Wednesday, February 7, 2018

Impact XM Adds Gamification to Exhibits & Events – January 2018 M&A Activity


The acquisition of Endo Networks by AGI Partners’ portfolio company Impact XM brings interactive technology to the company’s services. These include design and production of trade show exhibits, event spaces and branded environments. The acquired company uses technology in the form of graphically-enhanced tablets, PC’s and monitors to attract (or in Endo’s term, “intercept”) attendees, engage participation through contests, gifts and coupons, and entertain with participatory games (or via what Endo calls “gamification”). The Endo technology solutions are being bolted-on to the Impact XM platform which describes itself as an “Experiential Marketing Agency” producing trade show exhibits, sponsored event environments, and shopping venues that combine bold graphics and technology to tell stories on behalf of their clients.

This is the second add-on transaction for Impact XM, backed by AGI Partners, having in July of 2017 acquired Atlantic Exhibits which specialized in trade show exhibits, museum and corporate interior design and build services. Impact XM itself was formed when AGI Partners acquired New Jersey-based Impact Unlimited in 2015 and merged it with its existing portfolio company Aura XM.

As an integrated provider of technology-based branded environments, the Impact XM platform hits all of “GAA’s four D’s of value,” the factors that we believe drive higher enterprise values in today’s market for print-centric graphic communication companies. The company’s offerings include Design, combined with Data services, are focused on retail Display output (i.e. wide format) and are produced primarily utilizing Digital printing technologies. With all four D’s combined in one platform, Impact XM looks like a home-run in the making. (For our prior thoughts on the retail display segment see The Target Report – January 2016).

Wide Format and Display Printing

Wisconsin-based Great Northern, a custom manufacturer of temporary and semi-permanent in-store displays that promote products in retail locations, has acquired United Displaycraft. The acquired company, located in Chicago, designs and manufactures metal, wire, wood and printed permanent in-store displays. United Displaycraft also brings interactive technology and digital printing to its new owner.

West-Camp Press, located in Westerville, Ohio, announced the acquisition of grand and large format printing company CSP Graphics. The acquired company, based in Cleveland, is the official preferred display graphics partner for the Cleveland Browns and the team’s stadium. The acquisition is the second for West-Camp in seven months, having last summer acquired American Colorscans in Columbus, Ohio. Originally a color separator, back when such companies still existed, American Colorscans evolved into a large format screen printer and grand format digital printer.

AlphaGraphics Seattle, a full-service commercial printer with four retail locations and a central production hub located in a stunning location on the Puget Sound right next to the Olympic Sculpture Park and a few short blocks from the Space Needle, acquired Stella Color. The acquired company specializes in wide-format printing.

Not all is rosy in wide-format printing, however. At the lower end of the market, companies serving the high-volume low-margin segments such as food and grocery are facing pricing pressure. Run quantities are being reduced as retailers close locations and strive to compete with online sellers. Windsor Marketing Group, located in north central Connecticut, filed for Chapter 11 bankruptcy in January, less than a year and half after finally completing its massive 250,000 square foot facility.

Printing Equipment 

Chester Carlson, inventor, with the first commercial 
XeroX machine, Fortune Magazine 1949
(Note the hotplate used to fuse the toner to the paper) 

Deal activity remains brisk for companies that produce equipment used in the printing and paper processing industries (see The Target Report – September 2017). Fujifilm Holdings announced the acquisition of Xerox Corporation, the venerable US-based inventor and one time world-leader in toner-based printing machines. The disappearance of Xerox as an American icon comes almost exactly one year to the date after Xerox split itself in two, spinning off the business outsourcing company it acquired in 2009. That acquisition arguably never quite fit the document-centric Xerox, and may very well be responsible for the company’s eventual failure to remain an independent force in the digital printing industry that it effectively created. In a rather convoluted transaction, Fujifilm Holdings is selling its Fuji Xerox joint venture to Xerox, then acquiring a controlling interest in the newly combined entity, after which it will be renamed Fuji Xerox. 

Muller Martini, based in Switzerland, announced the acquisition of the perfect binding and related bookbinding machinery business of longtime rival Germany-based Kolbus. The business taken over by Muller Martini will remain in the same town as Kolbus, with all engineering talent and other employees to be located in a separate plant from their former colleagues. Kolbus will retain its case-binding and packaging equipment business, as well as its foundry operation that dates back to 1775.

Bell and Howell, a portfolio company of private equity fund Versa Capital Management, strengthened its position in the mail processing industry with the acquisition of Gunther International. The acquired company manufactures high-volume, high-page-count intelligent mail inserters with software designed to guarantee integrity of the processed mail.


