investments)		No DataAlpharetta, GA11/16/22No DataAsset AcquisitionSpecialty paper productsLink
Banyan SoftwareNo DataAtlanta, GAInnovatumNo DataSugar Hill, GA11/15/22No DataAcquisitionLabeling softwareLink
I.D. Images
(Port co. Sole Source Capital)		No DataBrunswick, OHHickman LabelNo DataLebanon, TN11/11/22No DataAcquisitionLabel printingLink
Resource Label Group
(Port co. Ares Management)		No DataFranklin, TNScentisphereNo DataCarmel Hamlet, NY11/10/22No DataAcquisition
(Mesirow)		Scent technologies for printLink
Crisp ImagingNo DataCosta Mesa, CACentury Graphics
(Div. CSDS)		No DataSacramento, CA11/10/22No DataAcquisitionReprographics & wide formatLink
Sonoco$7,010Hartsville, SCRTS Packaging
(JV w/ WestRock)		$270.0Merced, CA11/9/22$330.0AcquisitionFiber-based partitionsLink
Kelly Spicers
(Div. Central National Gottesman)		No DataPurchase, NYConnemara Converting
(Western Operations)		No DataOntario, CA11/8/22No DataAcquisitionPaper convertingLink
Infinity Foils
(Div. UEI Group)		No DataLenexa, KSFoiltechNo DataScarborough, ON11/4/22No DataAcquisitionGraphic finishing suppliesLink
Printing Industries AllianceNo DataAmherst, NYGraphic Arts AssociationNo DataTrevose, PA11/3/22No DataMergerTrade associationsLink
Sealed Air Corporation$5,770Charlotte, NCLiquibox$362.0Richmond, VA11/1/22$1,150AcquisitionSpecialty corrugated cartonsLink
W InvestmentsNo DataSaint-Lambert, QCCanva GroupNo DataLaval, QC11/1/22No DataAcquisitionIndustrial & diverse printingLink
SupremeX$187.9Lasalle, QCRoyal Envelope$38.8Chicago, IL11/1/22$20.7AcquisitionEnvelope manufacturingLink

   
2022 November - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



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


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
Our City Media of Florida, LLC11/17/22No Data22-18896Sunrise, FL11thSouthern FL
Fort Lauderdale		Scott M. GrossmanRobert C. FurrMagazine publishing & local news
Chapter 7 Filings:
No Chapter 7 Filings Found this Month---------------------------

   
2022 November - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



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


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Gibbs Brower International CorporationDec-22No DataBristol, CTNoneN/ANov-22Converting equipment resellersLink
Emprint - Printing facility12/1/22No DataBaton Rouge, LAEmprintBaton Rouge, LANov-22Consolidating facilitiesLink
↧

Private Equity Feeds Industry Growth – December 2022 M&A Activity

January 7, 2023, 8:24 pm
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Not a month goes by in which private equity does not have a significant impact on the printing, packaging, and graphic communication businesses. The smart money keeps on coming, as fund after fund establishes a position in the industry with a new platform investment, and soon thereafter embarks on an aggressive roll-up campaign. Initially limited to primarily packaging companies, some private equity firms have eschewed the high multiples that top performing packaging companies command, investing instead in the commercial printing industry or other specialty segments such as wide-format products, or book printing. Funds are backing direct mail printing companies and then layering on data analytics, programmatic digital advertising, email campaigns, and other integrated marketing services. 

In addition to growing their platform companies via bolt-on acquisitions, most PE firms will also seek to juice up internal performance and organic growth. Many funds will professionalize the new platform company with an upgrade to the accounting system and improved reporting standards. Critical to growth, funds will judiciously water the company with new capital equipment investments that are needed. Private equity will bring a disciplined and structured approach to the management of the operations. 

Some private equity firms have a long-term vision, a build-and-hold strategy; however that is the exception. Most have obtained their funding from limited partners to whom they have committed a return of the initial investment plus a superior return, all within a predetermined time frame. With the clock ticking on when the return of capital is required, the funds eventually must find a buyer and exit their investment. Hence, we see secondary, and even tertiary, buyouts, in which one fund sells its platform company to another private equity fund. The process begins anew, and the roll-up continues. 

PE Fed and Watered Packaging Roll-Ups in 2022

Fortis Solutions Group is an excellent example of a packaging company that has executed a strategic growth plan with private equity backing. One of the most active private equity-backed roll-ups in the label printing segment, and now with its secondary sponsor, Fortis recently acquired West Coast Labels, located in Placentia, California. This was the sixth acquisition in 2022 by Fortis of a label printing company, building on their “One Fortis” strategy. Investment banker John Wynne started Fortis in 2010 with the purchase of Labels Unlimited, a one-location company in Virginia Beach focused solely on pressure sensitive label production. That was when the country was recovering from the Great Recession. Fortis now has twenty-two manufacturing sites across the US and employs over 1,300 people.

After an initial growth spurt that included the acquisition of several geographically diverse label printing companies, Fortis partnered with San Francisco-based Main Post Capital Partners in 2017. Main Post Capital Partners supercharged the next phase and Fortis acquired no less than eight additional companies in just under four years. One of those acquisitions, the purchase of Infinity Packaging, was itself a secondary buyout of a small label roll-up put together by Svoboda Capital. In October 2021, Main Post Capital Partners announced that it had exited Fortis, selling its interest in a secondary buyout to Harvest Partners, a private equity fund based in New York. Harvest hit the road running and provided support for the six companies added to the Fortis platform in 2022. 

Wynne’s entry into the packaging business is not the typical story of a bootstrap startup or next generation succession into the family business. He did not have any prior printing or packaging experience but was attracted to the custom manufacturing nature of the business, as well as the ability for a small company in the label industry to focus on serving national brands. Wynne’s entry into the packaging industry as an outsider represents an example of a trend that we currently see reemerging in the post-pandemic period; professional executives from outside the industry seeking to acquire a modest size manufacturing company they can own and build upon. (Notably, other segments of the printing industry, including commercial printing, are not excluded from this renewed interest from outsiders.)

Fortis is not the only packaging platform company that has been supercharged by private equity. As we have noted in several Target Reports over the past several years, private equity interest in the package printing business has lifted multiples and provided a very healthy exit for many owners of label printing, flexible packaging, and related companies. In 2022, we identified forty-four transactions in packaging in which the buyer was backed by private equity. Several of the buyers, like Fortis, were serial acquirers and completed several deals during the year. All told, we noted nineteen distinct private equity firms that supported their existing packaging platform companies with new acquisitions in the past twelve months. In addition, six new packaging platforms were acquired by private equity in 2022, setting the stage for M&A activity to remain robust in the packaging segments. 


Commercial Printing Receives PE Love in 2022

While not attracting anywhere near the level of attention as the packaging companies, the other print-related segments are now in the sights of some private equity firms. Investments in printing companies have been across a wide spectrum of specialties, including direct mail, consumer products, wide-format, and in a notable return to grace within the investment community, private equity investments now include general commercial printing companies.

The best example of this interest from private equity may be the investment by Snow Peak Capital, a fund based in Boulder, Colorado, which acquired a majority interest in Sandy Alexander, the venerable commercial printing company headquartered in Clifton, New Jersey. Working with existing management, Snow Peak indicated that its financial support would be utilized to improve company operations and margins, and explicitly would include growth by acquisition. No bolt-on acquisitions have been publicly announced yet in the eight months since the initial investment in the Sandy platform, but with new equity funding in place, we expect deals will be forthcoming.

Sandy has been down the private equity road before. Well before private equity was a major asset class and generally known as a force in the economy, Sandy had institutional investors. That relationship with an investment firm stood out at the time because most printing companies were either privately owned, or publicly traded.

Founded in 1963 as Alexander & Son, the company grew by acquisition and in 1969 merged with Sandy Printing to form the Sandy Alexander brand that still exists to this day. In 1972 Sandy Alexander was acquired by the Mickelberry Food Corporation, a public company that traced its roots back to 1926 and was originally in the processed meats business. As Mad Men fever gripped the business community in New York, Mickelberry joined in and acquired several well-known advertising agencies, some of which served clients in the grocery business. The advertising business led Mickelberry to acquire assets in the printing business, including Sandy Alexander, Carnival Press, and other printing interests.

In 1975, Sandy Alexander and Carnival Press were merged, and more acquisitions followed. By 1980 Mickelberry had become primarily an advertising and printing company; the revenues from these services then collectively represented three quarters of total company revenues. This was a prestigious time for Mickelberry. Listed on the New York Stock Exchange, no less a personage than Franklin D. Roosevelt Jr., son of the former president, chaired the company’s executive committee at the time of his death in 1988.

Under the auspices of the rebranded Mickelberry Corporation, Sandy acquired the sales of Americom In 1991, bringing current CEO Mike Graff into the organization. Rebranded once again, Mickelberry Communications was taken private in 1995 by Union Capital, a private equity fund founded by high-society attorney and businessman James Marlas. Married from 1984 to 1987 to actress Glenn Close, Marlas served on the boards of the New York City Opera, a college charitable foundation, and the French wine lovers association Commanderie de Bordeaux. Heady times in the printing industry, to be sure.

In July 2013, the Sandy Alexander management team bought out the PE backers and, until this past year, the company was exclusively owned by that management team. With the sale this past year to Snow Peak Capital, Sandy Alexander reenters the private equity world, possibly more staid than the first go round, but ready to begin the next phase of a long and storied history. Acquisitions are sure to follow.

Sandy Alexander is not the only commercial printing company that appears ready to be supercharged by private equity. In 2022, Post Capital Partners acquired Ironmark, a diversified commercial printing company in Maryland. Soon after it was established as a platform company, Ironmark completed its first bolt-on, the acquisition of Millennium Marketing Solutions.* More will surely follow.

Arizona-based commercial printing company Prisma Graphic received backing from CenterGate Capital in 2022. Prisma had already begun its expansion program, prior to the entry of private equity, with the acquisition of two companies in 2021 in Nashville, Tennessee. The CEO of Prisma noted that CenterGate’s investment provides the company with the capital to further expand the Prisma platform. More acquisitions will follow.

In total, in the 2022 Target Reports, we identified six transactions in the commercial printing segment in which the buyer was backed by private equity. Two buyers, JAL Equity and Revitalize Capital, are serial acquirers and completed bolt-on deals during the year. Despite the renewed interest in commercial printing by the professional investment community, we do not expect a return to the go-go deal activity that commercial printing experienced in the 1990’s. However, with the establishment of three new significant PE-backed platform companies, accompanied by the continued appetite for new deals from the existing PE-backed companies, the exit potential for commercial printing company owners is brighter than it has been for years.

* Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to Millennium Marketing Solutions in this transaction.
   
