Monday, December 7, 2015

Rollin’ Rollin’ Rollin’ - November 2015 M&A Activity


Rawhide... by The Blues Brothers (click here for the song while reading)

Call it a roll-up; strategic add-ons, or platform bolt-ons – by any name you give it, M&A activity is brisk as companies build specialty printing companies with scale and geographic diversity. In the packaging segment, Pharmaceutic Litho & Label, a California-based insert and label printing company, acquired east-coast Plymouth Printing. With plants in New Jersey and North Carolina, the acquired company has been laser-focused on the pharmaceutical insert and label market for almost 90 years. As a portfolio company of Saugatuck Capital since October 2014 (see The Target Report – October 2014, the Pharmaceutic platform has now established a stake in the competitive territory for pharmaceutical inserts and labels. With the additional backing and participation of mezzanine fund Ironwood Capital, we won’t be surprised to see Saugatuck continue to roll this one up.

Rondo-Pak, a subsidiary of Swiss conglomerate Körber and much larger player in the same niche market segment, merged with New Jersey printer Contemporary Graphic Solutions. The newly formed US division will carry the Rondo-Pak name and combines Rondo’s existing US and Puerto Rico operations and brings pharmaceutical folding cartons into the mix for Contemporary’s existing customer base.

Marketing Services (MSP’s)

Commercial printers have struggled to redefine themselves as more than just another print shop hungrily hoping to successfully bid on and win their next order. Many have migrated into the middle ground between being a printer or an advertising agency, finding themselves in the loosely defined territory of “marketing service providers,” also known as MSP’s. The trail on the way to being a true MSP is littered with companies that have failed to execute, only having succeeded in re-branding themselves with a new name, but failing to develop real differentiation or a well-defined and defensible position in the market.

Firespring, based in Lincoln, Nebraska, is a company that appears to have successfully navigated the journey, using a roll-up strategy to morph several small printing, mailing, marketing and design companies into a cohesive MSP. The company recently announced the acquisition of the latest target, the purchase of On-Time Marketing. This follows the company’s roll-up of five companies all at the same time in July 2015.

Grand & Wide Format Printing

Circle Graphics, headquartered in Longmont, Colorado, continues to add companies in its chosen territory, wide format and grand format printing, with its latest acquisition, the purchase of Imagic in Burbank, California. Bolstered by this acquisition, the company now claims to be the world’s largest producer of grand-format digital graphics. Using acquisitions to expand its geographic footprint, previous transactions include the purchase of the Art Division of Café Press in Raleigh, North Carolina earlier this year and the acquisition in 2014 of Mammoth Media in Boston.

Commercial Printing

One of the most active consolidators in recent years is the Mittera Group headquartered in Des Moines, Iowa. The company is apparently very happy to pursue the traditional roll-up strategy of acquiring good old fashioned printing companies that churn out millions of inserts, brochures, mailers and other printed products. While not eschewing the need to suggest that they support alternative communication channels, the company clearly believes in the value and endurance of print as its core product. The latest addition to the Mittera family is Pioneer Graphics which will be rolled into Mittera’s Colorfx facility in Waverly, Iowa. All told, Mittera and its subsidiary Colorfx have appeared on our deal log six times since we started reporting M&A deals in the printing and related industries in 2011. Previous acquisitions include the purchase of J.B Kenehan in October 2014 and Wisconsin Web Offset in October 2013 (see The Target Report – October 2013). As we asked our readers in that same month, when RR Donnelley announced its acquisition of Consolidated Graphics, will Mittera begin to take the place vacated when Consolidated was absorbed into RRD? The question remains: will Mittera break out of its Midwest region and become a national player?

Printing Management Information Systems (MIS)

It’s hard to write about roll-ups in the printing industry without bringing EFI into the conversation. The company continued its 12-year long buying spree of printing MIS systems, acquiring UK-based Shuttleworth Business Systems. Excluding EFI’s acquisitions of printing-related equipment, such as the recent moves into textile printing with the purchase of Reggiani Macchine (see The Target Report – July 2015), we count no less than 14 acquisitions on our deal log (now four years) of printing and packaging MIS systems and/or related web-to-print software. It sure feels like a long and winding trail from when PrintCafe surprised the printing industry in the midst of the late 90’s dotcom craze. PrintCafe, acquired by EFI in 2003, was itself a roll-up; the founders rounded up those first few print MIS systems, including Programmed Solutions (PSI), the MIS system I had purchased for my printing company. During the interim years, EFI has ceased developing the PSI system, and others as well, as the roll-up of printing industry MIS software systems keeps on rollin’ rollin’ rollin’…



