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

Sunday, January 6, 2019

Consolidation in Commercial Printing Rolls On - December 2018 M&A Activity



The roll-up consolidation process is in full swing and gaining momentum in the commercial printing segment. The Mittera Group, based in Iowa and operating plants as far flung as New Jersey, Long Island, Florida and Texas, as well as much closer to home in Wisconsin, announced the acquisition of the Kansas City operation of Henry Wurst, a web and sheetfed commercial printer.

The sale to Mittera is a sudden reversal for the Henry Wurst company, which was confident enough in 2015 to invest a reported $8 million in a new five-unit Goss Sunday 2000 press to modernize its high-volume heatset web printing capabilities. The new press went into production in mid-2016 and doubled the potential page output of the two older presses that were retired in the upgrade. The company president, commenting on the company’s first major investment in quite some time, stated that the new press “puts us back in the game.” Shortly thereafter, in early 2017, Henry Wurst announced the acquisition of Universal Printing, a similarly configured heatset and sheetfed commercial printer located in St. Louis, at the far eastern end of Missouri. In what was a clear consolidation play, the Universal production facility was shuttered, moving production to the renewed platform at Henry Wurst.

The purchase of Henry Wurst by Mittera follows a well-defined playbook in which the Iowa-based consolidator has grown by acquiring larger and larger commercial printing companies, some of which were roll-ups themselves of several venerable companies that had been proudly independent family-owned printing companies. As the prospects of the industry have changed, many of these companies have come on the market at discount. Today’s consolidators in commercial printing are picking up the pieces and rationalizing the excess production capacity by closing facilities and shedding less productive equipment. While the purchase price for Henry Wurst was not disclosed, it was widely known that the Mittera’s acquisition last year of New Jersey-based Earthcolor, itself comprised of several defunct printing companies, was a distressed sale under pressure from the company’s lenders. That deal was structured as a “composition” (i.e. an orderly non-bankruptcy sale of intangible assets and fixed assets, accompanied by a wind-up of the predecessor corporation). That transaction catapulted Mittera onto the national stage; now a leader among the emerging consolidators we noted in past reports (see The Target Report: The Roll-Up Returns (to Commercial Printing – September 2014).




Commercial Printing and Diversified Services


H.I.G. Capital, one of the largest global private equity funds, once again voted with its wallet and expressed confidence in the future of print, announcing the acquisition of Vision Integrated Graphics. Vision, as its now known, is a Chicago area data-driven direct mail marketing powerhouse, with ancillary marketing services, retail display print, and fulfillment services. This is a secondary private equity buyout for Vision, which was previously backed by Concentric Equity Partners.

At H.I.G. Capital, commitment to the print industry runs deep; the fund established a separate platform investment when it acquired Digital Room in January 2018 from venture capital firm Insight Ventures. With revenue in excess of $80 million, Digital Room has four production plants and a multitude of web-to-print website brands including UPrinting, NextDayFlyers, PrintPlace, PrintRunner and 48HourPrint. H.I.G. subsequently bolted Logo Sportswear on to Digital Room. The acquired company sells promotional items and apparel company, all via online e-commerce sites.

GSB Digital, headquartered in Long Island City, New York, provides print and litigation support services to the New York City market and announced the acquisition of Aldine Printing.* GSB will be assuming the production for Aldine’s customers, primarily financial, legal and fashion companies requiring high-end corporate identity and event products.

Aldine’s departure from Varick Street is the latest in a long line of printing company exits from the heart of the traditional printing district in Manhattan, now populated by swarms of Millennials working at tech start-ups, drinking lattes at Starbucks and grocery shopping at the new Trader Joe’s. Printers in Long Island City, home to many of the printing companies exiled from the Varick Street print mecca, now face similar gentrification pressure which is sure to increase as Amazon settles in to its designated second HQ location. Some have already made the move out to the suburbs, completely abandoning New York City as a place to print.

Fuse, a roll-up of three former Chicagoland printing companies, Buhl Press, Kelmscott Communications and Rider Dickerson, took the next step in its growth-by acquisition strategy, acquiring Chicago-based Digital Hub.

SGM Technologies, a Dallas-based digital marketing agency, acquired United Group Printing, also located in Dallas. Structured as a reverse tuck-in, SGM acquired United as a fully operating offset and digital printing facility, including the real estate, as the first step in its plan to grow by acquisition.

In the vast western Canadian region, the Burke Group, headquartered in Edmonton, Alberta, announced the acquisition of two Calgary-based commercial printing companies, Printcor and Topline Printing. Given that the acquired companies are more than three hours distant from Burke’s headquarters in Edmonton, across the Canadian Prairies, the plan is to consolidate the operations into the existing Topline plant in Calgary.