2022 December - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

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

Party #1 Address

Deal Party #2		Pre-Deal
Revenue
(US$Mil)

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

Notes		Link
GSGNo DataDallas, TXMontroy Denver
(Div. Montroy Sign & Graphic Products)		No DataSignal Hill, CA12/29/22No DataAcquisitionGraphic supplies distributorLink
Fortis Solutions Group
(Port co. Harvest Partners)		No DataVirginia Beach, VAWest Coast LabelsNo DataPlacentia, CA12/15/22No DataAcquisitionLabel printingLink
Color InkNo DataSussex, WIHM GraphicsNo DataMilwaukee, WI12/12/22No DataAcquisitionCommercial printingLink
Multi-Color Corporation
(Port co. Clayton, Dubilier & Rice)		No DataCincinnati, OHLux Global LabelNo DataLafayette Hill, PA12/12/22No DataAcquisitionLabel printingLink
QDPP&E/AAA Press InternationalNo DataEgg Harbor, NJTable Top Rewinder Division
(Div. Lederle)		No DataPacific, MO12/8/22No DataAsset AcquisitionFlexo finishing equipmentLink
Phoenix InnovateNo DataTroy, MIUN Communications GroupNo DataCarmel, IN12/7/22No DataAcquisitionCommercial printingLink
UFP Packaging
(Div. UFP Industries)		$9,730Grand Rapids, MITitan Corrugated$46.5Flower Mound, TX12/6/22No DataAcquisitionCorrugated boxesLink
ImageMark Mngt TeamNo DataGastonia, NCImageMark Business ServicesNo DataGastonia, NC12/6/22No DataMngt. BuyoutCommercial printingLink
Burlington Multimedia
(Affil. Community Media Group)		No DataWest Frankfort, ILThe Burlington Hawk Eye
(Prop. Gannett)		No DataBurlington, IA12/6/22No DataAcquisition
(Dirks, Van Essen)		Community newspapersLink
Lachemont GroupNo DataSouth Plainfield, NJCoastal PackagingNo DataHouston, TX12/5/22No DataAcquisition
(Benchmark)		Bags & packaging filmsLink
Engine Vision MediaNo DataLos Angeles, CALos Angeles Magazine
(3 titles) (Prop. Hour Media)		No DataIrvine, CA12/5/22No DataAcquisition
(Diamond Capital)		Magazine publishingLink
BR PrintersNo DataSan Jose, CARoss4MarketingNo DataDenver, CO12/5/22No DataAcquisitionCommercial printingLink
I.D. Images
(Port co. Sole Source Capital)		No DataBrunswick, OHPrecision LabelNo DataCalgary, AB12/5/22No DataAcquisitionLabel printingLink
I.D. Images
(Port co. Sole Source Capital)		No DataBrunswick, OHSummit LabelsNo DataPort Coquitlam, BC12/5/22No DataAcquisitionLabel printingLink
WhatTheyThinkNo DataSt. Paul, MNInkjet InsightNo DataSt. Paul, MN12/1/22No DataAcquisitionIndustry publicationLink

   
2022 December - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



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


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
DCL Corporation (USA) LLC
(Port co H.I.G. Capital)		12/20/22No Data22-11323Toronto, ON3rdDelaware
Wilmington		J. Kate SticklesAmanda R. SteelePigment manufacturing
Chapter 7 Filings:
Printing House LLC12/9/22No Data22-13311Philadelphia, PA 3rdEastern PA
Philadelphia		Magdeline D. ColemanMichael A. CibikPrinting & copying

 
2022 December - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



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


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
No Plant Closures Found this Month------------------------
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↧

The Box is Back – January 2023 M&A Activity

February 7, 2023, 6:59 pm
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The simple box. We predicted it would happen. The market for box manufacturing has heated up and in the most recent month the purchase of box printing companies has outpaced the number of deals involving label printing companies for the first time in our eleven‑plus years of tracking and commenting on M&A activity in the printing, packaging and related industries. (See Label Roll-Ups are Red Hot; Are Folding Cartons Next? – March 2022).

The Rigid Box


The original fiber-based box, the rigid box, is also known as a set-up box. As the name suggests, in its simplest form, these boxes are formed by wrapping, tucking, and gluing paper around stiff cardboard to form a rigid container that is shipped set up and ready to pack. While it is difficult to pin down the exact origin of the rigid box, several sources point to a German company that in 1817 produced a box to package The Game of Besieging, an early war strategy board game. 

An alternate history credits the creation of the first commercial paperboard box to an English firm, M. Treverton & Son, curiously asserting that production began in the same year as the German claim, 1817. The rigid box prevailed as the dominant fiber-based box for almost a century. With the advent of more efficient methods of box production around 1900, the rigid box lost its place as the preferred volume utilitarian solution. The rigid box method is now most often used to package luxury and specialty items, highly decorated with foils, coated with gloss and soft-touch finishes, and formed into unique shapes.

The Corrugated Box

In 1856, tall top hats were the fashion rage for men. Two gentlemen in the hatter trade, Edward G. Healy and Edward E. Allen, resolved to find a material that would maintain the tall shape, yet was flexible to fit individual noggins. The solution they arrived at was to form paper into pleats, giving it a wavy shape for strength. They patented the invention in England, but never made the leap to using their invention to create a shipping box. American ingenuity was behind the next step forward in the form of a US patent filed in 1871 by Albert L. Lyons for “an improvement in paper for packing” which described the use of corrugated, crimped, or bossed forming of paper to create an effective cushion for the contents being packed. Three years later, a machine was made for producing large quantities of corrugated material and that same year another inventor, Oliver Long, added the liner sheet to the second side, trapping the corrugation in the middle, producing the corrugated material we know today. In 1895, the first corrugated box was manufactured in the US, quickly replacing the previously dominant wooden crates and boxes used to ship products.

The Folding Carton

In 1879, Scottish-born immigrant to America Robert Gair was working in his Brooklyn printing company on an order of small seed bags. As the story goes, the diemaker working for Gair did not set a creasing rule correctly, leaving the blade too high. The miscreant die cut through thousands of the seed packets before the error was noticed, and the lot was wasted. In this way, Gair discovered that he could cut and crease paper in one operation. While this seems obvious to us today, at the time the scoring was done on a press and the cutting was accomplished in a separate operation performed on a guillotine cutter. The entrepreneurial lightbulb was lit, and Gair applied his discovery to heavier paperboard. The result was an exponential increase in productivity. The new product was not only faster to produce, but critically could be glued and packed flat for shipping. Final erection and assembly of the box was completed at the factory where the product to be packaged was made and inserted into the box. Early converts to the new mass-produced foldable cartons included the Great Atlantic & Pacific Tea Company, Colgate, Ponds, and tobacco manufacturer P. Lorillard. In 1896, Gair landed an order for two million of his precut, pre-creased cardboard boxes for Uneeda Biscuits from Nabisco, known at the time as the National Biscuit Company. The folding carton rapidly replaced the traditional tin or wooden cracker boxes. Eventually further popularized by Kellogg’s for the sale of cereals to the masses, the folding carton had arrived. Gair went on to great success, eventually building seven large factories in the Dumbo section of Brooklyn, where his name survives even today on several converted factory facades.

Boxes of All Kinds

Italian packaging printing company Pusterla 1880 produces high-end packaging for luxury brands in the fragrance, cosmetics, wine & spirits, and gourmet food markets. With established factories in Italy, the UK, Moldova, and Tunisia, the company has entered the US market with the simultaneous purchase of two premium manufacturers of rigid box packaging. Pusterla announced the acquisition of Taylor Box Company in Warren, Rhode Island, and Burt Rigid Box in Oneonta, New York.

SupremeX, the publicly traded Canadian company with its roots in the envelope manufacturing business, has further extended its reach into the box business with the acquisition of Impression Paragraph, a folding carton printing and manufacturing company with two facilities in Quebec. In addition to the folding carton business, the acquired company also produces retail point-of-sale displays for the cosmetic, pharmaceutical, and food confectionary markets. The acquisition marks Supremex’s fifth move into the folding carton business, following the 2021 acquisition of Vista Graphic Communications in Indianapolis, Indiana,* both acquisitions examples of the company’s laser-focused execution of its strategic diversification plan to acquire packaging companies and supplement its legacy core envelope business. Supremex is not ignoring the envelope business, however, and recently also acquired the business of Royal Envelope with two manufacturing facilities in the greater Chicago area, focusing primarily on higher-end, highly decorated envelopes for the direct mail market.

Oliver Packaging has purchased its first company under the new sponsorship of Tenex Capital, acquiring Tap Packaging + Design. The acquired company produces folding cartons, and in a bit of a departure for Oliver from its core focus on folding cartons, adds rigid boxes and micro flute corrugated packaging to the mix. Tenex Capital purchased Oliver in July 2022 from Pfingsten Partners in what is known in PE circles as a secondary buyout. Purchased by Pfingsten in 2016, Oliver was privately held, owned, and managed in the Cleveland area by four generations of the Oliver family. Oliver Printing, as the company was previously known, had by that time successfully transitioned from its roots as purely a commercial printer to a company with its future focused on folding cartons, including structural design, printing, and finishing. As the first institutional owner of Oliver Printing, Pfingsten proceeded to rebrand the company and bolt on four acquisitions which have transformed Oliver into a national player in the folding carton segment. Those acquisitions included the venerable Disc Graphics on Long Island, New York, where the Oliver Packaging company is now headquartered.

GPA Global announced the acquisition of the Cosfibel Group, headquartered in Paris, France. The acquired company has factories in Spain and Belgium and specializes in serving prestigious high-end brands with rigid box sets, gift packs, secondary packaging and product presentations in the beauty, wine & spirits, gourmet foods, and high fashion markets. Consistent with GPA Global’s strategy of combining in-house manufacturing with outsourced specialty purchasing, Cosfibel touts its “make & trade” approach to fulfilling its customers’ packaging requirements. (See GPA Global Emerges as Packaging Consolidator – December 2021).

S. Walter Packaging Group, a portfolio company of Larsen MacColl Partners since 2014, acquired Pulver Packaging, a manufacturer of folding cartons in Elk Grove, Illinois. Pulver brings design, sourcing, printing, fabrication, enhancement, warehousing, and inventory management to its new parent. The S. Walter Packaging Group includes a specialty division, Bags & Bows, which serves the retail market with bags, stock size boxes, tissue paper, gift wrap, and as the name suggests, ribbons and bows. Another division, LPI, originally named Letterhead Press, provides highly specialized finishing services including stamping of holographic images, foil stamping, embossing, UV coatings, and production of rigid boxes.

Welch Packaging Group, the roll-up that has focused exclusively on corrugated products, is back in acquisition mode after a two-and-a-half-year pause in M&A activity. Welch just announced the purchase of Knoxville Box and Container, in Knoxville, Tennessee. The acquired company’s product line, corrugated cartons, is consistent with every company that Welch has acquired in the 37 years since the owner established the company with only four employees and rudimentary box-making equipment. With this latest acquisition, Welch Packaging now serves the Midwest and South-Central market from over a dozen manufacturing locations and three distribution centers with over 1,200 employees. (See Catching the Wave in Corrugated Cartons – February 2020).

* Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisors to Vista Graphic Communications in this transaction.
   
2023 January - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

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

Party #1 Address

Deal Party #2		Pre-Deal
Revenue
(US$Mil)

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

Notes		Link
Capital Region Independent MediaNo DataClifton Park, NYThe Columbia PaperNo DataGhent, NY1/30/23No DataAcquisitionCommunity newspaperLink
Welch Packaging GroupNo DataElkhart, INKnoxville Box & ContainerNo DataKnoxville, TN1/25/23No DataAcquisitionCorrugated boxesLink
Summit Plastics
(Port. Co LongueVue Capital)		No DataSummit, MSFredman Bag CompanyNo DataMilwaukee, WI1/25/23No DataAcquisitionFlexible packaging & bagsLink
Minuteman Press, Denver
(Existing franchisee)		No DataDenver, COA Great American Print ShopNo DataDenver, CO1/23/23No DataAcquisitionPrinting & copyingLink
Avery Dennison$9,200Glendale, CAThermopatch$40.0 Syracuse, NY1/22/23No DataAcquisitionLabels for textilesLink
MimeoNo DataMemphis, TNMotif Photos
(Div. RR Donnelley)		No DataChicago, IL1/19/23No DataAcquisitionPhoto printingLink
Oliver Printing & Packaging
(Port co. Tenex Capital)		No DataHauppauge, NYTap Packaging + DesignNo DataCleveland, OH1/19/23No DataAcquisitionFolding cartons & rigid boxesLink
SupremeX$195.3Lasalle, QCImpression Paragraph$38.6Saint-Laurent, QC1/16/23$26.6AcquisitionFolding cartons & retail displayLink
Modern Litho$50.6Jefferson City, MOScotts PrintingNo DataRolla, MO1/12/23No DataAcquisitionCommercial printingLink
Minuteman Press, Lebanon
(New franchisee)		No Data Lebanon, OHMinuteman Press, Lebanon$1.3Lebanon, OH1/12/23No DataAcquisitionPrinting & copyingLink
GPA Global
(Port co. Ontario Teacher's Pension Fund)		No DataNew York, NYCosfibel GroupNo DataParis, France1/10/23No DataAcquisitionFolding cartons & rigid boxesLink
Pusterla 1880No DataVenegono Inferiore, 
Italy		Burt Rigid BoxNo DataOneonta, NY1/9/23No DataMergerRigid boxesLink
Pusterla 1880No DataVenegono Inferiore, 
Italy		Taylor BoxNo DataWarren, RI1/9/23No DataAcquisitionRigid boxesLink
CJK Group$631.0Brainerd, MNAllen PressNo DataLawrence, KS1/9/23No DataAcquisitionPublication printingLink
Navitor FolderWorks
(Div. Taylor Corporation)		No DataNorth Mankato, MNEpoly CorporationNo DataNaples, FL1/6/23No DataAcquisitionPresentation foldersLink
Taylor CorporationNo DataNorth Mankato, MNAcrylic Design AssociatesNo DataMinneapolis, MN1/6/23No DataAcquisitionRetail displaysLink
Taylor CorporationNo DataNorth Mankato, MNLegacy3 Print MediaNo DataGarland, TX1/6/23No DataAcquisitionBindery & finishing servicesLink
Polymer PackagingNo DataNorth Canton, OHWilliam-Allen CompanyNo DataNorth Canton, OH1/5/23No DataAcquisitionBags & packaging filmsLink
DocketManagerNo DataLondon, ONPrinters SoftwareNo DataSarasota, FL1/5/23No DataAcquisitionPrint MIS softwareLink
MooreNo DataTulsa, OKMerkle RMG
(Div. Merkle)		No DataHagerstown, MD1/4/23No DataAcquisitionDirect mailLink
Block CommunicationsNo DataToledo, OHPittsburgh City Paper
(Prop. Eagle Media)		No DataButler, PA1/4/23No DataAcquisitionCommunity newspaperLink
Mittera$555.4Des Moines, IAGeographicsNo DataAtlanta, GA1/3/23No DataAcquisitionCommercial printingLink
HiscoNo Data Houston, TXAlliance Graphics and Printing$24.0Houston, TX1/3/23No DataAcquisitionCommercial printingLink
S. Walter Packaging Group
(Port co Larsen MacColl Partners)		No Data Trevose, PA Pulver PackagingNo DataElk Grove, IL1/3/23No DataAcquisitionFolding CartonsLink


2023 January - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



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


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


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

      
2023 January - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



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


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Metroland Media Group - Printing facilityTBDNo DataToronto, ONMetroland Media GroupMississauga, ON1/30/23Outsourcing printing to TC TranscontinentalLink
H&H Imaging1/26/23No DataSan Francisco, CANoneN/A1/16/23Commercial printingLink
LSC Communications - (2) Printing facilities3/31/23No DataLancaster, PALSC CommunicationsWarrenville, IL1/9/23Catalog & publication printingLink
Gannett - Printing facilityApr-23No DataGreece, NYGannettMcLean, VA1/4/23Consolidating print to other plantsLink
↧

Duking it Out in the Label Business – February 2023 M&A Activity

March 7, 2023, 7:33 pm
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Packaging deals have eclipsed transactions in all other segments of the printing and related industries for the past three years. That shows no sign of letting up. The temporary dominance in transactions that involved box printing companies, as we noted in The Target Report last month, has reverted once again to the norm in which label printing companies are the preferred target. (See The Box is Back – January 2023). The consolidation of the label printing industry is being driven by a slew of private equity firms that have demonstrated a willingness to pay double-digit multiples for profitable label manufacturers of any decent size. The attributes of recurring revenue, customer stickiness due to required brand continuity, and relative de minimis component cost of labels within the scheme of total product cost, all make label printing highly attractive to financial buyers.

The Contenders

Resource Label Group is my choice as the poster child for the PE-backed label industry feeding frenzy. With backing from Ares Management, its third private equity firm sponsor, Resource Label acquired Riverside, California-based Majestic Labels, the digital label printing division of Majestic Printing Systems. Majestic is the 27th acquisition for the Resource Label Group, which began as a single location company in Tennessee in 1991. The company grew organically until 2005 when it entered the private equity ecosystem with financial backing from Lineage Capital. With only one acquisition under its belt, Lineage passed the torch to First Atlantic Capital in 2011. With the backing of First Atlantic, Resource went into hyper-growth mode and added 21 more companies over the next decade. Ares Management picked up Resource in 2021 and has continued to nurture the platform. (See Private Equity Fuel$ Consolidation of Label Industry – September 2021).

Another champion label consolidator, Brook + Whittle, is no slouch when it comes to rolling up the label industry. With backing from Genstar Capital, B+W acquired LLT Labels, a specialist in the manufacture of thermal transfer labels. Located in Stow, Ohio, the acquired company represents the 17th production facility for B+W. Based in Guilford, Connecticut, B+W, like Resource Label, is now backed by its third private equity firm. B+W entered the world of private equity in 2009 with an investment from RFE Investments, along with independent sponsor Charter Oak Equity. RFE and Charter Oak added several acquisitions, professionalized the company along the way, and sold B+W in 2017 to TruArc Partners (né Snow Phipps Group). TruArc Partners added several more companies to the platform, exiting in 2021 with the sale to Genstar Capital. Genstar has now added three more companies to the B+W roll-up, including the acquisition of Cenveo’s Custom Labels Group, a critical turn away from labels for Cenveo as it unwound itself. (See Cenveo Returns to its Roots – July 2022).

Fortis Solutions Group also has to be considered as a challenger in the championship ring. The Fortis network now spans the US from its original location and home base in Virginia Beach, Virginia, to Napa, California, Whitefish, Montana, Lewisville, Texas, and with the acquisition of Profecta labels last year in St-Hubert, Quebec, now up to Canada. Fortis is still with its secondary private equity sponsor. After an initial seven-year roll-up without PE-backing, the company teamed up with San Francisco-based Main Post Capital Partners in 2017. Main Post Capital Partners supercharged the next phase and Fortis acquired no less than eight additional companies in just under four years. In October 2021, Main Post Capital Partners announced that it had exited Fortis, selling its interest to Harvest Partners, a private equity fund based in New York. Harvest hit the road running and provided financial and strategic support for the six companies added to the Fortis platform in 2022. We expect it will not be long before another Fortis acquisition hits our deal log. (See Private Equity Feeds Industry Growth – December 2022).

Inovar Packaging, headquartered in Dallas, Texas, was founded in 1964 as a simple printer of one-color plain labels. It took twenty years for the company to transition to full four-color process printing. Six years later, in 2000, the company dipped its toe into the acquisition game in a merger with Label 1 and launched the Inovar brand for the combined entity. It took an investment by private equity to get the deal juices flowing at Inovar, with AES Investors stepping in as the new owners in 2016. We count no less than eight acquisitions under the sponsorship of AES Investors, culminating in the purchase of Dion Label Printing in 2021. As with the other contenders in the label slug fest, the private equity sponsor eventually needs to exit the investment and realize the value they have added via the acquisition and bolt-on conglomeration process. AES was no different and in 2022 Inovar was sold to Kelso & Company private equity firm. Kelso has a unique place in the universe of private equity funds; its founder Louis O. Kelso was also the inventor of the modern ESOP when he hit on the idea of a structuring a leveraged buyout with the use of retirement plan assets. (The first ESOP was closely related to our industry, the employee buyout of a newspaper publisher, but that’s a story for another day.) Under Kelso’s sponsorship, Inovar announced the acquisition of Cimarron Label in Sioux Falls, South Dakota. We will not be surprised if Kelso picks up the pace and Inovar is in the competitive matchup more often.

In the Mix

Other competitors with PE backing, but possibly not quite as aggressive as the three top contenders, are in various stages of their PE life cycle, each vying for position ringside at the label printing industry roll-up.

Established over 40 years ago, AWT was acquired by private equity firm Mason Wells in 2015, completed one acquisition, however during this time, AWT mostly stayed on the sidelines. Morgan Stanley Capital Partners stepped in and acquired AWT from Mason Wells in December 2020, subsequently adding three new bolt-on acquisitions during 2022.

All American Label & Packaging, a portfolio company of Heartwood Partners, acquired Lotus Labels located in Brea, California. Heartwood came into the competition last March when it merged All American with Western Shield Label & Packaging, itself a serial acquirer of label companies.

I.D. Images has been very active in the label printing business over the eleven years that we have been tracking transactions, with a significant increase in deal frequency since picking up financial support from Sole Source Capital in 2021. Starting with simple blank thermal label stock, I.D. Images expanded its capabilities via acquisitions to include a wide range of label products. With a commitment to sell exclusively through distributors, I.D. Images has a clear advantage when a trade label printer is on the market but has stayed out of the fray for the companies that sell direct.

