Sunday, March 4, 2012

Private Equity Participates in Printing Industry Consolidation – February 2012 M&A Activity


Consolidation in all sectors of the printing industry continued unabated in February, with several deals enabled with the backing of private equity. As previously noted in The Target Report, private equity funds continue to find investment opportunities in the shrinking business of paper-based communications and the associated supporting industries. Only time will tell if these sophisticated investors get wounded, having caught the proverbial “falling knife,” or if they have made well-timed investments in an industry poised to stabilize and their funds provide reasonable returns to these believers in the future of print.

DG3, a global print services provider with roots in financial reporting, backed by Arsenal Capital Partners, acquired the print-related trade and assets of Sterling Financial Print. Sterling Financial Print, headquartered in London, is now part of DG3’s European print operations, while Sterling itself, having now shed its print production capabilities, focuses on financial information services including its proprietary virtual data room (VDR) offering.


Two significant players in the book manufacturing sector, Edwards Brothers and Malloy, have come together to form Edward Brothers Malloy. In a previous and related two part deal, announced in January 2011, Lion Equity Partners acquired Rockpoint Logistics from Kaplan, Inc., the subsidiary of The Washington Post Co., and then outsourced the operating management of Rockpoint Logistics’ printing operation to Edwards Brothers. Rockpoint Logistics offers print-on-demand, very short run printing and fulfillment services.

Archway, a marketing logistics and fulfillment company backed by two PE firms, Tailwind Capital and Black Canyon Capital, acquired Synq Solutions. Synq Solutions brings digital print and additional fulfillment capabilities to Archway. Both companies tout strong support services for companies with business models that require sophisticated multi-location marketing campaigns in retail environments, including automotive dealerships, quick service restaurants (QSR’s), food and beverage companies, and retail chains.

In the packaging space, Rohrer Corporation, backed by ShoreView Industries, acquired Hogue Printing Solutions, bringing manufacturing capacity in Arizona to this Ohio-based company. The roll-up strategy in the printing industry continues to evolve, as noted in the January Target Report. Nationwide Graphics, a veteran roll-up company, recently renamed Nationwide Argosy Solutions, combined its two Florida operations, Franklin Communications and Dodd Communications into the renamed Franklin Dodd Communications. Nationwide Argosy Solutions is a portfolio company of Davis, Tuttle Venture Partners.
In a move contrary to the over-arching consolidation wave rolling over the printing industry, Manroland, the insolvent German press manufacturer, is being split in two. The web press division was acquired by L. Possehl & Co., a German holding company with global manufacturing operations. Ownership of the sheetfed press division moves across the channel to Langley Holdings, a privately owned UK-based engineering group. We suspect that owners of Manroland presses, both web and sheetfed, breathed a sigh of relief hearing about these transactions, hoping that parts and support will continue to be available. It remains to be seen if the market will support two “new” press manufacturers when there was insufficient demand for these world-class machines under one management.

Craftsman Press voluntarily filed for Chapter 11 bankruptcy on February 23rd. Craftsman Press produces direct mail and publications on web press equipment in its 186,000 SF facility in Cheverly, Maryland. The company has the exclusive right to file its plan of reorganization until June 22, 2012. We found five Chapter 7 filings during the month of February in the printing and related industries, including copy shops, an envelope printer, a commercial printer, as well as a corrugated box manufacturer. Beginning this month, we have segregated the listings by filing status, so that readers of The Target Report can focus on the potential opportunities presented by the companies that are operating in Chapter 11
.


2012 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
DG3 No Data Jersey City, NJ Sterling Financial Print No Data London, UK 2/29/12 No Data Assets Acquisition Financial print & media Link
Base-Line, Inc. No Data Shelton, CT Graphline, Inc. No Data Sunrise, FL 2/24/12 No Data Stock Purchase Press & Prepress Supplies Dist. Link
Precision Paper Company No Data Tampa, FL Dietzgen, Div. Nashua Corp. No Data Park Ridge, IL 2/21/12 No Data Acquisition Reprographic media Link
Archway Marketing Services No Data Rogers, MN Synq Solutions No Data Atlanta, GA 2/21/12 No Data Acquisition Fulfillment & Print Mngt. Link
Dodd Communications
(Franklin Dodd Communications)
No Data Miami, FL Print $11.5 Miami, FL 2/21/12 No Data Acquisition Commercial Printing
(Sub. Nationwide Argosy) 
Link
International Paper $26,000 Memphis, TN Temple-Inland, Inc. $3,800 Austin, TX 2/13/12 $4,500 Acquisition
(Will divest Bldg. Prdcts.)
Corrugated packaging
$32/share+$700Mil debt assumed
Link
Rohrer Corp. $77.2 Wadsworth, OH Hogue Printing Solutions No Data Mesa, AZ 2/13/12 No Data Acquisition Commercial, digital & packaging Link
Lewis Creative Technologies
(Conquest Graphics)
No Data Richmond, VA Lorraine Press No Data Salt Lake City, UT 2/9/12 No Data Acquisition
(New Direction)
Commercial printing Link
Edwards Brothers
(Edwards Brothers Malloy)
No Data Ann Arbor, MI Malloy, Inc. No Data Ann Arbor, MI 2/6/12 No Data Merger Book Manufacturing
($115MIl combined rev.)
Link
L. Possehl & Co. € 2,500 L├╝beck, Germany  Manroland Web Systems No Data Augsberg,
Germany
2/1/12 No Data Acquisition Purchased in German Insolvency Proceeding Link
Langley Holdings PLC € 500 Nottinghamshire,
England, UK
Manroland Sheetfed Division No Data Offenbach,
Germany
2/1/12 No Data Acquisition Purchased in German Insolvency Proceeding Link
Quad/Graphics Inc. $4,670 Sussex, WI Williamson Printing No Data Dallas, TX 2/1/12 No Data Acquisition Commercial Printing Link
Indexx $15.5 Greenville, SC Crowson Stone Printing No Data Columbia, SC 2/1/12 No Data Assets Acquisition Commercial Printing Link




2012 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:
Graphic Trade Bindery, Inc.
(DBA Craftsman Press)
2/23/12 No Data 12-13189 Cheverly, MD 4th Maryland
Greenbelt
Thomas J. Catliota Lawrence A. Katz   Web printer: direct mail, publications.
Chapter 7 Filings:
Front Range Envelope 2/23/12 No Data 12-13030 Denver, CO 10th Colorado
Denver
Sidney B. Brooks Kimber Z. Smith Envelope printer.
KAP Graphics, Inc. 2/14/12 No Data 12-05290 Mundelein, IL 7th Northern IL
Chicago
A. Benjamin Goldgar Stuart P Krauskopf Commercial printer.
Diter Printing, Inc. 2/10/12 No Data 12-50162 Harrisonburg, VA 4th Western VA
Harrisonburg
Ross W. Krumm James O. Clough Copy shop.
American Corrugated, Inc.
(AKA American Box Company)
2/9/12 No Data 12-13286 Riverside, CA 9th Central CA
Riverside
Wayne E. Johnson Lawrence B Yang Corrugated box mfg.
MRH Printing, Inc.
(DBA Proprint)
2/1/12 No Data 12-40796 Ballwin, MO 8th Eastern MO
St. Louis
Charles E. Rendlen III  Nathan H. Goldberg   Copy shop.