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

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


Party #1 Address


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


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

Deal Structure
(Intermediary)


Notes

Press
Release
Xitron No Data Ann Arbor, MI RTI-RIP.com
(Div. Global Graphics Software)
No Data Cambridge, UK 1/31/18 No Data Acquisition Print imaging software Link
Wheeling Newspapers
(Affil. Ogden Newspapers)
No Data Wheeling, WV Charleston Gazette-Mail
(Prop. The Daily Gazette Co.)
No Data Charleston, WV 1/31/18 $11.3 363 Sale in Ch. 11 Local Newspaper Link
Fujifilm Holdings $50,610 Tokyo, Japan Xerox $10,260 Norwalk, CT 1/31/18 $6,100 Acquisition Digital printing equipment Link
DemandBridge No Data Norcross, GA Kramer-Smilko No Data Bel Air, MD 1/30/18 No Data Acquisition
(Corp Dev Assoc)
Print distributor software Link
Minuteman Press Encinitas No Data Encinitas, CA Minuteman Press Sorrento Valley No Data Sorrento Valley, CA 1/29/18 No Data Acquisition Printing & copying Link
GateHouse Media
(Div. New Media Investment)
$1,280 Pittsford, NY Eugene Register-Guard
(Prop. RG Media Company)
No Data Eugene, OR 1/29/18 No Data Acquisition
(Dirks, Van Essen)
Metro newspaper Link
Muller Martini No Data Zofingen, Switzerland Bookbinding business
(Div. Kolbus)
No Data Rahden, Germany 1/29/18 No Data Acquisition Bookbinding equipment Link
WestRock $15,310 Norcross, GA KapStone Paper & Packaging $3,230 Northbrook, IL 1/29/18 $4,900 Acquisition Kraft & corrugated products Link
AlphaGraphics Seattle No Data Seattle, WA Stella Color No Data Seattle, WA 1/29/18 No Data Acquisition Wide format printing Link
Impact XM
(Port co. AGI Partners)
No Data Dayton, NJ Endo Networks No Data Oakville, ON 1/23/18 No Data Acquisition Interactive displays Link
Sun Chemical
(Div. Dainippon Ink & Chemicals)
$7,500 Parsippany, NJ C.T.LAY No Data Modena, Italy 1/22/18 No Data Acquisition Security overlays Link
Drummond Press No Data Jacksonville, FL Sunbelt Printing No Data Marietta, GA 1/15/18 No Data Acquisition Commercial printing Link
ProAmpac
(Port co. Pritzker Group)
No Data Cincinnati, OH Bonita Pioneer Packaging Products No Data Portland, OR 1/9/18 No Data Acquisition Bags & folding cartons Link
West-Camp Press No Data Westerville, OH CSP Graphics No Data Cleveland, OH 1/8/18 No Data Acquisition Display graphics Link
Midland Paper / Mngt. Team No Data Wheeling, IL Midland Paper $1,000 Wheeling, IL 1/5/18 No Data Mngt. Buyout Paper distribution Link
Bell and Howell
(Port Co. Versa Capital Mngt.)
No Data Research Triangle Park, NC Gunther International No Data Norwich, CT 1/4/18 No Data Acquisition Mail inserters Link
Essence Ventures No Data New York, NY Essence Magazine
(Prop Time, Inc.)
No Data New York, NY 1/3/18 No Data Acquisition Magazine publishing Link
H.I.G. Capital No Data Miami, FL Digital Room
(Port co. Insight Ventures)
No Data Van Nuys, CA 1/3/18 No Data Acquisition Ecommerce printing sites Link
Great Northern No Data Appleton, WI United Displaycraft No Data Des Plaines, IL 1/2/18 No Data Acquisition Retail display Link


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



Filing Party

Date
Case
Filed
Pre-Petition
Revenues
($Mil )