There are others in the competitive mix for label printing companies, such as Premium Label & Packaging, which was formed with financial support from Dunes Point Capital, and which has acquired at least four label businesses. ProAmpac, now a portfolio company of Pritzker Partners, occasionally acquires some label business as a component of an acquisition in its core focus area of flexible packaging and bag manufacturing.

On the Sidelines

Multi-Color Corporation has historically focused on larger deals, including its 2017 acquisition of Constantia Labels based in Vienna, Austria with a reported revenue of $690 million at the time. Since the merger with Fort Dearborn in 2021, Multi-Color has been mostly on the sidelines of the US label industry roll-up. With over 13,000 employees, operating 109 label manufacturing plants in over 26 countries, the company is on a larger scale. It simply takes more to move the needle at this size, such as the company’s December 2022 acquisition of Lux Global Label, which operates plants in Pennsylvania and Puerto Rico. (See Packaging Industry Consolidation in Every Direction – July 2021).

We would be remiss if we did not mention CCL Industries in this summary of the label business consolidators. CCL, the Canadian-based global packaging company, despite its size, has stayed out of the bidding wars that have characterized the prime label roll-up in the US. CCL has instead maintained a disciplined acquisition process seeking out unique niches within the larger label segment, including horticultural tags and labels, apparel labels, clinical trial labels and similar highly specialized corners of the market. While the market heated up, CCL managed to maintain an average purchase multiple of 6.1 times EBITDA over the past three years. (See CCL Industries Breaks the Rules – January 2022).
   
2023 February - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

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

Party #1 Address

Deal Party #2		Pre-Deal
Revenue
(US$Mil)

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

Notes		Link
Welch Packaging GroupNo DataElkhart, INNashville BoxNo DataLebanon, TN2/28/23No DataAcquisitionCorrugated boxesLink
Resource Label Group
(Port co. Ares Management)		No DataFranklin, TNMajestic LabelsNo DataRiverside, CA2/28/23No DataAcquisitionLabel printingLink
Minuteman Press, Puyallup
(Existing franchisee)		No DataPuyallup, WAAdvantage GraphicsNo DataSumner, WA2/27/23No DataAcquisitionPrinting & copyingLink
Data Communications Management$118.7Brampton, ONMoore Canada Corporation
(Sub. RR Donnelley)		No DataChicago, IL2/22/23No DataAcquisitionDiversified print operationsLink
Granite Creek Capital PartnersNo DataChicago, ILCP DirectNo DataLanham, MD2/16/23No DataAcquisitionDirect mail printingLink
All American Label & Packaging
(Port co. Heartwood Partners)		No DataDublin, CALotus LabelsNo DataBrea, CA2/15/23No DataAcquisitionLabel printingLink
Mill Rock Packaging
(Port co. Mill Rock Capital)		No DataNew York, NYKeystone Paper & BoxNo DataSouth Windsor, CT2/13/23No DataAcquisitionFolding cartonsLink
Larsen PackagingNo DataSt. Charles, ILAlpha ContainerNo DataMarysville, OH2/9/23No DataAcquisitionCorrugated boxes & displaysLink
Anderson & VreelandNo DataFairfield, NJFlexographic Consumables
(Div. Grimco)		No DataFenton, MO2/6/23No DataAcquisitionFlexographic suppliesLink
WIP VenturesNo DataFairport, NYNational Enquirer (+2 titles)No DataNew York, NY2/6/23No DataAcquisitionTabloid newspaperLink
Sandy Alexander
(Port Co. Snow Peak Capital)		No DataClifton, NJAbbott Communications GroupNo DataOrlando, FL2/6/23No DataAcquisition
(New Direction)		Commercial printingLink
Brook + Whittle
(Port co. Genstar Capital)		No DataGuilford, CTLLT LabelsNo DataStow, OH2/2/23No DataAcquisitionLabel printingLink
Inovar Packaging Group
(Port co. Kelso & Company)		No DataDallas, TXCimarron LabelNo DataSioux Falls, SD2/1/23No DataAcquisitionLabel printingLink
SOL Capital ManagementNo DataVienna, AustriaPolar Mohr
Adolf Mohr		No DataHofheim, Germany2/1/23No DataAcquisitionPaper finishing equipmentLink
PPC Flexible Packaging
(Port co GTCR)		No DataBuffalo Grove, ILStePacNo DataTefen, Israel2/1/23No DataAcquisitionBag, pouches, lids & filmsLink
Tsuji HoldingsNo DataReno, NVDynaGraphicsNo DataReno, NV2/1/23No DataAcquisition
(Graphic Arts Advisors)		Commercial printingLink

   
2023 February - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenue
(US$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:
Gray County Newspapers, LLC2/7/23No Data23-50017Pampa, TX5thNorthern TX
Lubbock		Robert L. JonesBrad W. OdellNewspaper publishing


2023 February - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



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


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
Quad/Graphics - Printing facilities4/28/23No DataMerced, CAQuad GraphicsSussex, WI 2/20/23Retail inserts & magazine printingLink
Quality Forms3/14/23No DataPiqua, OHNoneN/AFeb-22Direct mail forms printingLink
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Search

Crisp Imaging Adds to West Coast Network; and more…

April 7, 2023, 8:30 pm
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It was the smell that offended. It assaulted your senses. It emanated from the far end of the prep department, in the back, behind the large horizontal camera, by the plate exposure frames. This was not the sweet, almost floral, scent of the isopropyl alcohol evaporating from the fountain solution on the multi-unit offset presses. This was not the pungent, thick, smell of offset inks, nor was this the overwhelming petrochemical odor of the press wash at the end of the day when multiple presses shut down simultaneously.

It was the ammonia that stunk. The smell permeated the prepress (né stripping) department in the early morning when the majority of blueline proofs were made. After exposure and processing, the blueprint paper was washed and laid out to dry, flat, but still never really flat. The strippers glued the bluelines back-to-back to emulate two-sided printing, cut, folded, and stapled the thick, bulky, crinkly blueprint paper to approximate the finished project as closely as possible. The sales reps, myself included, eagerly waited for production to sign off, so we could get on the road to take the blueprint proofs on our daily runs to customers. By the time the proofs were delivered, the smell had mostly lifted and our customers were spared the stench of ammonia-based blueline proofing.

Not long after I began my career in printing, substitute photosensitive papers that did not require obnoxious chemical processing came into widespread use as the proofing paper of choice for offset printers. The nasty ammonia smell was a thing of the past, an early olfactory benefit of the march of technology in our industry.

Reprographers

Traditionally known as blueprinting companies, reprographers are specialized firms that serve the architectural, engineering, and construction management (AEC) industries. Reprographers were called upon to produce copies of architectural and technical drawings. Often times, many sets of multi-sheet copies were needed for all the team members and crews involved in a construction project. As changes were made, new sets were required and rushed to the field. Minimal time elapsed and speedy delivery of the blueprint sets to the field crews was critical. As a result, reprographers often had multiple locations, distributed close to the customers, with delivery service included.

Reprographers were some of the earliest adopters of fully digital workflows, transitioning from analog prints using light and chemicals to wide-format xerographic toner-based devices. Plans and technical drawings are primarily monochrome, well-suited to early black-only xerographic devices. However, the seeds of many reprographers’ decline were planted in that initial transition to digital, as the need for printed copies by AEC customers was greatly reduced by increased electronic transmission and viewing of digitized technical drawings.

For some reprographers, the familiarity with wide-format monochrome printing devices and digital workflows became the foundation upon which to build a more robust business that offered a wide variety of services to a diverse client base. It was a small leap from the digital production of technical drawings to more generalized digital color wide-format printing.

Crisp Imaging in California acquired Advanced Digital Services, the latest in a long list of acquisitions completed by the company. Crisp is an exemplar of the convergence theory in the printing industry: the integration of various printing technologies, digitally connected, enabling print companies to offer a more comprehensive range of services and solutions. Crisp Imaging added five acquisitions in 2022 alone, with a total of eight companies purchased since 2021.

Crisp Imaging was founded in 2001 as a franchise copy shop, but soon thereafter the founders realized that there was a need to serve the AEC market in southern California and they transitioned their shop to an independent company focused on reprographic services. As the needs of the AEC market shifted from printed to digital documents, Crisp expanded its gamut of services to include banners, office wall graphics, tradeshow displays, vinyl lettering, floor graphics, and installation, among other services.

The company still offers wide-format black and white prints on bond and vellum papers, mylar prints, copy services, document scanning; all delivered via a company fleet in true reprographer style. The reprographic corporate DNA also runs deep in the company’s geographic strategy: many locations close to customers, now with twenty-one locations from Seattle to San Diego.

The Blueprint

The blueprint was one of the earliest methods of reproduction that relied on a photochemical reaction. Invented in 1842 by Sir John Herschel, the blueprint process enabled rapid and accurate reproduction of an unlimited number of copies. By the 1890’s, the process had virtually eliminated the expense of lithographic reproduction of architectural and technical drawings and was far less costly and much faster to produce than a hand-traced reproduction.

Originally named the cyanotype, the process is based on a photosensitive paper that has been impregnated with ammonium ferric citrate and then developed with potassium ferricyanide. A negative of the desired image, most often a line drawing on translucent paper, was placed over the treated paper, usually held in place by a sheet of glass in a frame. In Herschel’s time, the necessary exposure to ultraviolet light was obtained by placing the frame outside for a couple minutes under bright sun, or up to ten minutes on a cloudy day. The light-sensitive coating is thereby converted to a blue dye, which is then chemically stabilized. The non-exposed areas are washed away, leaving the white of the paper.

Herschel made numerous contributions to the photographic methods of reproduction and is credited with coining the term photography in 1839. He discovered the process of fixing a photograph, which he applied to his first glass-plate photograph from 1839, and since it was fixed, the photo still exists. (Those of us in the printing business pre-imagesetters and film processors will remember the final stage of producing negatives for offset printing, swishing negatives back and forth in a tray of chemical fixer). Herschel was the first to apply the terms negative and positive to photography, terms which we still use today. He was an early experimenter with concepts of color photography.

As amazing as were his contributions to printing and photography, these were but side interests for Sir Herschel. He originated the use of the Julian day system in astronomy, named seven moons of Saturn and four moons of Uranus, the seventh planet which had been discovered by his father, Sir William Herschel. He contributed to the philosophy of science, wrote several articles for the Encyclopedia Britannica, and was three times the president of the Royal Astronomical Society. He built his own 20-foot reflecting telescope, which he took to South Africa with his family to study the southern skies, and also discovered four galaxies.

While on the Cape of South Africa, Herschel and his wife Margaret produced botanical illustrations of local flora that are still considered reference works today. He wrote numerous papers and articles, and along the way, translated Homer’s Iliad into English. Herschel investigated color blindness and correctly figured out that astigmatism was an irregularity of the cornea.

