Sunday, March 8, 2015

Who Says Books Aren’t Pretty? – February 2015 M&A Activity













Books were ascendant in the printing deal space as RR Donnelley swooped down and snatched Courier Corporation right out of the arms of Courier’s suitor of choice, Quad/Graphics. Almost two and half times larger than Quad, RRD was not about to let this opportunity escape as it did last year when Quad acquired Brown Printing in a sweetheart of a deal. You can imagine the command issued from RRD’s executive suite, “do not let this one get away!” When the dust settled, RRD offered to assume all the debt of the bride-to-be, worth an additional $40 million more than Quad’s offer. Once spurned, Quad reportedly did not fight back.

With sales of $228 million, Courier represents an increase of only 2% in revenues for RRD, but as the traditional segments of the industry consolidate, there are fewer acquisition candidates that can move the needle for the largest players. In addition to traditional book printing, Courier brings other assets to the RRD family, including digital printing capabilities and on-demand solutions that extend the economic lifecycle of published titles. With its Dover and REA publishing brands, Courier owns over 10,000 titles, serving religious, trade and educational markets. The bride is not only pretty, she has intellectual content.

Since the engagement agreement with Quad included a break-up clause, the company did not go away without some reward for its trouble – RRD will be paying Quad the $10 million pre-nuptial fee that Courier owes for walking away from the alter. In any event, Quad recovered its composure quickly and picked up Paris-based Marin’s International, a global player in retail display.

More about Books

Recently rebranded commercial printer, Ironmark (née Frank Gumpert Printing) acquired United Book Press in nearby Woodlawn, Maryland. The acquired company will be maintained as a separate book printing division, adding $13 million in revenue to Ironmark’s $22 million.

Harman Press, a North Hollywood, California printer that touts its unionized work force to pitch entertainment and political clients, acquired A&I Photographic and Digital. The acquired company has evolved from a specialized photo processor to printer of fashion and entertainment portfolios and digital books.

Bookseller Family Christian, LLC filed for Chapter 11 bankruptcy, planning to sell itself in a 363 sale. A new subsidiary of its parent non-profit organization is the lead bidder acting as the stalking horse in the court supervised sales process. The company plans to maintain all 266 stores operating in 36 states with over 4,000 employees.

Commercial Printing & Copying

Staples announced its planned merger with Office Depot which itself recently acquired OfficeMax. The companies offer printing and copying services, both in-store and online. With their printing service offerings, the giant companies compete with thousands of small quick printers, all vying to capture the same walk-in print and copy business. As Staples continues to close stores and drive its customers to purchase office supplies online, its ability to successfully compete for copy business remains unclear.

At the opposite end of the size spectrum from Staples, KM Media Group, a collection of acquired companies competing in the general commercial segment, acquired One Source Solutions. One Source Solutions, formerly a Sir Speedy Printing franchise, will close its Newark, New Jersey location and tuck its business into KM’s Clifton, New Jersey location.

Commercial printer Allied Group in Cranston, Rhode Island acquired DES Printing. Allied has used a steady acquisition strategy, completing seven deals since 2000, to grow its business to $20 million revenue.

In Carlstadt, New Jersey, Pictorial Offset announced that it was closing after 78 years. At one time a formidable competitor in the market for high-end commercial printing, Pictorial has been unable to fully recover since the plant was flooded in 2012’s Superstorm Sandy. In a picture complicated by claims against the printer’s insurance company, the company was further challenged when its lender filed suit in December in an effort to collect an outstanding line of credit.

Paper

Private Equity firm Lindsay Goldberg created and funded Crown Paper Group as a holding company to acquire Port Townsend Holdings Company. The transaction included the Port Townsend Paper mill in Port Townsend, Washington, the Crown Packaging and Boxmaster plants in Vancouver, British Columbia, as well as two Canadian distribution centers. The Port Townsend mill produces Kraft and containerboard grades used in the company’s packaging plants.

