Private Equity LOVES Labels – August 2016 M&A Activity

It’s a love affair - private equity firms are hot for printing companies that specialize in prime labels and flexible packaging. AEA Investors, a New York City-based private equity fund, announced that it was adding to its holding in the label printing segment with the addition of three companies to be bolted-on to its portfolio platform company Inovar Packaging Group which the fund acquired earlier this year. The triple-play acquisition brings Murray Label & Packaging in Dallas, Texas, 21st Century Labels & Packaging in Davie, Florida and SafePrints in Miami, Florida into the Inovar Packaging Group. The acquired companies produce custom prime pressure sensitive labels, printed shrink sleeves, cartons and flexible packaging. AEA Investors is a very senior member in the PE world, with lineage going back to 1968, and American aristocrat founders including the Rockefeller, Mellon, and Harriman families. The firm has approximately $10 billion in assets under management with offices on three continents. They clearly like the label business.

Advent International, middle-aged in PE firm years, having been established in 1984, stepped into the US label printing business in a big way in August. Advent announced the acquisition of Fort Dearborn, a supplier of prime labels headquartered in Elk Grove, Illinois. This is a secondary buyout of Fort Dearborn, which has been a portfolio platform company of KRG Capital Partners which acquired Fort Dearborn in 2010 and completed four add-ons to the company since 2013. Fort Dearborn is now one of only a few major players in the otherwise highly fragmented label printing segment. The company is reportedly now the third largest supplier of prime labels in the North American market, with 15 manufacturing facilities and approximately 1,675 employees. Like AEA Investors, Advent International also has patrician roots, founded by Peter Brooke who had previously founded TA Associates, an early and very successful venture capital firm. Advent just completed raising $13 billion for its eighth global fund, bringing its total to $42 billion under management. They also like the label business.

Here are more private equity firms that have shown the love for the label and
related printing segments during 2015 and the first eight months of 2016:

PE Activity in Label & Related Printing Segments (2015/2016)
Private Equity - Buyer	Platform Company	Acquired Company (PE Seller)	Month
Advent International	N/A	Fort Dearborn (Port co. KRG Capital Partners)	Aug-16
AEA Investors	Inovar Packaging Group	Murray Label & Packaging	Aug-16
AEA Investors	Inovar Packaging Group	21st Century Labels & Packaging	Aug-16
AEA Investors	Inovar Packaging Group	SafePrints	Aug-16
Svoboda Capital	Infinite Packaging	Hyde Park Label	Apr-16
AEA Investors	N/A	Inovar Packaging Group	Jan-16
Wellspring Capital	ProAmpac	Coating Excellence International	Dec-15
Saugatuck Capital	Pharmaceutic Litho & Label	Plymouth Printing	Nov-15
Sidereal Capital Group	N/A	Flexo Transparent	Oct-15
Wind Point Partners	Novolex	Wisconsin Film & Bag (Port co. Argosy Partners)	Oct-15
Wellspring Capital	Prolamina	Ampac Holdings	Aug-15
Mason Wells	N/A	AWT Labels & Packaging	Jun-15
Sun Capital Partners	Coveris	Olefinas	Jun-15
Sun Capital Partners	Coveris	Elldex Packaging Solutions	Jun-15
Highlander Partners	N/A	Popular Ink	Feb-15
Wendell Group	N/A	Constantia Flexibles (Port co. One Equity Partners)	Jan-15

Commercial Printing - Diversified Services

Firespring, a diverse marketing services provider in Lincoln, Nebraska, added two more printing companies to the roster of Midwest firms it has rolled up over the past two years. In this latest transaction, the company acquired commercial printer Jacob North Print & Media along with quick printer A to Z Printing which had merged with Jacob North in November 2014. Jacob North may have finally found a home after 128 years in business, having filed bankruptcy in 2013, purchased in a bankruptcy auction at a fire sale price by Nebraska-based Midstates Print & Media Solutions in 2013 (see The Target Report – June 2013), and now sold again, this time to Firespring.

Firespring’s slogan is “A force for good” and its website features millennials eating, playing, and working together to use their creative marketing and production capabilities to “do good.” In furtherance of its dedication to assist non-profit organizations with marketing services, Firespring announced another acquisition in August, the purchase of online crowdfunding platform Deposit a Gift.

In other deals in the commercial printing segment, Maine-based serial acquirer J.S. McCarthy Printers acquired the remaining business of Artco Offset in Canton, Massachusetts. Artco’s plant was closed and the production equipment auctioned off in August. Woods Printing in Holland, Indiana acquired Oaks Printing in Evansville. Grand format specialty provider SBR/Vision Graphics in Salt Lake City has established a foothold in what may be the ultimate market for grand format services, Las Vegas, with its acquisition of commercial printing company Universal Color Graphics.

Supremex, a publicly traded Canadian company and producer of a wide variety of envelopes and similar products, announced the purchase of Bowers Envelope in Indianapolis, Indiana. This marks the second time in less than a year that Supremex has acquired a US-based envelope manufacturer (see The Target Report – October 2015).

Newspaper Publishing & Printing

The local community newspaper publishing business continues to churn as family-owned papers, many with histories that extend back to the 1800’s, struggle to survive the steady decline in readership and advertising spend devoted to local print. In Vermont, The Rutland Herald and associated papers were saved from almost certain closure by Maine entrepreneur Reade Brower, owner of MaineToday Media which publishes several papers in Maine and also the owner of Alliance Press, a related commercial printing company. In a drama that was played out in the pages of its own newspapers, the acquired company missed payrolls, bounced checks and then fired its news editor after he authorized the publication of a story questioning the company’s financial position.

In a similar, but less dramatic turn of events in Kansas, local newspaper entrepreneur Joey Young, who owns several local newspapers, swooped in and purchased the Herington Times only five days after the owners had announced to the staff that the paper was closing.

Paddock Publications, publisher of suburban Chicago paper The Daily Herald, and others, purchased five daily newspapers and seven weeklies, all serving Southern Illinois. The seller was GateHouse Media, which in turn had itself only one day earlier purchased Fayetteville Publishing, publisher of The Fayetteville Observer, the oldest surviving local newspaper in North Carolina. The purchase included the company’s headquarters building and production plant, the commercial printing division, and multiple websites.

Signature Offset, a national multi-plant printer of many newspapers, inserts and publications, headquartered in Boulder, Colorado, was sold to an unnamed investment group which immediately shut down the company’s printing plant in Las Cruces, New Mexico. The website has been rebranded ICSO, LLC and appears to still be a work-in-progress as the company rebrands.

2016 August - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1
(Surviving Entity)

Pre-Deal
Revenues
($Mil )

Party #1 Address

Deal Party #2

Pre-Deal
Revenues
($Mil )

Party #2 Address

Date
Deal
Public

Deal
Value
($Mil)

Deal Structure
(Intermediary)

Notes

Press
Releases

Firespring

No Data

Lincoln, NE

Jacob North Media Solutions
(Div. Midstates Group)

No Data

Lincoln, NE

8/30/16

No Data

Acquisition

Commercial printing

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