His buddy Charles Babbage invented the predecessor to the modern computer. Another friend, George Everest, was the Surveyor General of India, for whom the tallest mountain on Earth is named. Sir Herschel speculated on the transition of languages and animal species over long periods of time. He was visited in South Africa by the young naturalist Charles Darwin who would later credit Herschel as an influence on his theory of evolution. The two scientists are buried side-by-side in Westminster Abbey.

I suppose that Sir Herschel would approve of how the modern computer, the descendent of his friend Babbage’s invention, has been integrated with the inkjet flatbed printer, a distant descendent of his own flatbed blueprint process, and evolved into the core of the modern reprographic shop.
   
2023 March - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

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

Party #1 Address

Deal Party #2		Pre-Deal
Revenue
(US$Mil)

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

Notes		Link
Phase 3 Marketing and Communications$28.9Atlanta, GATechnology Media GroupNo DataDallas, TX3/28/23No DataAcquisitionCommercial printing & promoLink
Canva Group
(Port co. W Investments)		No DataLaval, QCCanacadreNo DataBoucherville, QC3/28/23No DataAcquisitionRetail display hardwareLink
Convergent Print Group
né Vincent Printing		No DataChattanooga, TNBPGraphicsNo DataPhoenix, AZ3/27/23No DataMergerWide format printingLink
Crisp ImagingNo DataCosta Mesa, CAAdvanced Digital ServicesNo DataLivermore, CA3/27/23No DataAcquisitionReprographics & wide formatLink
eProductivity Software
(Div. Symphony Technology Group)		No DataFremont, CATharsten GroupNo DataColne, UK3/27/23No DataAcquisitionPrint MIS softwareLink
Millcraft PaperNo DataCleveland, OHTNT PapercraftNo DataCincinnati, OH3/24/23No DataAcquisitionPaper distributionLink
Modern Litho Mngt Team$50.6Jefferson City, MOModern Litho$50.6Jefferson City, MO3/23/23No DataAcquisitionCommercial printingLink
Kyocera$16,367Kyoto, JapanNIXKANo DataAubagne, France3/22/23No DataAcquisitionInkjet print systemsLink
El Rito MediaNo DataEspañola, NMArtesia Daily PressNo DataArtesia, NM3/13/23No DataAcquisition
(Dirks, Van Essen)		Community newspaperLink
Dentsu Group$9,457Tokyo, JapanTag Worldwide Holdings
(Port co. Advent International)		No DataLondon, UK3/7/23No DataAcquisitionMarketing production servicesLink
TC Transcontinental$2,198Montreal, QCMultifilm PackagingNo DataElgin, IL3/7/23No DataAcquisitionFlexible packagingLink
Inovar Packaging Group
(Port co. Kelso & Company)		No DataDallas, TXAmherst LabelNo DataMilford, NH3/1/23No DataAcquisitionLabel printingLink
BR PrintersNo DataSan Jose, CAJP GraphicsNo DataAppleton, CA3/1/23No DataAcquisitionCommercial printingLink
CJK Group$631.0Brainerd, MNMcNaughton & GunnNo DataSaline, MI3/1/23No DataAcquisitionBook manufacturingLink

   
2023 March - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



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


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
Nightmare Graphics3/12/23No Data23-11647Columbia, MD4thMaryland
Baltimore		Michelle M. HarnerMichael Patrick CoyleScreen printing & embroidery
Visionary Labels Packaging, LLC3/17/23No Data23-11032Fontana, CA9thCentral CA
Riverside		Magdalena Reyes BordeauxGiovanni OrantesShrink sleeves & can application
Chapter 7 Filings:
Printforia, Inc3/14/23No Data23-40375Vancouver, WA 9thWestern WA
Tacoma		Mary Jo HestonFaye C. RaschEcommerce print-on-demand

   
2023 March - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



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


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
A&M Trade Bindery4/27/23No DataHayward, CANoneN/AMar-23Bindery servicesLink
GH Print Consulting4/20/23No DataCicero, ILNoneN/AMar-23Commercial printingLink
Miller Imprints3/24/23No DataNewport, KYNoneN/AMar-23Screen PrintingLink
Prestige Embossing3/22/23No DataHouston, TXNoneN/AMar-23Trade finishingLink
↧

Sudden Drop-Off – April 2023 M&A Activity

May 7, 2023, 6:45 pm
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One Month Does Not Make a Trend

Deal activity fell off a cliff in April. The sudden drop off begs the question: are we heading into deeper turbulent waters? Is the dramatic decrease indicative of a declining M&A market in the printing, packaging, and related industries? Are recessionary times ahead? Does the increase in calls we have received from owners whose companies are at best treading water foretell more trouble to come? Or does the positive economic news about job creation, record low unemployment, and steady wage growth, among other factors, portend the way forward?

While it is too soon to tell, we do know for a fact that deal activity in April was the lowest we have logged in more than ten years of tracking the market. Incredibly, there were almost twice as many deals even in the worst months following the outbreak of Covid and the resultant business shutdown.





















Over the past eleven and a half years, we have reported on the very healthy level of merger and acquisition activity in the printing, packaging, and related industries. In some segments, that activity tells us that opportunities are excellent and financial buyers are seeking to put their capital to work and invest in growing markets. Sellers that have built successful companies in these segments take advantage of the positive market conditions and enjoy a comfortable exit from ownership.

Conversely, significant transactional activity in a particular printing industry segment, especially when correlated with data on tuck-ins, bankruptcy filings, and plant closures, is a very good indicator that business in that segment is getting tougher. Owners decide, or are forced, to sell or consolidate the business in a less advantageous transaction. In the worst situations, a company simply shuts its doors and liquidates.

The Analysis of Deal Trends Informs Us

We know that the commercial printing segment has stabilized over the past couple of years and some owners are reporting record revenues and profits. Financial buyers have returned to commercial printing, albeit with a keener interest in companies that have differentiated services or are specialized in serving specific market verticals. (See Commercial Print Awakes from M&A Slumber – June 2022).

As a percentage of the total number of deals in the commercial printing segment, tuck-ins have declined in each of the past four years, another indication that prospects in the commercial printing business have improved. Bankruptcies of commercial printing companies have declined both in number and impact. Another trend we have observed is a phenomenon we have not seen for years; private individuals are entering the commercial printing business. Buyers with no prior printing experience have acquired small to medium-size non-franchised general commercial printing companies, convinced that the printing industry is a sound investment of their time and money. The message is out; commercial printing is not dead, rather it has evolved and is still a vital component of the larger mix of available communication channels.

In the label manufacturing segment, transactional activity over the past several years paints a clear picture that the M&A market for label manufacturing companies has been on fire. The record shows that consolidation in the label business has been primarily driven by keen interest from a multitude of private equity firms. (See Duking it Out in the Label Business – February 2023). A corollary indication told us that the market for folding carton companies would be picking up, and indeed it has. Similar to labels, private equity sees opportunity in folding cartons. (See The Box is Back – January 2023).

From an M&A standpoint, the wide-format printing segment has been relatively quiet. In our discussions with owners of wide format companies, we hear that times are good again. With the end of the Covid pandemic shutdown, sporting and entertainment events are back. Retailers are open again and graphic signage of all sorts is booming.

However, we are finding that buyers are very skeptical of the sharp improvement in revenue and profits. Buyers are concerned that the recent positive numbers are the result of an unsustainable surge of pent-up demand that is a result of the Covid shutdown. We expect that M&A activity in wide-format will pick up as the dust settles. Owners of wide-format printing companies that can show that the good times are sustainable and not just a boomerang effect of Covid will find willing buyers.

In the industrial printing segment, a bastion of the screen printing process, we believe that there will be an increase in M&A activity and growth. The production of durable labels, nameplates, membrane switches, and graphic overlays will be of interest to buyers, driven in part by the impact of US industrial policy to bring manufacturing back to America. No longer just a slogan, the made-in-America policy is supported by massive federal funding of infrastructure and technology, with strict requirements for US-based manufacturing. One of the limited number of transactions in April was indeed in the industrial printing segment, the purchase of Massachusetts-based Eastprint by East West Manufacturing.

In addition to the response to government policy, increased stateside industrial printing will be fueled by fear. Supply-chain disruptions, such as experienced during the Covid pandemic, changed thinking about reliance on just-in-time global suppliers. The threat of an attack by China on Taiwan, and concern about China’s use of trade policy to gain political leverage by limiting supply of critical components, will also drive bring-it-back-to-America strategies.

Another transaction of note in April was the acquisition of DataProse, located in Coppell, Texas, by Matrix Imaging Solutions. Based in Sanborn, New York and with financial backing from Lakelet Capital, Matrix had previously acquired a direct mail company in Frederick, Maryland. Focused on direct mail and transactional printing services, Matrix is clearly executing on the trend we have noted towards multi-region acquisitions in direct mail and transactional customer communications. The larger firms in these related print segments have been increasingly going bi-coastal in an effort to mitigate degraded postal delivery time standards, as well as provide enterprise level customers with disaster recovery capabilities within one corporate structure. (See Direct Mail Providers Stretch Out – October 2022).

Stay Tuned …

What does it mean when M&A activity in our industry suddenly grinds almost to a halt? The current evidence is mixed, and it is too soon to draw a definitive conclusion. If the economy, and consequently, the printing, packaging, and related industries, are in for a rough patch, we would expect to find increasing bankruptcy filings and non-bankruptcy plant closures, which we do not. For better or worse, one thing we do know is that deal activity will continue in our industry, and there will be peaks and valleys. The reason for the current fall off remains below the surface, yet to be revealed.

   
2023 April - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

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

Party #1 Address

Deal Party #2		Pre-Deal
Revenue
(US$Mil)

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

Notes		Link
Avery
(Div. CCL Industries)		$4,735Toronto, ONData Management
(dba Threshold Visitor Management)		$7.0Farmington, CT4/28/23$6.8AcquisitionName badges & ID systemsLink
East West ManufacturingNo DataAtlanta, GAEastprintNo DataNorth Andover, MA4/17/23No DataAcquisitionPrinted electronic controlsLink
Matrix Imaging Solutions
(Port co. Lakelet Capital)		No DataSanborn, NYDataProseNo DataCoppell, TX4/13/23No DataAcquisitionTransactional print & servicesLink
Minuteman Press Spokane Valley (Existing franchisee)No DataSpokane Valley, WAWrapCo Signs & WrapsNo DataSpokane, WA4/10/23No DataAcquisitionWide format vehicle wrapsLink

 
2023 April - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenue
(US$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:
CEC Print Solutions, Inc.4/11/23No Data23-40410Union City, CA9thNorthern CA
Oakland		Charles NovackEric A. NybergCommercial printing

   
2023 April - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



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


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
No Plant Closures Found this Month------------------------
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The Party is Over at Vice Media, and Why it Matters – May 2023 M&A Activity

June 8, 2023, 10:02 pm
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Vice Media Group Files for Bankruptcy

Digital media upstart, darling, and enfant terrible Vice Media filed for Chapter 11 bankruptcy protection on May 15th. At its height, the company was valued at $5.7 billion. The stalking horse bid in the sale process to be conducted under the supervision of the US Bankruptcy Court sets the minimum bar for an alternative bidder at $225 million. This represents a decline of 96% in market value from the peak high value mark accorded to Vice Media in June of 2017.

