Thursday, March 7, 2019

Platinum Equity Likes Print – February 2019 M&A Activity


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

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

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

A Roll-up of Roll-ups

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



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



Investing in Print

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



Commercial Printing and Diversified Services

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

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



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

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


Party #1 Address


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


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

Deal Structure
(Intermediary)


Notes

Press
Release
EP Graphics No Data Berne, IN McCormick Armstrong No Data Wichita, KS 2/28/19 No Data Closure & Tuck-in Commercial printing Link
Platinum Equity No Data Los Angeles, CA Multi-Color Corporation $1,740 Cincinnati, OH 2/25/19 $2,500 Acquisition
(Goldman Sachs)
Label printing Link
AutoMate Label Solutions No Data Houston, TX Diverse Label Printing No Data Burlington, NC 2/18/19 No Data 363 Sale in Ch. 11 Label printing Link
PDF Print Communications No Data Signal Hill, CA Orion Press No Data Phoenix, AZ 2/12/19 No Data Acquisition
(Corp Dev Assoc)
Forms printing Link
Greif $3,870 Delaware, OH Caraustar Industries
(Port co. H.I.G. Capital)
No Data Austell, GA 2/11/19 No Data Acquisition Recycled paperboard mfg. Link
ComGraphics ESOP No Data Chicago, IL ComGraphics No Data Chicago, IL 2/9/19 No Data Sale to ESOP
(Prairie Capital)
Transactional printing Link
Royal Business Forms Mngt No Data Brooklyn Park, MN Royal Business Forms No Data Brooklyn Park, MN 2/5/19 No Data Mngt. Buyout Forms & label printing Link
PPC Flexible Packaging
(Port co Morgan Stanley Capital)
No Data Buffalo Grove, IL HFM Packaging No Data Pewaukee, WI 2/5/19 No Data Acquisition
(TKO Miller)
Flexible Packaging Link


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



Filing Party

Date
Case
Filed
Pre-Petition
Revenues
($Mil )



Case #



Filing Party Address



Circuit



Region & City



Judge



Attorney for Debtor



Notes
Chapter 11 Filings:
Print Plus Corporation 2/15/19 No Data 19-00797 Ponce, PR 1st Puerto Rico
Ponce
Edward A Godoy Noemi
Landrau Rivera
Printing & copying
CityView Publishing, LLC 2/9/19 No Data 19-00586 Wilson, NC 4th Eastern NC
Raleigh
David M. Warren  John G. Rhyne  Magazine publishing
Chapter 7 Filings:
Lingraph Packaging Services Company 2/15/19 No Data 19-04113 Glendale Heights, IL 7th Northern IL
Chicago
Janet S. Baer Joshua D. Greene  Commercial printing


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



Closed Company / Facility

Date of Closure
Pre-Closure
Revenues
($Mil )



Closing Address
Related Party Related Party
Address
Date Closure Public


Notes

Press
Releases
Bertek  Label & Card Solutions 2/25/29 No Data Milton, VT Identification Multi Solutions Montreal, QC 2/25/29 Label and card printing Link
Turley Publications 4/1/19 No Data Palmer, MA None N/A Feb-19 Community newspapers & commercial print Link
McCormick Armstrong 2/21/19 $11.5 Wichita, KS None N/A 2/21/19 Commercial printing Link

Thursday, February 7, 2019

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


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

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

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

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

Commercial Printing and Diversified Services

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

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

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

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

Packaging

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

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

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

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


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


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

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


Party #1 Address


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


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

Deal Structure
(Intermediary)