The roll-up in the printing papers distribution segment continues. In its eighth acquisition of a regional paper merchant since 2010, Central National-Gottesman acquired Spicers Canada. Formerly owned by an Australian company, Spicers has 15 distribution and sheeting facilities throughout Canada.

Flexible Packaging

Popular Ink, a flexible packaging printer in McKinney, Texas was acquired by Dallas-based private equity firm Highlander Partners. The two founders are retaining a portion of equity in the company and will be working with the new owners to grow the company; presumably able to take a “second bite of the apple” when the company reaches the next stage in its development.


2015 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
Releases
Apex Machine No Data Fort Lauderdale, FL Desco Equipment Corp. No Data Twinsburg, OH 2/20/15 No Data Acquisition Printing equipment Link
Crown Paper Group No Data Atlanta, GA Townsend Holdings Co No Data Vancouver, BC 2/18/15 No Data Acquisition Paper mill & packaging mfg. Link
Harman Press No Data N. Hollywood, CA A&I Photographic & Digital No Data Burbank, CA 2/18/15 No Data Acquisition Fine-art photobooks & prints Link
Signature Card No Data Richardson, TX Performance Card Solutions
(Div. Performance Companies)
No Data Dallas, TX 2/16/15 No Data Acquisition Plastic card printing Link
Quad/Graphics $4,860 Sussex, WI Marin's International No Data Paris, France 2/12/15 No Data Acquisition Retail display Link
Ironmark $22.0 Annapolis Junction,
MD
United Book Press $13.0 Woodlawn, MD 2/12/15 No Data Acquisition Book manufacturing Link
KM Media Group No Data Clifton, NJ One Source Solutions No Data Newark, NJ 2/11/15 No Data Acquisition
(Epicomm)
Printing & copying Link
Circle Graphics No Data Longmont, CO Art Division of CafePress No Data Raleigh, NC 2/11/15 No Data Acquisition Grand & wide format printing Link
Central National-Gottesman No Data Purchase, NY Spicers Canada No Data Vaughan, ON 2/10/15 No Data Acquisition Paper distribution Link
Allied Group No Data Cranston, RI DES Printing No Data Provident, RI 2/10/15 No Data Acquisition
(New Direction)
Commercial printing Link
Highlander Partners No Data Dallas, TX Popular Ink No Data McKinney, TX 2/5/15 No Data Acquisition
(New Direction)
Flexible packaging Link
RR Donnelley $11,600 Chicago, IL Courier Corp $227.5 N. Chelmsford, MA 2/5/15 $300.0 Acquisition Book printing & content mngt. Link
Staples $22,710 Framingham, MA Office Depot $16,100 Boca Raton, FL 2/4/15 $6,300 Merger
(Barclays)
Office supplies, printing Link
Valid USA
(Sub. Valid, Brazil)
R$ 1,175 Lisle, IL Card Cells No Data St. Paul, MN 2/2/15 No Data Acquisition Secure ID & payment cards Link


2015 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:
Technology Container Corp 2/25/15 No Data 15-40339 Worcester, MA 1st Massachusetts
Worchester
Melvin S. Hoffman David M. Nickless Generic corrugated boxes
North Toledo Graphics, LLC 2/13/15 No Data 15-30343 Toledo, OH 6th Northern OH
Toledo
John P. Gustafson Michael E. Baum Commercial printing
Family Christian, LLC 2/11/15 No Data 15-00643 Grand Rapids, MI 6th Western MI
Grand Rapids
John T. Gregg A. Todd Almassian Bookstores
Chapter 7 Filings:
CDI Media Group Corporation 2/19/15 No Data 15-12490 Los Angeles, CA 9th Central CA
Los Angeles
Vincent P. Zurzolo D. Justin Harelik Printing (and media replication)


2015 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
Pictorial Offset Feb-15 Carlstadt, NJ None N/A 2/13/15 Commercial printing Link
RR Donnelley  - Printing Facility May-15 No Data Nashville, TN RR Donnelley Chicago, IL 2/10/15 Formerly Moore Wallace facility Link