On April 20th, another beloved digital internet media company, BuzzFeed, announced it was shutting down BuzzFeed News, its online news site, with additional layoffs planned across the organization. Founded in 2006, nerdy BuzzFeed made headlines in 2014 when it raised $50 million of funding from Andreesen Horowitz, one of Silicon Valley’s premiere venture capital firms. In 2016, NBC Universal invested its second $200 million round in BuzzFeed which brought the total enterprise value of the company to $1.5 billion.

With their sky-high valuations, it appeared that the pure digital media companies were on a roll and would come to dominate the market for advertiser’s budgets. Fueling the digital companies, venture capital firms and legacy media companies doled out big dollops of money, rounded to the nearest fifty million. At the same time, when Vice Media was at its peak, the future of the printing industry seemed uncertain. RR Donnelley, the largest printing company in the US for decades, had just split into three companies, one of which, LSC Communications, eventually filed for bankruptcy. Another large diverse printing company, Cenveo, had lost its way and was divesting assets, closing plants, and headed shortly thereafter for bankruptcy court.

From Punk Rock Hipster Tabloid to Hardcore Reporting to Irrelevant

Vice Media was founded in 1994 as the Voice of Montreal, an alternative free print magazine with funding from a Canadian government welfare program. The content was hip, humorous, offensive, and most important, aimed at the youth audience that felt left out and could not relate to mainstream media. A dispute with the original publisher led to the name change to Vice in 1996, iconic, irreverent, and more appropriate to the founders' punk rock roots.

The three founders conned and cajoled their way to obtain a first tranche of outside investment funding which precipitated a move to New York City. One of the partners, eventual CEO and guiding force of the firm, Shane Smith, was a master at fundraising. His style was arrogant, and he was convincing; Vice Media was the direct channel to the next generation. All existing media was so yesterday, and if legacy channels had any chance of surviving, they had better jump on board and invest in Vice Media. Viacom anted up $2 million for an early foray into an online video channel, with Smith at the helm.

One of the other founders, Gavin McInnes, was the editorial voice of the early Vice ventures. He had an acerbic sense of humor and frankly just plain bad taste. But youngsters loved it. (McInnes left Vice in 2008, reportedly forced out due to his noxious comments about minority groups. He veered off into far-right political activities, including eventually founding the infamous Proud Boys.)

When Intel came calling about a possible ad campaign that was integrated with editorial content, Shane masterminded the overnight creation of an ersatz ad agency complete with twenty-somethings milling about with laptops and a phony photo studio. Intel was impressed and ponied up $25 million to launch The Creators Project, which showcased and supported the work of artists, designers, musicians, filmmakers, and other creatives at the intersection of art and technology. It was a success and a viral hit.

Next came a digital distribution deal with CNN, followed by investments from WPP, the British mega advertising agency, and the CEO of MTV. A documentary series was launched which ran on HBO. In an unlikely coup for the show, Vice Media arranged for members of the Harlem Globetrotters and Chicago Bulls basketball player Dennis Rodman to travel to North Korea and meet with dictator Kim Jong-un. Vice was now making news rather than just reporting it. Much of the content was edgy, delivered in a raw, visceral, jarring style. The film crews sought out places of violence and disruption. Vice defiantly landed journalists and a film crew inside Iraq and Syria during the terrorist occupation of the region, winning a Peabody Award for the highly controversial film The Islamic State.

Next in line for the Shane Smith treatment was Rupert Murdoch, who was reportedly told that his media empire was living in the past. If he wanted to reach Gen Y with social and online video, in short, did he want a piece of the future, then get on board and invest in Vice. Murdoch wrote out a check for $70 million, pushing the implied value of Vice Media to just north of a billion dollars.

From that point on, the money just flowed in (and back out). A&E Networks, owned by Disney and Hearst, invested $250 million, with another $250 million pouring in the next month from Silicon Valley venture capital firm Technology Crossover Ventures (TCV). Private equity firm TPG invested $450 million in a transaction which valued the entire company at $5.7 billion, the peak for Vice Media. At one point in the midst of all this craziness and money, Smith was quoted as saying that Vice would be ten times the size of CNN.

But there was a dark side to all this success. The allure of working for the hippest media company led to the “22 Rule” syndrome; hire 22 year-olds, pay them $22,000 for the privilege of working at Vice Media, and work them 22 hours a day. Drug use was reportedly rampant in a frat-boy environment in which the top executives enjoyed lavish perks, parties, and pranks. Shane Smith faced allegations of running a sexually abusive environment and stepped down from his role as CEO. The punk rocker from Montreal was now middle aged, as was also the media empire he founded.

At one point, Vice was the tenth highest valued private company in America. But the shine had started to dull. Ad tracking technology caught up and advertisers were better able to track who was watching the Vice offerings. Not all the reported watchers were actual viewers; a significant portion were apparently bot programs creating false viewership figures. Maybe worst of all, the viewers that did watch Vice were themselves getting older. Vice was no longer recognized as the cool brand by teenagers who had moved on from the punk rock aesthetic that permeated the Vice offerings. Advertisers began to seek other delivery channels to reach the new younger generation.

The Resilience of the Print Medium

As the recent bankruptcy filing of Vice Media and closure of BuzzFeed News show us, online digital media is not immune to market forces. The bulk of advertising dollars flowed to the social media platforms and search engines, not to the content providers. Pittances trickled down to the actual producers and creators such as Vice Media and BuzzFeed. In the meantime, advertisers have retained their interest in print in its many forms, from direct mail to wide-format displays. As we can see over the past two years in our deal logs of M&A activity, investors and consolidators are back in the print game.

It would be a mistake to interpret the failure of two digital media channels, Vice Media and BuzzFeed News, as a permanent halt in the inexorable move to a more digital multi-channel content delivery world. That movement will continue, however there will be fits and starts, new players and channels, and printed material will be there as the steady hand that delivers.

   
2023 May - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

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

Party #1 Address

Deal Party #2		Pre-Deal
Revenue
(US$Mil)

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

Notes		Link
Wallace Graphics$19.7Duluth, GAThe Corporate ShopNo DataDuluth, GA5/31/23No DataAcquisitionPromotional productsLink
Wilmer
(Sub. Navitor, a Taylor Corp co.)		No DataNorth Mankato, MNPrintcoNo DataOmro, WI5/30/23No DataAcquisitionBusiness formsLink
Kodak$1,190Rochester, NYGraphic Systems ServicesNo DataSpringboro, OH5/30/23No DataAcquisitionWeb press systems & supportLink
Mactac
(Div. Lintec)		No DataStow, OhioLabel SupplyNo DataWhitby, ON5/24/23No DataAcquisitionLabel stock distributorLink
Duraco Specialty Materials
(Port co. OpenGate Capital)		No DataForest Park, ILStrata-TacNo DataSt. Charles, IL5/23/23No DataAcquisitionLabel stock manufacturingLink
Ennis$431.8Midlothian, TX Stylecraft PrintingNo DataCanton, MI5/23/23No DataAcquisitionBusiness formsLink
Purpose GroupNo DataAtlanta, GAGerald Printing & Liberty ImagingNo DataBowling Green, KY5/19/23No DataAcquisitionPrinting & copyingLink
GelpacNo DataMarieville, QCStandard BagNo DataBeaverton, OR5/17/23No DataAcquisition
(Mesirow)		Multiwall bag manufacturingLink
DRG TechnologiesNo DataSafford, AZLa Fiesta Label & Packaging SystemsNo DataChandler, AZ5/15/23No DataAcquisition
(Corp Dev Assoc)		Flexible packaging & labelsLink
Minuteman Press, Amherst
(New franchisee)		No DataAmherst, OHDowntown DirectNo DataAmherst, OH5/15/23No DataAcquisitionPrinting & copyingLink
ChromascapeNo DataTwinsburg, OHColorants & dye business
(Div. Kemira)		No DataGoose Creek, SC5/8/23No DataAcquisitionPaper & pulp pigments & dyesLink
ValsoftNo DataMontreal, QCNexeraNo DataMontreal, QC5/8/23No DataAcquisitionManaged print softwareLink
SupremeX$220.0Lasalle, QCGraf-Pak$5.0Pointe-Claire, QC5/8/23$4.5AcquisitionFolding cartonsLink
Bobst Group
(Port co JBF Finance)		No DataLausanne,
Switzerland		Dücker RoboticsNo DataMomo, Italy5/8/23No DataAcquisitionCorrugated material handlingLink
Spicers Canada
(Div. Central National Gottesman)		No Data
($10,000)		Vaughan, ON
(Purchase, NY)		TG GraphicsNo DataSt. Laurent, QC5/4/23No DataAcquisitionGraphic supplies distributorLink
Keypoint Intelligence
Port co. Atar Capital)		No DataFairfield, NJProPrintPerformanceNo DataStockholm, Sweden5/2/23No DataAcquisitionDigital print consultingLink
HPS Investment PartnersNo DataNew York, NYSGS & Co
(Southern Graphic Systems)		No DataLouisville, KY5/1/23No DataAcquisition
(Evercore)		Branding & prepress servicesLink

   
2023 May - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



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


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
ZIP Mailing Services, Inc.5/26/23No Data23-13736Landover, MD4thMaryland
Greenbelt		Maria Ellena Chavez-RuarkChristopher L. HamlinPrinting & mailing services
Vice Group Holding Inc.
(Port co. TPG)		5/15/23No Data23-10738Brooklyn, NY2ndSouthern NY
Manhattan		John P. Mastando IIIKyle J. OrtizPublishing
E-B Display Company, Inc.5/12/23No Data23-60565Massillon, OH6thNorthern OH
Youngstown		Tiiara N.A. PattonMatthew N. DaneseRetail displays
Chapter 7 Filings:
No Chapter 7 Filings Found this Month---------------------------
   

2023 May - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



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


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
El Dorado PackagingTBDNo DataEl Dorado, ARProAmPac
(Port co. Pritzker Partners)		Cincinnati, OH5/26/23Paper bag manufacturingLink
Bindagraphics7/9/23No DataBaltimore, MDNoneN/AMay-23Trade bindery servicesLink
Art Laminating & Finishing7/9/23No DataAtlanta, GABindagraphicsBaltimore, MDMay-23Trade bindery servicesLink
Princeton Printer5/22/23No DataPrinceton, NJNoneN/AMay-23Printing & copyingLink
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Stick to Your Knitting – June 2023 M&A Activity

July 7, 2023, 8:30 pm
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The phrase “stick to your knitting” can be traced back to 1820 in American literature; but the concept is much older. In Greek times, Pliny the Elder noted that the “cobbler should stick to his last” because shoe-making is what a cobbler does best. The concept is simple, concentrate on one’s core business.