Notes

Press
Release
Product Identification Co No Data Wayne, NJ HC Graphics Screen Printing No Data Paterson, NJ 1/28/19 No Data Acquisition Point of purchase displays Link
BCC Software
(Port co. Thompson Street Capital)
No Data Rochester, NY Satori Software
(Div. Quadient/Neopost)
No Data Seattle, WA 1/28/19 No Data Acquisition Mail processing software Link
BindTech
(Port co. Signet)
No Data Nashville, TN Sheridan Specialty Bindery
(Div. CJK Group)
No Data Church Hill, TN 1/25/19 No Data Acquisition Bookbinding Link
McClung Companies No Data Waynesboro, VA Commonwealth Mailing Systems No Data Richmond, VA 1/17/19 No Data Acquisition
(Graphic Arts Advisors)
Mailing services Link
Sandy Alexander No Data Clifton, NJ Signmasters No Data Passaic Park, NJ 1/16/19 No Data Acquisition Retail in-store signage Link
TSC Auto ID Technology No Data New Taipei City, Taiwan Diversified Labeling Solutions No Data Itasca, IL 1/11/19 No Data Acquisition Trade label printer Link
Didit No Data Melville, NY Print Digital Plus No Data Ronkonkoma, NY 1/10/19 No Data Acquisition Digital printing Link
TricorBraun
(Port co. AEA Investors)
No Data St. Louis, MO Pacific Bag No Data Woodinville, WA  1/8/19 No Data Acquisition Flexible packaging Link
Long Falls Paperboard No Data Starbuck, WA Paperboard plant
(Div. Neenah Paper)
No Data Brattleboro, VT 1/7/19 No Data Acquisition Paperboard mill Link
Rengel Printing No Data St. Cloud, MN Continental Press No Data St. Cloud, MN 1/4/19 No Data Acquisition
(Graphic Arts Advisors)
Commercial printing Link
PremierIMS No Data Houston, TX Absolute Color No Data Houston, TX 1/3/19 No Data Merger Trade commercial printing Link
Midland Paper $920.0 Wheeling, IL CohereOne No Data San Rafael, CA 1/3/19 No Data Acquisition Print & marketing services Link
Oliver Printing & Packaging
(Port co. Pfingsten Partners)
No Data Twinsburg, OH DISC Graphics No Data Hauppauge, NY 1/3/19 No Data Acquisition
(Mesirow)
Folding cartons Link
Sign-Zone
(Port co. Pfingsten Partners)
No Data Brooklyn Center, MN Xarisma No Data Huntsville, AL 1/2/19 No Data Acquisition Large format fabric signage Link
Chartpack No Data Leeds, MA Borden & Riley Paper Company No Data Hollis, NY 1/2/19 No Data Acquisition Fine art papers Link
Fortis Solutions Group
(Port co. Main Post Partners)
No Data Virginia Beach, VA Infinite Packaging
(Port co. Svoboda Capital)
No Data Lewisville, TX 1/2/19 No Data Acquisition Label printing Link


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



Filing Party

Date
Case
Filed
Pre-Petition
Revenues
($Mil )



Case #



Filing Party Address



Circuit



Region & City



Judge



Attorney for Debtor



Notes
Chapter 11 Filings:
Western Communications 1/22/19 No Data 19-30223 Bend, OR 9th Oregon
Portland
Trish M. Brown Michael W. Fletcher Newspaper publisher
Chapter 7 Filings:
Studiocolor 1/20/19 No Data 19-01643 Bensenville, IL 7th Northern IL
Chicago
Janet S. Baer William D. Cherny Commercial printing


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



Closed Company / Facility

Date of Closure
Pre-Closure
Revenues
($Mil )



Closing Address
Related Party Related Party
Address
Date Closure Public


Notes

Press
Releases
ITW Labels 3/31/19 No Data San Jose, CA ITW Labels Bogart, GA Jan-19 Label printing Link
Carvell Printing 3/6/19 No Data Sacramento, CA None N/A Jan-19 Commercial printing Link
Royal Printing 3/13/19 No Data Guilford, CT None N/A Jan-19 Commercial printing Link
Henry Wurst 3/19/19 No Data North Kansas City, MO Mittera Des Moines, IA Jan-19 Commercial printing Link
Marcal Paper
(Div. Soundview Paper Co.)
1/30/19 No Data Elmwood Park, NJ None N/A 1/30/19 Paper products Link
LSC Communications - Printing plant 6/30/19 No Data Lynchburg, VA LSC Communications Chicago, IL 1/23/19 Publication printing Link
Paper & pulping operations Mar-18 No Data Pot Hudson, LA Georgia-Pacific
(Div. Koch Industries)
Atlanta, GA 1/10/19 G-P exiting communications papers business Link