Monday, August 5, 2013

Transition to Digital Printing Roils the Book Industry – July 2013 M&A Activity

Transactions in the book printing industry took center stage in July; the headline act was the Chapter 11 bankruptcy filing of Cengage Learning. The company is now moving rapidly to a digital strategy, as it seeks to shed more than $4 billion in debt through the bankruptcy process. CEO Michael Hansen, as reported by Bloomberg, squarely placed the blame on the company itself for not adopting digital quickly enough, due to the “belief that the print model would hold up better than it actually did.”

Private equity firm Castle Harlan increased its position in the book printing industry with its investment in Bookmasters, which has expertise in digital book printing. The deal was announced as a strategic partnership between Bookmasters and Castle Harlan’s existing portfolio company, Baker & Taylor, the world’s largest distributor of books and related materials. The two companies will continue to operate independent of each other.

Edward Brothers Malloy, formed in February 2012 with the merger of two book manufacturing companies, announced the closure of one of its two printing facilities in Ann Arbor, MI. John Edwards, CEO of the company, attributed the closure to a significant decline in the demand for longer runs which utilized the offset printing process. He also noted that the closure is consistent with the company’s strategic effort to grow its digital book printing business. The company is capable of the “distribute-then-print” model of content delivery, using its several remote digital printing facilities in the US, as well as its one facility in the UK.

Bucking the trend toward digital book printing, Publisher’s Graphics, an innovator in internet-based ordering and online sales of digitally printed books, acquired Corley Printing, a traditional offset book printer with capability to produce longer runs printed on offset presses.

Consolidation was once again the main act in the packaging industry, with an assist by private equity. Chicago PE firm Svoboda Capital Partners was back in the market. Svoboda acquired TVC Label and “bolted” the company onto its platform company, M.E.I. Labels, which it acquired in December 2012. Madison Dearborn Partners, also of Chicago, announced that it agreed to buy Multi Packaging Solutions from Irving Place Capital, preparing Multi Packaging Solutions for a second act in its growth from inception in 2005 to global player in the packaging industry. Back on the deal log for the third time in less than two years, publically traded Multi-Color Corporation acquired Flexo Print, a label printer in Guadalajara, Mexico.

Clarence Schawk, founder of the global image management company, once told me that he “did not want to own iron,” rather he preferred to remain firmly on the image and brand management side of the graphics business. True to this vision, Schawk, now rebranded at the corporate level as SGK, stuck to its script, selling its large format printing facility in Los Angeles, California. On the buy side of the transaction, and clearly articulating the opposite strategy, dedicated to being a technology-driven company, The Garvey Group purchased Schawk’s Los Angeles large format facility. Garvey is truly a company that likes the heavy iron, announcing last month that it bought a six-color UV-capable 64” offset press, the eighth KBA press in its troupe of oversize offset presses.

Ricoh purchased a minority interest in Avanti, one of the few remaining independent providers of printing management information systems (MIS). One day later, Hewlett-Packard announced that it was closing Hiflex, the print MIS system it purchased last year. Meanwhile, Electronics for Imaging (EFI) continues to dominate the print MIS business, having acquired and then discontinued numerous competitors. Will Ricoh succeed where HP failed?

The print management business (aka purchase aggregation and/or print outsourcing) was active in July. Innerworkings announced the acquisition of EyeLevel, a company which produces retail displays and fixtures in the Czech Republic. This follows the company’s acquisition last month of a packaging design and sourcing company in the UK. Another player in the print management space, Pitney Bowes, is bowing out of the business, selling its PB Management Services unit to Apollo Global Management. Apollo is the huge investment firm that proclaims its expertise to be contrarian, value-oriented investing, with significant distressed expertise. The print management business is changing – are these transactions signals that the overcapacity in the offset printing business might be lessening, possibly mitigating the advantages that endemic overcapacity afforded the print management firms? More on this topic to come in August!

July was another busy month for transactions in the printing and related industries – see the deal logs below for complete details and links to source articles.