Increasing Market Penetration

In a move that shows a steady hand on the tiller, the Lakeside Book Company has acquired Marquis Book Printing, Canada’s largest book manufacturing company. The acquisition adds significant Canadian book production capacity to Lakeside Book, maintaining the company’s renewed laser-like focus on its core book manufacturing business. It’s a great example of a company that is executing a classic M&A strategy: acquire a business to increase presence and strength in the market for its existing product specialty. There is the added positive geographic rationale to this deal, expanding into Canadian English and French-speaking markets. Lakeside also noted in the press release that an additional factor in the decision to acquire Marquis was its business model, which serves small to mid-sized publishers. Nonetheless, at its heart, the acquisition of Marquis by Lakeside Book is additive to the core business. This was not a move to diversify and add a new and disparate product or service offering.

Sticking to its knitting, this recent deal piggy-backs on Lakeside’s 2022 acquisition of Maryland-based Phoenix Color. With backing from private equity sponsor ALJ Regional Holdings since 2015, Phoenix Color had completed several acquisitions and built a strong position as a specialty printer of highly decorated book components and heavily-illustrated children’s books. The purchase by Lakeside Book was predicated on and strengthened Lakeside’s existing position in book manufacturing.

As the book printing division of RR Donnelley, Lakeside Book traces its history back to 1864 when Richard Robert Donnelley started a small print shop in Chicago. In honor of its position near Lake Michigan, RR named his company the Lakeside Printing and Publishing Company. Lakeside would fade from the name over the corporate door, but “Lakeside” would be resurrected time and time again over the next hundred and fifty years.

The original Lakeside Printing building was destroyed in the Great Chicago Fire of 1871. Thirty years later, no doubt with memories of the fire loss in mind, RR commissioned the massive Lakeside Press Building in downtown Chicago and the huge Calumet Lakeside Plant, both purportedly designed to be fireproof. The two iconic buildings still stand today; the historic downtown site has been renovated and converted to loft style apartments serving the university that has grown up around the traditional Printers Row district. The Calumet plant, located down the lake shore, right next to McCormick Place, the home of many a printing industry trade show, has, ironically, been converted to an internet host data center.

Book printing played a crucial role within the RR Donnelley company and was often a point of pride for the company. In 1926, the company launched its “Four American Books” campaign, an effort to prove that American printing technology could equal the quality of the traditional European book printing houses. In addition to illustrated versions of Tales of Edgar Allen Poe and Two Years Before the Mast, the series’ best known book was the edition of Moby-Dick by Herman Melville, illustrated by Rockwell Kent. The initial production, a three-volume limited edition of one thousand copies issued in an aluminum slipcase, prefaced a series of subsequent more affordable editions that established Moby-Dick as a popular book, now considered an American classic.

In 2016, after many years of tremendous growth and diversification via acquisitions, the company appeared to have lost its way forward, and the largest printing company in the US split itself into three pieces. Book printing ended up in the newly-formed LSC Communications. The LSC name harkened back to the original company name and The Lakeside Classics, the annual Christmas-time publication of unique hardcover case-bound books. These highly collectable books were never sold by RR Donnelley, but rather were given as gifts to employees, stockholders, vendors and business associates. (See The Target Report: Transformation and Rebirth – July 2017).

After the split and divestiture from RR Donnelley, LSC Communications then began an acquisition spree of its own which seemed designed to recreate a mirror image of the former diversified RR Donnelley. LSC acquired a company that provided digital-content management and e-delivery services, commercial printing operations, and several logistics companies. Incredibly, one of the acquisitions included the print logistics business of its former brethren RRD which had inextricably ended up in the wrong place in the three-way split. Debt piled up. A failed attempt to sell itself to Quad/Graphics was squashed by the US Department of Justice, and LSC filed for Chapter 11 bankruptcy protection. Atlas Holdings, which owns several paper manufacturing companies and has deep experience in the packaging industry, emerged as the buyer of LSC Communications in a Section 363 asset sale in the bankruptcy proceeding. (See The Target Report: Deconsolidation of the Consolidators – October 2020 M&A).

Under the guidance and ownership of Atlas Holdings, LSC Communications has focused its book printing business on book printing. Lest there be any doubt about the division’s focus, in 2021 Atlas Holdings jettisoned the LSC name for its book printing division and rebranded it as simply the Lakeside Book Company, harkening back to the many uses of the “Lakeside” name, extending from its founding as a small Chicago-based printing company, to the names of its massive printing plants, to the moniker of its classic print gift editions. In the press release that announced the name change, there was clarity of purpose: the Lakeside Book Company would focus on crafting books and serving its customers, the publishing houses. That certainty of purpose was evident in the recent acquisitions by the Lakeside Book Company: build on and extend market share within the core product segment.

Entering an Adjacent Product Segment

CCL Industries, the notably disciplined global acquirer of specialty label printing companies, has made a move into a new, but adjacent, product line with the acquisition of Pouch Partners from the Swiss-based Capri-Sun Group. With plants in Germany and Italy, Pouch Partners provides printed films and pre-made stand-up pouches. CCL announced that the all-cash purchase price for Pouch Partners was $33 million, a cash-free, debt-free enterprise value of 6.5 times 2022 adjusted EBITDA of $5.1 million (figures have been converted from CAD to USD). The price paid was consistent with CCL’s past practice of maintaining a narrow and controlled purchase price range in its acquisitions. (See The Target Report: CCL Industries Breaks the Rules – January 2022).

The original stand-up pouch was invented in 1963 by Louis Doyen, CEO of French sewing machine manufacturer Thimonnier. The unique design, known as the Doy-N-Pack or DoyPack after the inventor, languished due to the expense of the pouch compared to flat pillow pouches and the folded juice box, also invented in 1963. It took until 1969 for the pouch to catch on, when a German entrepreneur, Rudolf Wild, created a sugary “all natural” drink, which he named after the Italian island of Capri to suggest a semi-tropical and exotic origin. Seeking a unique way to package his concoction, he arranged to acquire the rights to use the patented Thimonnier pouch design, originally purchasing all the machines they could make to block competition from copying his design.

Originally branded Capri-Sonne in Germany, the brand was introduced into the US with an ad campaign featuring champion boxer Muhammad Ali who touted the juice in the convenient lunch-box-compatible pouch as “the greatest of all time.” Ali reportedly actually liked the juice and the endorsement deal included one crate of the product delivered to him every week for four years. The bright packaging designs, sweetened juice flavors, and added convenience of an attached little bendable straw, all combined to create a hit, especially among the school lunch-box set. The stand-up pouch was established and became a viable lightweight packaging alternative to bottles, cans, or boxes. Now produced under license worldwide under the Capri-Sun brand and marketed as Capri Sun in the US, the brand is sold in over 100 countries, including China, and African and Middle East countries.

The assets acquired by CCL include the two manufacturing plants which supply highly-specialized, gravure-printed & laminated, flexible film materials for the production of pouches. Pouch Partners was not owned for long by Capri-Sun prior to the sale to CCL, having been acquired recently by the Capri-Sun Group in 2017. Commenting on the divestiture of the pouch business, the CEO of Capri-Sun noted that it was time for them to re-focus on their core business of beverages (sticking to their knitting?) For its part, CCL picks up a new competency with a committed and loyal customer for its output from day one of its ownership.

The president of CCL’s food & beverage label business made it clear that the company had been thinking about entering into the pouch packaging business for a long time, and that from an M&A perspective, the acquisition brought “highly-focused, deep know-how for these materials, and a solid foundation to enter this market.” The CEO of CCL noted that if the investment in pouches in Europe was successful, the company might develop the product line globally, alongside the company’s decorative label portfolio. There is clarity of purpose in CCL’s stated M&A strategy: enter an adjacent market and acquire domain expertise via acquisition.
   
2023 June - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

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

Party #1 Address

Deal Party #2		Pre-Deal
Revenue
(US$Mil)

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

Notes		Link
Oliver Healthcare PackagingNo DataTrevose, PAEK-PackNo DataBavaria, Germany6/29/23No DataAcquisitionPackaging filmsLink
manroland Goss
(Port co. American Ind. Partners)		No DataAugsburg,
Germany		Galred EuropeNo DataNieuwkuijk,
The Netherlands		6/28/23No DataAcquisitionUsed printing equipmentLink
Piedmont PlasticsNo DataMorrisville, NCDiversified Display ProductsNo DataHillside, NJ6/26/23No DataAcquisitionWide format suppliesLink
PaperWorks Industries
(Port co. Gamut Capital)		No DataBala Cynwyd, PAThe Standard GroupNo DataLouisville, KY6/23/23No DataAcquisitionFolding cartonsLink
Heeter$33.0Canonsburg, PALaurel Print & GraphicNo DataDuquesne, PA6/20/23No DataAcquisitionWide format printingLink
CCL Industries$4,896Toronto, ONPouch Partners
(Div. Capri-Sun Group)		$78.2Baar, Switzerland6/16/23$33.1AcquisitionFlexible packaging & filmsLink
Resource Label Group
(Port co. Ares Management)		No DataFranklin, TNPharmaceutic Litho & LabelNo DataSimi Valley, CA6/15/23No DataAcquisitionLabel printing & insertsLink
Loftin & Co. PrintersNo DataCharlotte, NCAction GraphicsNo DataCharlotte, NC6/14/23No DataAcquisitionCommercial printingLink
Port City Copy CenterNo DataOswego, NYOswego PrintingNo DataOswego, NY6/12/23No DataAcquisitionCommercial printingLink
AWT Labels & Packaging
(Port co. Morgan Stanley Capital)		No DataMinneapolis, MN ASL Print FXNo DataVaughan, ON6/8/23No DataAcquisitionLabel printingLink
CherryRoad MediaNo DataParsippany, NJCass County Star-Gazette
(Prop. Delphos Herald)		No DataBeardstown, IL6/8/23No DataAcquisitionCommunity newspaperLink
Center Rock Capital PartnersNo DataBloomfield Hills, MI Mark Andy, div. MAI Holdings.No DataChesterfield, MO6/8/23No DataAcquisitionPrinting press manufacturingLink
Monomoy Capital PartnersNo DataNew York, NYJaps-Olson$215.0St. Louis Park, MN6/6/23No DataAcquisitionDirect mail printingLink
Ennis$435.5Midlothian, TX UMC PrintNo DataOverland Park, KS 6/2/23No DataAsset AcquisitionCommercial trade printingLink
Lakeside Book, Div. LSC
(Port co. Atlas Holdings)		No DataChicago, ILMarquisNo DataMontmagny, QC6/1/23No DataAcquisitionBook manufacturingLink


2023 June - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



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


Case #


Filing Party Address


Circuit


Region & City


Judge


Attorney for Debtor


Notes
Chapter 11 Filings:
Color Craft Flexible Packaging, LLC6/26/23No Data23-01421Memphis, TN3rdMiddle PA
Wilkes-Barre		Mark J. ConwayJeffrey D. KurtzmanFlexible packaging
Chapter 7 Filings:
Beacon Container Corporation6/12/23No Data23-11727Birdsboro, PA3rd Eastern PA
Reading		Patricia M. MayerThomas D. BielliCorrugated cartons & displays


2023 June - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



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


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
LSC Communications - Printing facility9/24/23No DataWarsaw, INLSC CommunicationsWarrenville, IL6/6/23Catalog & publication printingLink
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116 Laps Around Fenway Park, Barefoot – July 2023 M&A Activity

August 7, 2023, 7:24 pm
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Reade Brower, the intrepid barefoot Hawaiian shirt-clad serial entrepreneur, announced the sale of his company’s 22 newspapers to the National Trust for Local News (NTLN). Based in Denver, Colorado, the nonprofit organization is acquiring five daily newspapers and 17 weekly papers from Masthead Maine, the news organization that Brower has assembled over the past decade as opportunities arose and he was the right person in the right place at the right time with the right resources. By deciding to pass his ownership of the papers over to NTLN, Brower has sidestepped the path of many of the other regional publishers that have sold out to one of the larger financial buyers. In doing so, he expressed his hope that his sale would be different: newsroom staff would be retained, and the high quality of the papers be maintained for the next generation.