In 2017, the Burke Group acquired its major competitor in Edmonton, McCallum Printing. Sounding a lot like his American roll-up counterparts, the owner and CEO of the Burke Group stated that he “is moving quickly and strategically to drive the print market forward in Western Canada.” We expect that we’ll hear from Burke again.

Franchises

Alliance Franchise Brands, the roll-up of franchised operations in the graphic communications industry, announced the acquisition of RSVP Publications, a Florida-based direct mail system that produces and mails advertising card packages focused on upscale consumers. Alliance, based in Plymouth, Michigan, owns nine franchise systems with over 650 locations. RSVP Publications joins print and marketing service providers Allegra, Insty-Prints, KKP, and American Sir Speedy, as well as wide format print providers Image360 , Signs by Tomorrow, and Signs Now. True to form for Alliance, RSVP Publications is structured as a franchised operation and joins Alliance under the Allegra banner.


* Graphic Arts Advisors, publisher of The Target Report, served as advisors to Aldine Printing in this transaction.
 Graphic Arts Advisors, publisher of The Target Report, served as advisors to United Group Printing in this transaction.



2018 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
Mittera Group $165.8 Des Moines, IA Henry Wurst
(Kansas City operations)
$91.5 Kansas City, MO 12/21/18 No Data Asset Acquisition
(New Direction)
Commercial printing Link
Greif $3,870 Delaware, OH Caraustar Industries
(Port co. H.I.G. Capital)
$1,400 Austell, GA 12/20/18 $1,800 Acquisition Paperboard mills & products Link
Manroland Goss
(Port co. American Ind. Partners)
$298.5 Augsburg, Germany GWS Printing Systems No Data Waalwijk, Netherlands 12/20/18 No Data Acquisition Press sales & upgrades Link
GSB Digital No Data Long Island City, NY Aldine Printing No Data New York, NY 12/20/18 No Data Acquisition
(Graphic Arts Advisors)
Stationery printing Link
Rayacom Group No Data Vancouver, BC Wilson Business Solutions No Data Hamilton, ON 12/19/18 No Data Acquisition Printing & copying Link
Allegiance Fundraising Group No Data Lakewood Ranch, FL One to One  No Data Sarasota, FL 12/17/18 No Data Acquisition Direct mail marketing Link
Alliance Franchise Brands No Data Plymouth, MI RSVP Publications No Data Tampa, FL 12/14/18 No Data Acquisition Direct mail franchises Link
FutureStake No Data Gettysburg, PA New Leaf Paper No Data Walnut Creek, CA 12/12/18 No Data Acquisition Paper distribution Link
SGM Technologies No Data United Group Printing No Data Dallas, TX 12/12/18 No Data Acquisition
(Graphic Arts Advisors)
Commercial printing Link
H.I.G. Capital No Data Miami, FL Vision Integrated Graphics
(Port co. Concentric Equity)
$98.0 Bolingbrook, IL 12/11/18 No Data Acquisition
(Lincoln International)
Direct mail marketing Link
Burke Group No Data Edmonton, AB Topline Printing No Data Calgary, AB 12/10/18 No Data Acquisition Commercial printing Link
Burke Group No Data Edmonton, AB Printcor No Data Calgary, AB 12/10/18 No Data Acquisition Commercial printing Link
Cascades $3,380 Kingsey Falls, QC Urban Forest Products
Clarion Packaging
$110.0 Brook, IN
Clarion, IA
12/6/18 $37.4 Acquisition Pulp packaging Link
Fuse No Data Berkeley, IL Digital Hub No Data Chicago, IL 12/3/18 No Data Acquisition Commercial printing Link
Adams Publishing Group No Data Minneapolis, MN Watertown Daily Times
(Prop. James M. Clifford)
No Data Watertown, WI 12/3/18 No Data Acquisition
(Dirks, Van Essen)
Community newspapers Link
Adams Publishing Group No Data Minneapolis, MN Daily Jefferson County Union
(Prop. W.D. Hoard & Sons Co.)
No Data Fort Atkinson, WI 12/3/18 No Data Acquisition
(Dirks, Van Essen)
Community newspapers Link
Koenig & Bauer (KBA) No Data Wurzburg, Germany Duran Machinery No Data Istanbul, Turkey 12/1/18 No Data Acquisition Folder-gluer machinery Link


2018 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:
No Chapter 11 Filings Found this Month --- --- --- --- --- --- --- --- ---
Chapter 7 Filings:
Arrow Graphics, Inc. 12/4/18 No Data 18-33681 Maryville, TN 6th Eastern TN
Knoxville
Suzanne H. Bauknight Patrick Woodside, Jr. Commercial printing


2018 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
Colonial Printing 2/7/19 No Data Warwick, RI Bradford Equities White Plains, NY Dec-18 Commercial printing Link
American Printing & Envelope 1/11/19 No Data Auburn, MA None N/A Dec-18 Commercial printing Link