2013 July - 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


Innerworkings $813.5 Chicago, IL EyeLevel No Data Prague,
Czech Republic
7/31/13 No Data Acquisition Retail displays & fixtures Link
Apollo Global Management No Data New York, NY Pitney Bowes
Management Services
$4,840 Stamford, CT 7/31/13 $400.0 Acquisition Print management Link
The Printing Co. No Data Cape Girardeau, MO Steven Brothers Printing No Data Park Hills, MO 7/30/13 No Data Merger Printing & copying Link
Spartanics No Data Rolling Meadows, IL Malahide No Data Vancouver, BC 7/29/13 No Data Acquisition Hot stamping presses Link
Deluxe Corporation $1,530 Shoreview, MN Vertical Response No Data San Francisco, CA 7/25/13 $27.0 Acquisition Email marketing service Link
M.E.I. Labels No Data Catoosa, OK TVC Label / TVC One No Data Lewisville, TX 7/24/13 No Data Asset purchase Labels & packaging Link
Multi-Color Corporation $660.0 Cincinnati, OH Flexo Print $30.0 Guadalajara, Mexico 7/24/13 No Data Acquisition Product labels Link
Alliance Printing and Imaging No Data Roswell, GA Stroud's Southern Printing No Data Roswell, GA 7/23/13 No Data Employee buyout Printing & copying Link
Millcraft Paper Company No Data Cleveland, OH Lindenmeyr Munroe,
Ariva, Midwest Ops
No Data Purchase, NY 7/22/13 No Data Acquisition Paper distribution Link
Central National-Gottesman
(Lindenmeyr Munroe)
No Data Purchase, NY Domtar, Ariva Division, US Ops $5,370 Covington, KY 7/22/13 No Data Acquisition Paper distribution Link
Sandy Alexander Mngt Team No Data Clifton, NJ Sandy Alexander No Data Clifton, NJ 7/22/13 No Data Management Buyout Commercial printing Link
Bencis Capital Partners No Data Amsterdam,
Xeikon € 130.2 Brieversstraat,
7/18/13 € 110.3 Stock purchase
Digital printing equipment Link
Modern Litho No Data Jefferson City, MO Midtown Printing No Data St. Louis, MO 7/17/13 No Data Merger Commercial printing Link
Ricoh ¥1,924 Tokyo, Japan Avanti No Data Toronto, ON 7/11/13 No Data Minority interest Print MIS system Link
Direct FX No Data Memphis, TN Quality DPM
(Now Direct FX Mississippi)
No Data Southaven, MS 7/10/13 No Data Acquisition Commercial printing Link
Castle Harlan No Data New York, NY Bookmasters No Data Ashland, OH 7/10/13 No Data Acquisition Book printing & services Link
Madison Dearborn Partners No Data Chicago, IL Multi Packaging Solutions No Data New York, NY 7/8/13 No Data Acquisition
(BoA/ML & Barclays)
Packaging, labels & inserts Link
Garvey Group
(Garvey Group West)
No Data Niles, IL Schawk (SGK)
Large format facility
$459.0 Des Plaines, IL 7/8/13 10.2
Asset purchase Large format printing Link
Atlas Die No Data Elkhart, IN Bernal No Data Rochester Hills, MI 7/8/13 No Data Acquisition Converting dies Link
Ennis $533.5 Midlothian, TX Duffie Graphics No Data Danville, VA 7/5/13 No Data Asset purchase Forms & promo products Link
Publishers' Graphics No Data Carol Stream, IL Corley Printing No Data Earth City, MO 7/2/13 No Data Acquisition Book printing Link
Arbor Investments No Data Chicago, IL Keyes Packaging Group No Data Wenatchee, WA 7/1/13 No Data Acquisition Fiber trays and printed wraps Link
BRP Company No Data Blue Ridge Printing No Data Asheville, NC 7/1/13 $1.0 Acquisition Commercial printing Link
Ennis $533.5 Midlothian, TX Goodwin Graphics No Data Carrollton, TX 7/1/13 No Data Asset purchase Forms & promo products Link

2013 July - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries

Filing Party

($Mil )

Case #

Filing Party Address


Region & City


Attorney for Debtor

Chapter 11 Filings:
Transprint USA, Inc. 7/10/13 No Data 13-27698 Harrisonburg, VA 9th Central CA
Los Angeles
Vincent P. Zurzolo Margreta M Morgulas  Heat transfer paper & supplies
Colorep, Inc. 7/10/13 No Data 13-27689 Rancho Cucamonga, CA 9th Central CA
Los Angeles
Julia W. Brand Margreta M Morgulas  Heat transfer paper & supplies
Johnston Lithograph, Inc. 7/8/13 No Data 13-53213 Romulus, MI 6th Eastern MI
Marci B McIvor Afan Bapacker  Commercial printing
(AKA Thomson Learning, et al)
7/2/13 $1,992 13-44106 Fairfield, CT 2nd Eastern NY
Elizabeth S. Stong Jonathan Henes Textbook publisher
Chapter 7 Filings:
EZ Screen Printing, LLC 7/10/13 No Data 13-26147 Miami, FL 11th Southern FL
A. Jay Cristol Timothy S. Kingcade Screen printing equipment
Hooker-Ballew Printing Company 7/1/13 No Data 13-33387 Plano, TX 5th Northern TX
Harlin DeWayne Hale Reedy Macque Spigner, Jr.  Commercial printing

2013 July - Non-Bankruptcy Closures in the Printing, Packaging, Paper & Related Industries

Closed Company / Facility

Date of Closure
($Mil )

Closing Address
Related Party

Related Party
Date Closure Public


Hiflex MIS Systems Jul-13 No Data Ashland, NY
(NA Offices)
Hewlett-Packard (HP) Palo Alto, CA 7/12/13 Printing MIS software Link
Hess Print Solutions Aug-13 No Data Woodstock, IL Bang Printing Brainerd, MN 7/30/13 Plant closed after 363 sale to Bang Printing Link
Edward Brothers Malloy - Printing Facility Jan-14 No Data Ann Arbor, MI Edward Brothers Malloy Ann Arbor, MI 7/30/13 Consolidation of book printing ops Link