Many newspapers in the US trace their history back well over a hundred years. But for many publishers, the race has become too painful. Exhausted, they drop out. Recent research indicates that on average two newspapers go out of business each and every week, a pace of decline that has been sustained, on average, for the past two decades. Moreover, many daily papers have reduced the frequency of their printed editions. Weekly papers drop from seven to three or four days a week, biweeklies become weekly papers. Stories of gutted newsrooms abound. The reporters that remain are overworked and underpaid. The loss is felt particularly hard in rural communities. With the cessation of local news reporting, “news deserts” are popping up where there is no accountability at the local municipal and county levels. Sports and community events go un-recorded or transitioned to the online ether of the internet.

One strategy to save struggling newspapers has been the conversion of newspaper publishing companies to tax-exempt nonprofit organizations dedicated to serving the public good, supported by a mix of donations, renewed emphasis on paid subscriptions, and the erection of paywalls for online access, as well as retaining what is left of the traditional print advertising base. In late 2019, The Salt Lake Tribune spearheaded the concept, obtained IRS approval of its application for tax-exempt status, and became the first nonprofit major metropolitan newspaper.

Other conversions followed, including The Chicago Sun-Times, which converted to nonprofit status via a merger with the local public radio station, a natural and convenient pathway given public radio’s focus on news and deep experience with nonprofit status.

There are several models that are playing out in the effort to save big-city papers. The publishers that have switched to nonprofit status, as did The Salt Lake Tribune, are distinctly different from the for-profit publishers which are separate from, but now owned by, a nonprofit foundation that acquires the paper. For example, The Philadelphia Inquirer is a for-profit company that is owned by the nonprofit Lenfest Institute. The other method of saving a drowning major news organization is the purchase by a wealthy buyer, probably best known and exemplified by Jeff Bezos’ purchase of The Washington Post. The jury is still out on which model will prevail in the efforts to save the major metro newspapers, however in the local newspaper business, the nonprofit model is gaining traction, supported and nurtured by the National Trust for Local News.

Santa Barbara News-Press Abruptly Closes

Ampersand Publishing, the owner of the venerable Santa Barbara News-Press, filed Chapter 7 bankruptcy, effectively starting the process of liquidating under the auspices of the US Bankruptcy Court. The paper ceased publication abruptly on a Friday in July when the company could no longer fund its payroll, which ended the run of the newspaper that began in 1868 as the weekly Santa Barbara Post. The paper punched above its weight as a serious regional paper and gained national recognition in 1962 when it was awarded a Pulitzer Prize for its editorials exposing the John Birch Society.

The paper was purchased from the New York Times for a reported $110 million in 2000 by Wendy McCaw, the wealthy ex-wife of Craig McCaw the founder of the early cell phone pioneer McCaw Communications. The end of the Santa Barbara News-Press newspaper marks the end of not only the publication of the paper, but also the end of her ignominious and highly contentious term of ownership. A Santa Barbara resident, she initially expressed her intention to leave the day-to-day management and editorial direction to the professionals who ran the paper. McCaw publicly stated that she was committed to preserving the paper’s independence and unquestioned integrity.

After a very hopeful start, buoyed by Santa Barbara residents’ feelings that local ownership was preferable to the big-city east coast owners, her ownership quickly turned sour. She launched into an impassioned and obsessive animal rights campaign, hijacking the front page to express her personal positions, a follow-up to her earlier successful efforts to free the killer whale Keiko, the star of Free Willy. The editorial page took on an increasingly acerbic anti-local government position, often personally attacking local politicians. Controversy broke out over McCaw’s repeated interference with the editorial stories, and a full-blown exodus of talent ensued. Labor disputes followed; the Teamsters union was invited in and overwhelmingly won certification. The battles played out in print and gained national attention. Taking a cue from Orson Welles’ Citizen Kane, in 2008 local filmmakers produced Citizen McCaw, a damning and fascinating documentary about McCaw’s tenure and impact on the paper and community.

The printing presses stopped running at the Santa Barbara News-Press in April. The paper reported that they were unable to run the press due to power issues and would be temporarily an all-digital publication until the power problems were resolved. Despite the assertion that the suspension of print was an interim step, the printed edition never resumed. The final story of the famed Santa Barbara paper will be written on the court docket in the Chapter 7 bankruptcy.

Stop The Presses in Coal Country

The residents of McDowell County in West Virginia lost their local paper a couple months ago and have joined the ranks of Americans living in a news desert. The Welch News was owned and managed by Missy Nester, a local resident who bought the paper in 2018 and poured her heart, soul, and pocketbook into the paper which had been published for almost 100 years. Like many other papers, The Welch News, at one time a daily paper, cut its schedule of print runs down last year from three times a week to just weekly.

The paper, with a total staff of four, faced a daunting challenge to maintain operations in a region with a declining population, housed in an old building in which the roof was failing. The paper was printed on a vintage 1966 Goss coldset web press which was housed in the basement. Many of Nester’s neighbors wanted the paper to survive and would help out in ways that only works in small towns. Nester would find cash or even meals taped to her front door to help her in the effort to keep the paper afloat. The sacrifices just became too much, and the paper printed its last edition in March.

The county once had almost 100,00 residents and was the world’s largest coal producer, calling itself “America’s coal bin.” Times have changed. The remaining 17,850 residents no longer have a source of local news, reduced to finding out what is happening in their community on Twitter, that is if they have cell service or internet which is not certain, especially among the elderly that relied on news in print.

The Accidental News Baron

Reade Brower, the entrepreneur who sold his papers to the NTLN, was quoted as saying that much of his success has been due to scrapping and hustling; a bit of being in the right place at the right time, and more than anything else, simply his grit. As if being in the newspaper business is not a sufficient test of that grit, Brower, a committed runner, ran the lesser-known Boston Marathon, a fundraiser of the Red Sox Foundation in which participants circle the practice track inside the famed Fenway Park 116 times which achieves the required 26.2 miles. Since he had completed marathons in the past, Brower needed an extra challenge; he ran the race barefoot on the hardscrabble track. He finished in last place. The lights were out, and everybody else had gone home.

For Brower’s 22 newspapers in Maine, a new chapter has begun, and the lights are still on.
   
2023 July - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

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

Party #1 Address

Deal Party #2		Pre-Deal
Revenue
(US$Mil)

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

Notes		Link
One Rock Capital PartnersNo DataNew York, NYConstantia Flexibles
(Portfolio co. Wendell Group)		No DataVienna, Austria7/31/23No DataAcquisition
(Evercore)		Flexible packagingLink
Mittera$555.4Des Moines, IAThe AngstromGroupNo DataCleveland, OH7/28/23No DataAcquisitionCommercial printingLink
Mt. Royal Printing
(Advised by Graphic Arts Advisors)		No DataBaltimore, MDWestland EnterprisesNo DataForestville, MD7/20/23No DataAcquisition
(Graphic Arts Advisors)		Commercial printingLink
Marek Group$41.9Waukesha, WIHighNoteNo DataLouisville, KY7/18/23No DataAcquisitionMarketing execution servicesLink
Dumont PrintingNo DataFresno, CAValPrintNo DataFresno, CA7/13/23No DataAcquisitionCommercial printingLink
National Trust for Local NewsNo DataDenver, COThe Portland Press Herald
(+21 titles) (Prop. Masthead Maine)		No DataPortland, ME7/11/23No DataAcquisitionRegional NewspapersLink
Ancor Capital Partners
w/ Merit Capital Partners		No DataSouthlake, TX
Chicago, IL		DisplayitNo DataIrvine, CA7/11/23No DataAcquisitionRetail display & environmentsLink
Fair AndreenNo DataBelvidere, ILCityPress
(Advised by Graphic Arts Advisors)		No DataWaukesha, WI7/11/23No DataAcquisition
(Graphic Arts Advisors)		Commercial printingLink
Resource Label Group
(Port co. Ares Management)		No DataFranklin, TNTQL Packaging SolutionsNo DataDallas, TX7/11/23No DataAcquisitionLabels, & flexible packagingLink
TecnauNo DataIvrea, ItalySitma MachineryNo DataSpilamberto, Italy7/11/23No DataAcquisitionPostpress equipmentLink
Minuteman Press, Avon Lake
(New franchisee)		No DataAvon Lake, OHAvon Lake PrintingNo DataAvon Lake, OH7/7/23No DataAcquisitionPrinting & copyingLink
CCL Industries$4,896Toronto, ONOomph Made Ltd.$5.0Liphook, UK7/4/23$5.4AcquisitionRFID cards & wristbandsLink


2023 July - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party
Date
Case
Filed		Pre-Petition
Revenue
(US$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:
Ampersand Publishing, LLC7/21/23No Data23-10601Santa Barbara, CA9thCentral CA
Santa Barbara		Ronald A. Clifford IIIAnthony A. FriedmanSanta Barbara News-Press Publisher

   
2023 July - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



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


Closing Address		Related PartyRelated Party
Address		Date Closure Public


Notes
Press
Releases
UPM - Paper millDec-23No DataPlattling, GermanyUPM Communication PapersAugsburg, Germany7/25/23Graphic paper productionLink
AngstromGraphicsSep-23No DataCleveland, OHNoneN/A7/28/23Commercial printingLink
The Welch NewsMar-23No DataWelch, WVNoneN/A7/28/23Community newspaperLink
Balfour & Co. - Printing facility10/31/23No DataDallas, TXNoneN/A7/7/23Yearbook productionLink
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