Saturday, February 7, 2015

The End of the Line for MeadWestvaco – January 2015 M&A Activity


Paper and packaging industry giant MeadWestvaco appears to be at the end of its life as an independent entity. The company agreed to a merger with RockTenn to form a yet-to-be-named successor company. RockTenn’s expertise in kraft paper, corrugated cartons and retail displays will combine with MeadWestvaco’s strengths in paperboard and folding cartons. The result will be a powerful player in the increasingly global packaging industry, with over $15 billion in annual revenues.

In apparent preparation for the deal with RockTenn, earlier in the month MeadWestvaco announced the spinoff of its chemical business into a separate public company. Only four days before the merger with RockTenn was announced, MeadWestvaco sold it European tobacco and confectionary folding carton packaging units to Sweden-based AR Packaging Group. That deal has the appearance of a fire-sale in today’s hot market for packaging-related acquisitions, selling at only 3.9 times trailing EBITDA, less than 50% of revenues.

MeadWestvaco itself was born in 2002 from the combination of Westvaco, a descendant of the West Virginia Pulp and Paper Company, and The Mead Corporation, founded in 1846 by Colonel Daniel Mead to produce book papers in Dayton, Ohio. Prior to their merger, these two companies produced some of the workhorse papers of the commercial printing industry, Sterling from Westvaco and Mead Offset Enamel (or as we used to call it, simply “EmOhEee”). IN 2005, MeadWestvaco sold off its printing papers unit to Cerberus Capital Management to form NewPage, which itself ceased to exist earlier this month with the completion of its sale to Verso.

Packaging & Labels

Multi-Color Corporation, a frequent entry on the buy-side in our deal logs, was back again with its acquisition of a relatively small ($15 million revenue) producer of premium wine and spirit labels in Daventry, UK. In an apparently prescient branding decision, the target company is named Multi Labels.

The Wendell Group in Paris, France picked up nine North American locations with its acquisition of Vienna, Austria-based Constantia Flexibles. The price paid was consistent with the higher multiples being reported for packaging companies in the flexible packaging space, reported at 9.9 times EBITDA, or 140% of trailing revenue.

Glenroy, a producer of raw and printed films for flexible packaging located in Menomonee Falls, Wisconsin, and itself a manufacturing of flexible pouches, acquired PF Flexibles in Hartford, Wisconsin, strengthening its positon in the flexible packaging segment. HP Mile, Syracuse, New York-based specialist printer of labels for regulated healthcare markets, picked up Lauraville Packaging which has expertise in printing multi-page encapsulated expanded content labels.

In corrugated packaging and display, JV Kraft Group and Schwarz Partner formed a joint-venture, New-Indy JV, as a platform to acquire Carolina Container in High Point, North Carolina. Menasha Packaging expanded its footprint into Canada by acquiring PearceWellwood, retail display provider in Brampton, Ontario.

Marketing Technology

As many newspaper publishers struggle with declining circulation and ad revenues, some are redefining what it means to be the local and regional nexus for news and marketing. A.H. Belo, known for its ownership of The Dallas Morning News and The Denton Record-Chronicle, both in Texas, has been branching out with its DMNmedia division, provider of marketing solutions, including digital, print, mobile, direct marketing, social media, research and creative services, promotions and events. A.H. Belo acquired three related companies, Distribion,Vertical Nerve and Marketing FX in a deal valued at $15.3 million. The acquired companies specialize in local marketing automation, search engine marketing, direct mail and promotional products. Based on the averages reported for the acquired companies, the price paid was 14.6 times projected EBITDA, or 153% of forward revenues.

Specialty

Ennis, another frequent entrant in our deal logs, notable for its focus on acquiring companies that print products, rather than companies that print jobs, was back at it again with its acquisition of Kay Toledo Tag, producer of tags, labels and tickets.