Case #



Filing Party Address



Circuit



Region & City



Judge



Attorney for Debtor



Notes
Chapter 11 Filings:
Daily Gazetter Company 1/30/18 No Data 18-20028 Charleston, WV 4th Southern WV
Charleston
Frank W. Volk Joe. M. Supple Local newspaper
Unified Graphics & Signs, LLC 1/17/18 No Data 18-40196 Fort Worth, TX 5th Northern TX
Fort Worth
Mark X. Mullin H Joseph Acosta  Screen printing
Penthouse Global Media, Inc. 1/11/18 No Data 18-10098 Los Angeles, CA 9th Central CA
Woodland Hills
Martin R. Barash Michael H Weiss  Magazine publisher
Windsor Marketing Group, Inc. 1/8/18 No Data 18-20022 Suffield, CT  2nd Connecticut
Hartford
James J. Tancredi James Berman  Retail display
Conlon Press, Incorporated 1/4/18 No Data 18-40030 Bellingham, WA 9th Northern CA
Oakland
William J. Lafferty John H. Carmichael  Art prints
The Current Newspapers, Inc. 1/3/18 No Data 18-00006 Washington, DC 4th District of Columbia S. Martin Teel, Jr. Philip McNutt  Local newspaper
Chapter 7 Filings:
Digital Ink Inc 1/5/18 No Data 18-30056 Richmond, VA 4th Eastern VA
Richmond
Kevin R. Huennekens W. Scott Dillard, II  Water-based inks


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



Closed Company / Facility

Date of Closure
Pre-Closure
Revenues
($Mil )



Closing Address
Related Party Related Party
Address
Date Closure Public


Notes

Press
Releases
Montague-Spragens Printers & Lithographers 2/13/18 No Data Redding, CA None N/A 2/13/17 Commercial Printing Link

Sunday, January 7, 2018

Will the Real Crane Please Stand Up?


Crane Currency, the venerable manufacturer of specialty papers used to print paper currencies for more than 50 countries around the globe, is being acquired by Crane Co., the global engineered technology and manufacturing company most commonly known for the ubiquitous bathroom fixtures found in millions of homes, office and factories. Despite the proximity of the two companies (Crane Currency is headquartered in Dalton, Massachusetts and Crane Co. has its home in Stamford, Connecticut), the two companies have, until now, had absolutely nothing in common, except the name. That changes when the former toilet manufacturing company plunks down $800 million to acquire the high-tech paper company that boasts an 18.8% EBITDA of $94 million. This represents a very respectable purchase price in the papermaking business, an industry that is often the subject of bankruptcies and plant closings. The price paid by Crane Co. is 8.5 times EBITDA and 1.6 times Crane Currency’s estimated revenues of approximately $500 million.

Crane Currency, originally named Crane & Co., got its start in 1770, when Stephen Crane established The Liberty Paper Mill, aptly named as he sold some of his first cotton-based papers to Paul Revere. In addition to his famous midnight ride, Paul Revere also printed the American Colonies’ first paper money, on Crane’s paper. In 1844 a descendant of the original Crane developed a method of embedding silk threads in banknote paper as a deterrent to counterfeiting, further establishing the writing paper manufacturer
 as a source of paper stock for printing paper money. The real turning point came when a scion of the Crane family traveled to Washington, DC in 1879 and won the contract to provide the paper for the new single system of money. As the demand for writing papers declined, another opportunity arose when the country of Sweden decided in 2001 to outsource its currency production. Once again a Crane family member rose to the occasion and landed the contract, which began the company’s global expansion and successful quest for the new anti-counterfeiting measures now used in the new US bills and around the world.

So then, you might ask, exactly who now makes Crane’s Bond, the 100% cotton fiber paper that I have so lovingly used for thirty-plus years as my personal stationery stock (Ivory, Wove). The correct answer would not be the industrial conglomerate Crane Co., nor would it be the recently acquired Crane Currency, maker of money paper, nor would it be Crane & Co., the stationery printing company spun out as a 
freestanding employee-owned company in 2015. The maker of Crane Paper is now Neenah Paper, a fine printing paper manufacturer that originated in the papermaking mecca of Neenah, Wisconsin, now headquartered in Alpharetta, Georgia. Neenah Paper acquired the manufacturing rights to the Crane brands in 2009. In 2014, in its own effort to diversify its portfolio away from reliance on the commercial printing industry, Neenah Paper acquired none other than Crane & Co.’s technical materials division that specialized in making papers used in filtration applications. Of course, at that time, Crane Currency was just called Crane & Co., since the stationery division had not yet been jettisoned along with the name “Crane Stationery” and apparently also with the rights to use the name “Crane & Co.” Got that?

The acquiring company in the story, Crane Co., was a relative latecomer to the American industrial scene, getting its start in 1855 when Richard T. Crane founded a brass and bell foundry in Chicago, eventually specializing in valves, fittings, and specialty metal castings. The company used its metal casting expertise to develop and manufacture many types of highly engineered products such as valves for steam engines for railroads, steam heating systems, and elevators. Eventually the company began to produce the modern bathroom fixtures that first became popular in the 1920’s. As Crane Co. morphed into a high-tech engineered products company, it manufactured products used in aviation, fluid systems, process controls and space exploration (Crane Co. valves are on the moon). In 1990, as the company began to strategically focus on highly-engineered products, the bathroom fixtures division was sold off to American Standard. Regarding the printing industry, the history of Crane Co. is devoid of any reference to papermaking, except that the company’s pipes and valves, its original product, were most likely used in Crane & Co.’s paper mills (and lavatory facilities as well, we suppose).

