Saturday, February 4, 2012

Transition from 500+ Year “Print-then-Distribute” Model – January 2012 M&A Activity

The “print-then-distribute” model, which has prevailed for more than 500 years, continues to yield its dominance to the internet-enabled model of “distribute-then-print.” In a transaction that is as much about storing, managing and distributing information as it is about the final delivery mechanism of “ink on paper,” Xerox acquired LaserNetworks, a Canadian Managed Print Services (MPS) company that supports over 40,000 print-related devices. In another transaction in January, The Sheridan Group, printer of books and journals, along with two companies in the UK and a third printing company with facilities throughout Asia, formed the Content Delivery Alliance to electronically distribute published content globally and then print that content locally.

There were two significant transactions involving printing franchise systems. The investors behind Allegra Networks formed a NewCo (name to be announced) to purchase Signs By Tomorrow. The acquired company prints signs, wraps and banners and for the foreseeable future will co-exist with Allegra’s other wide-format printing business, Signs Now. Blackstreet Capital Partners acquired AlphaGraphics, the international chain of “instant printing” franchisees with over 300 store fronts, another indication that private equity is finding value in the printing industry, a trend we noted last month. In another move by a private equity fund, Arbor Investments acquired Great Lakes Packaging, adding to the two packaging firms already in its portfolio.

Other notable transactions include Cenveo’s divestiture of its PrintXcel and Printegra subsidiaries, both sold to Ennis. Cenveo and Ennis each claim that the move furthers their respective strategic plans. AGI World merged with Shorewood Packaging to form the new AGI-Shorewood, a global packaging powerhouse backed by the private equity fund Atlas Holdings.

We are experiencing a bit of déjà vu as the roll-up strategy appears to be returning to the printing industry. For the second month in a row, ArborOakland Group made The Target Report, acquiring North American Reprographics, advised by the masters of the printing roll-up, the folks now at New Direction Partners. A new player, Ovation Graphics, has emerged on the scene in Texas, purchasing the assets of the venerable Branch-Smith Printing company. Ovation’s press release articulated its vision to be a “growing family of printing companies that stretches from coast to coast and is involved in numerous areas of the printing industry.” The roll-up has returned.

For the second month in a row, we could not find one printing or packaging company that filed for protection under the Chapter 11 Bankruptcy code, nor did we find any that filed for liquidation under Chapter 7. This good news for the industry is consistent with recent reports that a greater percentage of printers in the US reported increased profits during the fourth quarter of 2011, more printers plan to hire additional employees, and more printers expect revenues to increase.

There were two major bankruptcies in January that are indicative of the undeniable and systemic changes taking place in the dissemination of information and images. A Canadian manufacturer of newsprint, Catalyst Paper Corp, operating in Canada under the Canadian equivalent of U.S. Chapter 11 bankruptcy, filed for protection from its U.S. creditors under Chapter 15 of the US bankruptcy code. The biggest bankruptcy news in January, in and out of the printing industry, was Kodak’s filing for Chapter 11 bankruptcy protection. For those involved in the printing industry, it is notable that Kodak’s plan to emerge from bankruptcy hinges on an increased focus on digital printing, including home photo printers, commercial inkjet presses, workflow software and packaging.

2012 January - Mergers and Acquisitions in the Printing, Packaging, Paper & Related Industries

Deal Party #1
(Surviving Entity)
($Mil )

Party #1 Address

Deal Party #2
($Mil )

Party #2 Address

Deal Structure


Allegra Network LLC $300.0 Plymouth, MI Signs By Tomorrow, Inc $70.0 Columbia, MD 1/30/12 No Data Assets Acquisition
(Newco formed)
Signs, wraps and banners Link
GPM No Data Rohnert Park  Impress Northwestern  No Data Santa Rosa, CA 1/30/12 No Data Merger Offset, digital.
($7.5Mil combined rev.)
Ennis Inc $550.0 Midlothian, TX PrintXcel and Printegra
(Subsidiaries of Cenveo)
$80.0 Stamford, CT 1/30/12 No Data Not Disclosed Forms & Documents Link No Data Livingston, MT Southwest Color No Data Tucson, AZ 1/25/12 No Data Assets Acquisition Digital & Variable Data Printing Link
Blackstreet Capital Partners No Data Chevy Chase, MD AlphaGraphics, Inc. No Data Salt Lake City, UT 1/18/12 No Data Acquisition Print franchise system Link
The Sheridan Group  $266.2 Hunt Valley, MD Content Delivery Alliance  N/A UK, Australia, Singapore, N. Zealand 1/16/12 No Data Strategic Alliance Global Distribute-Then-Print
Vision Graphics, Inc. No Data Loveland, CO Eagle:XM No Data Denver, CO 1/13/12 No Data Stock Purchase Data-driven mktg services Link
Electronics for Imaging (EFI) $5,040 Foster City, CA Cretaprint No Data Castellon, Spain 1/10/12 $52.0 Acquisition Printing on ceramic tiles.
$31 Mil + $21 Mil earnout
ArborOakland Group No Data Royal Oak, MI North American Reproductions No Data Livonia, MI 1/9/12 No Data Acquisition
(New Direction)
Short run, on-demand textbook Link
Arbor Investments No Data Chicago, IL Great Lakes Packaging No Data Germantown, WI 1/9/12 No Data Acquisition Corrugated pckg & display Link
BRD Printing No Data Lansing, MI EP Images No Data Lansing, MI 1/5/12 No Data Assets Acquisition Commercial printers Link
Ovation Graphics No Data Fort Worth, TX Branch-Smith Printing $15.3 Fort Smith, TX 1/5/12 No Data Assets Acquisition Commercial printers Link
Burton & Mayer $13.0 Menomonee Falls,
Angel Lithographing $3.0 Sturtevant, WI 1/5/12 No Data Tuck-in of Sales
(New Direction)
Commercial printers Link
Foresight Group No Data Lansing, MI Huron Valley Printing No Data Pittsfield, MI 1/5/12 No Data Merger Short run offset & digital Link
Xerox Corp. $22,500 Norwalk, CT LaserNetworks No Data Oakville, ON (CN) 1/4/12 No Data Acquisition Managed Print Services Link
AGI World
No Data Melrose Park, IL Shorewood Packaging No Data Stamford, CT 1/3/12 No Data Merger Global packaging business Link
Classic Graphics $50.0 Charlotte, NC Harperprints No Data Henderson, NC 1/2/12 No Data Assets Acquisition Offset, digital Link

2012 January - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries

Filing Party

($Mil )

Case #

Filing Party Address


Region & City


Attorney for Debtor

Eastman Kodak Company 1/19/12 $6,000.0 12-10202 Rochester, NY 2nd Southern NY
New York
Allan L. Gropper Andrew G. Dietderich Plan to emerge w/ digital print strategy.
Catalyst Paper Corp 1/18/12 $1,228.6 12-10221 Richmond, BC (CN) 3rd Delaware
Peter J. Walsh Van C. Durrer, II  Newsprint manufacturer,
Chapter 15 filing.