J.N. White Designs, printer of industrial products in Perry, New York, acquired the graphic overlay and membrane printing business of Dawar Technologies. The company’s products include screen printed labels, decals, nameplates, graphic overlays and high-tech user interface control panel assemblies.

DG3, the global printing company with long established outposts in the UK and Hong Kong, acquired Digital Publishing Solutions, a document management and automated publishing technology company with expertise in filing requirements for financial services companies.

Commercial Printing & Marketing Service Providers (aka MSP’s)

Transaction activity picked up in the commercial segment, after several relatively quiet months. However, the one major deal of the month, Quad/Graphics’ acquisition of Courier Corp. was squashed when RR Donnelly decided it would not let this one get away. RRD swooped in with an offer that Courier could not refuse. (More on that deal next month.)

Midstate Printing and Quartier Printing, both of Syracuse, New York, decided to join forces in a deal promoted as a merger. Several other commercial printers announced acquisitions, including Peczuh Printing in Price, Utah; Seaboard Graphics in Liverpool, New York; and Arrowhead Printing in Superior, Wisconsin.

After many quiet months in which it there were few or no bankruptcies in the printing and related industries, several small commercial printing companies filed in January, all seeking to liquidate in Chapter 7.

Publications & Newspapers

Adams Publishing Group continued its acquisitive bent, purchasing The Dundalk Eagle community newspaper in Maryland, adding to its APG Media of Chesapeake holdings.

SkyMall, publisher of in-flight shopping catalogs, filed for Chapter 11 bankruptcy, seeking to find a buyer and reorganize. Social media was buzzing with jokes about all the silly items offered for sale to bored airline passengers who might be tempted to buy such things as a Big Foot statue or a mini-Mount Rushmore for their garden. Once reportedly viewed by 650 million passengers each year who had nothing else to do inflight, the CEO blamed smart phones and other devices for the demise.

The remaining properties of Cygnus Business Media, publisher of B2B titles, were acquired by SouthComm. Many readers of The Target Report will recognize Cygnus as the publisher of Printing News, MyPrint Resource.com, Quick Printing and other titles in the printing and related industries.