It’s known that whooping cranes are one of the few birds that, once paired, are monogamous and mate for the remainder of their lives. Maybe the two Crane companies will from this time and henceforth have a common history.

Commercial Printing and Diversified Services

In a blockbuster odd-couple deal, ModusLink Global Solutions announced the acquisition of direct mail industry-leader IWCO Direct. ModusLink is the successor company to former dot-com darling and dot-com-bust poster child CMGI, and as a result is now the holder of in excess of $2 billion of net operating loss carryforwards. Through a series of acquisitions, ModusLink now operates a money-losing supply-chain fulfillment and logistics business with TTM revenues of $417.8 million as of October, losing $22.5 million with a negative $3.8 million EBITDA in the same period. IWCO Direct, with very similar revenues of $470.6 million, reported net income of $18.9 million and $82.2 million EBITDA (17.5%). The price paid for IWCO Direct, $476 million, was slightly over one-time revenues, and represents a multiple of 5.8 times EBITDA. ModusLink is controlled by Steel Partners Holdings, and has stated their intention to grow IWCO Direct through acquisitions in data and agency services. Those acquisitions will have to be significant to move the needle on this ship and take advantage of the $2 billion loss carryforwards!

In rapid-fire sequence, OSG Billing Services has announced its second acquisition in the transactional printing segment. OSG Billing Services, owned by Aquiline Capital and now with an expanded $231 million credit facility from Monroe Capital, has acquired Diamond Communication Solutions. This comes less than two months after OSG acquired MicroDynamics from Wafra Partners, and only six months after Aquiline itself had acquired OSG as its platform in the statement printing and e-presentment segment. (For more on our projection that M&A activity will pick up in this segment see Transactional Print: Fertile Ground for Consolidation, The Target Report – October 2014).

Packaging

Activity remains robust in the packaging segments. Fort Dearborn, portfolio company of Advent International, announced the acquisition of NCL Graphic Specialties in Waukesha, Wisconsin. NCL prints cut & stack labels, promotional printing and flexible packaging. The acquisition adds two additional production facilities to Fort Dearborn’s fifteen existing production plants.

ID Images, located in Brunswick, Ohio, announced the acquisition of label and flexible packaging printer Ready Flow Printing. The acquired company, based in Rogers, Arkansas, is the seventh deal for ID images, a diversified label and forms printer selling exclusively through distributor channels. Steven Label, based in Santa Fe Springs, California, acquired Robinson Printing based in nearby Temecula. Robinson has evolved from a general commercial printing company into a specialist printing company primarily serving the pharmaceutical industry with information inserts and packaging.

WestRock, the paperboard, Kraft paper, corrugated manufacturing and packaging printing giant, acquired Plymouth Packaging. The majority of Plymouth’s revenue derives from its “Box on Demand” systems which are machines installed onsite at e-commerce companies and other customers that require corrugated box production in quantities as low as one. The systems pull standard corrugated stock, which is fan-folded on large skids, into a computer-driven machine that will accurately cut and fold boxes of any size that is needed. Used in factories that ship a variety of products in very small quantities as ordered, the system is ideal for e-commerce retailers with a multitude of orders shipped in an on-demand ordering environment. WestRock currently provides one-third of the 60,000 tons of containerboard used by Plymouth annually and presumably will fulfill the balance post-transaction.



2017 December - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries  

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


Party #1 Address


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


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

Deal Structure
(Intermediary)