2015 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
Releases
Midstate Printing No Data Syracuse, NY  Quartier Printing No Data Syracuse, NY  1/29/15 No Data Merger Commercial printing Link
Glenroy No Data Menomonee
Falls, WI
PF Flexibles No Data Hartford, WI 1/28/15 No Data Acquisition Flexible packaging Link
RockTenn $10,050 Norcross, GA MeadWestvaco $5,630 Richmond, VA 1/26/15 $9,200 Merger Packaging & paperboard Link
AR Packaging Group € 424.0 Lund, Sweden Euro Folding Carton Business
(Div. MeadWestvaco)
€ 146.0 Richmond, VA 1/22/15 € 70.0 Acquisition Folding cartons Link
J.N. White Designs No Data Perry, NY Dawar Technologies
(Graphic Overlay Business)
No Data Pittsburgh, PA 1/20/15 No Data Acquisition Industrial printing Link
858 Graphics No Data San Diego, CA NonStop Signs No Data San Diego, CA 1/14/15 No Data Acquisition Wide format printing Link
Peczuh Printing No Data Price, UT Printing Resource No Data Lindon, UT 1/14/15 No Data Acquisition Commercial printing Link
Independent Printing $31.0 De Pere, WI Hayes Graphics $1.1 Mosinee, WI 1/14/15 No Data Acquisition Wide format printing Link
Didit No Data Mineola, NY Type-A-Line Mailing Services
(Re-branded DiditDM)
No Data Plainview, NY 1/13/15 No Data Acquisition Mailing services Link
Seaboard Graphics No Data Liverpool, NY Liverpool Litho No Data Liverpool, NY 1/13/15 No Data Acquisition Commercial printing Link
Menasha Packaging No Data Neenah, WI PearceWellwood No Data Brampton, ON 1/12/15 No Data Acquisition Retail display Link
Arrowhead Printing No Data Superior, WI Service Printers No Data Duluth, MN 1/12/15 No Data Acquisition Commercial printing Link
DG3 No Data Jersey City, NJ Digital Publishing Solutions No Data Somerville, MA 1/12/15 No Data Acquisition Document management Link
New-Indy JV
(JV Kraft Group / Schwarz Partners)
No Data Foxborough, MA Carolina Container No Data High Point, NC 1/9/15 No Data Acquisition Corrugated packaging Link
MeadWestvaco $5,630 Richmond, VA Specialty Chemicals No Data Richmond, VA 1/8/15 No Data Spin-off Industrial chemicals Link
Traxler Custom Printing $1.0 Columbus, OH DFC Screen Printing $0.5 Delaware, OH 1/8/15 No Data Acquisition Screen Printing Link
SouthComm No Data Nashville, TN Cygnus Business Media No Data Fort Atkinson, WI 1/8/15 No Data Acquisition Business publications Link
Adams Publishing Group No Data Minneapolis, MN The Dundalk Eagle
(Div. Kimbel Publication)
No Data Dundalk, MD 1/6/15 No Data Acquisition Community Newspaper Link
Multi-Color Corporation $779.1 Cincinnati, OH Multi Labels, Ltd. $15.0 Daventry, UK 1/6/15 No Data Acquisition Beverage labels Link
Wendell Group € 6,432 Paris, France Constantia Flexibles
(Portfolio co. One Equity Partners)
€ 1,630 Vienna, Austria 1/6/15 € 2,300 Acquisition Flexible packaging Link
HP Mile No Data Syracuse, NY  Lauraville Packaging No Data Geneva, NY 1/6/15 No Data Acquisition Specialty labels Link
Century Direct No Data Long Island
City, NY
Mailmen No Data Islandia, NY 1/6/15 No Data Acquisition Mailing & digital printing Link
Ennis $572.1 Midlothian, TX Kay Toledo Tag $25.0 Toledo, OH 1/6/15 No Data Acquisition Tags & labels Link
Spiral Binding No Data Totowa, NJ NSC International No Data Hot Springs, AR 1/5/15 No Data Acquisition Bindery supplies Link
A.H. Belo $363.1 Dallas, TX Distribion, Marketing FX, Vertical Nerve $10.0 Dallas, TX 1/5/15 $15.3 Acquisition
(Stephens, Inc.)
Marketing technology Link


2015 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:
SkyMall, LLC 1/22/15 $21.1 15-00679 Phoenix, AZ 9th Arizona
Phoenix
Brenda K. Martin Jason D. Curry Catalog publisher
Chapter 7 Filings:
Hart Printing & Lithographing Company 1/26/15 No Data 15-20237 Pittsburgh, PA 3rd Western PA
Pittsburgh
Gregory L. Taddonio Brian C. Thompson Commercial printing
Todd Allan Printing Co.,Inc. 1/23/15 No Data 15-10969 Bethesda, MD 4th Maryland
Greenbelt
Thomas J. Catliota Pro Se Commercial printing
Progressive Printing Services, Inc. 1/22/15 No Data 15-10492 Ontario, CA 9th Central CA
Riverside
Scott H. Yun Julian K. Back Commercial printing
Hefty Graphics, Inc. 1/19/15 No Data 15-40139 Minneapolis, MN 8th Minnesota
Minneapolis
Robert J. Kressel William A. Vincent Commercial printing


2015 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
Timsons - Press Manufacturing Facility 1st Qtr '15 No Data Kettering, UK Timsons Engineering Kettering, UK 1/9/15 Ceasing manufacturing of presses Link
Wisconsin Web Offset May-15 No Data Brookfield, WI Mittera Group Des Moines, IA 1/9/15 Consolidating commercial print operations Link
J.B. Kenehan Mar-15 No Data Brookfield, WI Mittera Group Des Moines, IA 1/9/15 Consolidating commercial print operations Link