Notes

Press
Release
Mondi Group $11,249 Addlestone, UK Powerflute Group Holdings
(Div. Nordic Packaging)
No Data Kuopio, Finland 12/22/17 $433.3 Acquisition Corrugated materials Link
Mark Ein No Data Washington DC Washington City Paper
(Prop. SouthComm)
No Data Washington DC 12/21/17 No Data Acquisition Local newspaper Link
ID Images No Data Brunswick, OH Ready Flow Printing No Data Rogers, AR 12/21/17 No Data Acquisition Label & flexo printing Link
Steven Label No Data Santa Fe Springs, CA Robinson Printing No Data Temecula, CA 12/21/17 No Data Acquisition Pharma inserts & packaging Link
Great Northern No Data Appleton, WI United Displaycraft No Data Des Plaines, IL 12/20/17 No Data Acquisition Retail display Link
Data Papers No Data Muncy, PA DocuSource No Data Morrisville, NC 12/18/17 No Data Acquisition Digital printing Link
ModusLink Global Solutions
(Port co. Steel Partners)
$417.8 Waltham, MA  IWCO Direct $470.6 Chanhassen, MN 12/18/17 $476.0 Acquisition Direct mail printing Link
Hodgins Engraving No Data Batavia, NY Impact Printing & Engraving No Data Garfield, NJ 12/14/17 No Data Acquisition Stationery printing Link
Mixbook No Data Redwood City, CA WedPics No Data Raleigh, NC 12/13/17 No Data Acquisition Photo books Link
Fort Dearborn
(Port co. Advent International)
$478.1 Elk Grove, IL NCL Graphic Specialties No Data Waukesha, WI 12/13/17 No Data Acquisition Labels & flexible packaging Link
Groupe Lexis M├ędia No Data St-Bruno-de-Montarville, QC Portfolio of 12 Titles
(Prop. Transcontinental)
No Data Montreal, QC 12/12/17 No Data Acquisition Community newspapers Link
The Sourcing Group $58.0 New York, NY SI Solutions $17.0 Florence, SC 12/12/17 No Data Acquisition Print distributor Link
WestRock $14,860 Norcross, GA Plymouth Packaging No Data Plymouth, MI 12/12/17 No Data Acquisition Corrugated boxes Link
Wallace Graphics No Data Stone Mountain, GA MegaBytes Digital No Data Alpharetta, GA 12/12/17 No Data Acquisition Wide format printing Link
OSG Billing Services
(Port co. Aquiline Capital)
No Data Ridgefield Park, NJ Diamond Communication Solutions No Data Carol Stream, IL 12/11/17 No Data Acquisition Transactional printing Link
GateHouse Media
(Div. New Media Investment)
$1,280 Pittsford, NY Boston Herald No Data Boston, MA 12/8/17 No Data 363 Sale in Ch. 11 Metro newspaper Link
Baldwin Technology
(Port co. BW Forsyth Capital)
$117.5 St. Louis, MO QuadTech
(Div. Quad/Graphics)
No Data
($4,170)
Sussex, WI 12/8/17 No Data Acquisition Print control systems Link
Optel Vision No Data Quebec, QC Verify Brand
(Affil. Meyers)
No Data Minneapolis, MN 12/7/17 No Data Acquisition Anti-counterfeit technology Link
Sappi $5,300 Johannesburg, South Africa Cham Paper Group $216.5 Cham, Switzerland 12/5/17 $149.0 Acquisition Specialty papers Link
Crane Co. $2,750 Stamford, CT Crane & Co (Crane Currency)
(Port co. Lindsay Goldberg)
$500.0 Boston, MA 12/5/17 $800.0 Acquisition Specialty papers Link
T&K Toka $428.7 Saitama, Japan Van Son Inks No Data Hilversum,
Netherlands
12/4/17 $6.0 Acquisition Offset inks Link
Flint Group
(Port co. Goldman Sachs/Koch)
$2,900 Luxembourg Eston Chimica No Data Padova, Italy 12/1/17 No Data Acquisition Flexo & gravure inks Link


2017 December - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party

Date
Case
Filed
Pre-Petition
Revenues
($Mil )



Case #



Filing Party Address



Circuit



Region & City



Judge



Attorney for Debtor



Notes
Chapter 11 Filings:
Herald Media Holdings, Inc. 12/8/17 No Data 17-12881 Boston, MA 3rd Delaware
Wilmington
Laurie Selber Silverstein Tristan G. Axelrod  Newspaper publisher
Chapter 7 Filings:
Parrot Press Inc 12/19/17 No Data 17-12417 Fort Wayne, IN 7th Northern IN
Fort Wayne
Robert E. Grant Scot T. Skekloff  Commercial printing
Walton Press, II, Inc. 12/13/17 No Data 17-35089 Elmwood Park, NJ 3rd New Jersey
Newark
Stacey L. Meisel Bruce H Levitt  Commercial printing
Champion Printing and Copying LLC 12/12/17 No Data 17-11543 Austin, TX 5th Western TX
Austin
Tony M. Davis Elizabeth Hickson  Printing & copying
Knight Mail & Printing Plus LLC 12/5/17 No Data 17-81358 Henryetta, OK 10th Eastern OK
Okmulgee
Tom R. Cornish Melinda G. Dunlap  Printing & copying


2017 December - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries



Closed Company / Facility

Date of Closure
Pre-Closure
Revenues
($Mil )



Closing Address
Related Party Related Party
Address
Date Closure Public


Notes

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