2015 November - 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
Thompson Print & Mailing No Data San Antonio, TX Colour Solutions No Data San Antonio, TX 11/30/15 No Data Acquisition Trade show exhibits Link
Rondo-Pak
(sub. Körber Group)
No Data Norristown, PA Contemporary Graphic Solutions No Data Pennsauken, NJ 11/30/15 No Data Merger Pharma labels & packaging Link
Pharmaceutic Litho & Label
(Port co. Saugatuck Capital)
No Data Simi Valley, CA Plymouth Printing No Data Cranford, NJ 11/23/15 No Data Acquisition Pharma labels & packaging Link
Flint Group $2,900 Luxembourg Xeikon No Data Eede, Netherlands 11/20/15 No Data Acquisition Digital printing equipment Link
Allegra Design, Print, Mail No Data Richmond, VA Printing Services No Data Richmond, VA 11/18/15 No Data Acquisition Printing & copying Link
Skowhegan Press No Data Skowhegan, ME R.N. Haskins Printing No Data Oakland, ME 11/18/15 No Data Acquisition Commercial printing Link
Bangor Publishing No Data Bangor, ME St. John Valley Times No Data Madawaska, ME  11/13/15 No Data Acquisition Local newspaper Link
Mittera Group No Data Des Moines, IA Pioneer Graphics No Data Waterloo, IA 11/12/15 No Data Acquisition Commercial printing Link
Proforma Durkee No Data Huntsville, NC Print Focus No Data Hickory, NC 11/10/15 No Data Acquisition Promotional items Link
Proforma Signature Solutions No Data Brooklyn Heights,
OH
Parts Connection No Data Arlington, TX 11/10/15 No Data Acquisition Printing & copying Link
Berlin Packaging No Data Chicago, IL Diablo Valley Packaging $125.0 Fairfield, CA 11/10/15 No Data Acquisition Rigid packaging Link
Mondi Group $11,249 Addlestone, UK KSP No Data Seoul, South Korea 11/5/15 No Data Acquisition Flexible packaging Link
Circle Graphics No Data Longmont, CO Imagic No Data Burbank, CA 11/4/15 No Data Acquisition Grand & wide format printing Link
AIM Media Management No Data McAllen, TX Home Enterprises No Data Columbus, IN 11/4/15 No Data Acquisition Regional newspapers Link
Electronics for Imaging (EFI) $837.1 Foster City, CA Shuttleworth Business Systems No Data Kettering, UK 11/4/15 No Data Acquisition MIS system for printing Link
Hudson Yards No Data New York, NY Shootdigital No Data New York, NY 11/4/15 No Data Acquisition Digital creative & retouching Link
Quad/Graphics $4,770 Sussex, WI Specialty Finishing $70.0 Omaha, NE 11/3/15 No Data Acquisition Folding cartons Link
Firespring No Data Lincoln, NE On-Time Marketing No Data Ralston, NE 11/2/15 No Data Acquisition Mailing services Link


2015 November - 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:
Freedom Communications Inc. 11/1/15 No Data 15-15311 Santa Ana, CA 9th Central CA
Santa Ana
Mark Wallace William N. Lobel Regional newspapers
Chapter 7 Filings:
Haas Packaging & Design, Inc. 11/9/15 No Data 15-18080 Nazareth, PA 3rd Eastern PA
Reading
Richard E. Fehling Kevin K. Kercher Graphic design & banners


2015 November - 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
Nebraska Printing Jan-16 No Data Tampa, FL None N/A Nov-15 Commercial printer, sheetfed & web Link
Quad/Graphics - Printing facility Dec-15 No Data Augusta, GA Quad Graphics Sussex, WI  11/4/15 Insert & catalog printing
Formerly Brown Printing facility
Link
Quad/Graphics - Printing facility Dec-15 No Data East Greenville , PA Quad Graphics Sussex, WI  11/4/15 Magazine & catalog printing
Formerly World Color Press facility
Link

Saturday, November 7, 2015

The Box is in Demand- October 2015 M&A Activity


The Box is in – paperboard, corrugated, decorated, foil-stamped, bar-coded, laminated, textured, embossed, pearlized, diecut, folded, glued, large and small. Folks in the business of printing love the box. Unlike the box’s troubled cousin, commercial printing, the box is reordered on a regular basis and is far less subject to disruption by online internet-based technologies.

Graphic Packaging International announced the acquisition of Carded Graphics, a Virginia-based printer of folding cartons used to package food, craft beers and other consumer products. The company utilizes two traditional offset printing presses and diecutting technologies. The acquired company, Carded Graphics, is clearly a small catch relative to the buyer, which has revenues in excess of four billion dollars. Nonetheless, regardless of the relative small size of the acquisition, the transaction is consistent with the company’s clearly articulated strategic plan to focus on the production of folding cartons. Graphic Packaging also announced in October that it was expanding into the Mexican market for folding cartons with the acquisition of G-Box. The acquired company prints and manufactures folding cartons and corrugated boxes.

As reported over the past four years in The Target Report, Graphic Packaging has been consistently executing on its folding carton strategy. In December 2014, the company acquired Toronto-based Norampac from Cascades, adding three Canadian folding carton plants as well as a two paperboard mills, thus integrating raw material production into its folding carton business. Previous expansion of its international footprint in folding carton production includes the company’s acquisition of the UK-based companies Benson Group and Contego Cartons, in 2014 and 2012 respectively, having also added the Netherlands-based A&R Cartons in 2012.

In alignment with its strategic plan, Graphic Packaging has divested assets unrelated to its core focus on folding cartons. The company sold its multi-wall bag and kraft business to the Mondi Group and its Di-Na-Ca Label Group to Multi-Color Corporation, both transactions completed in 2014.

Another very active rollup play in the packaging industry, Multi Packaging Solutions, is also focused on the box, obtaining the majority of its revenue from the folding carton segment. Backed by private equity firms The Carlyle Group and Madison Dearborn Partners, Multi Packaging Solutions, became a publically traded company in October. Among its stated objectives in its prospectus is the acquisition of additional packaging companies. The company has appeared in our deal log no less than seven times over the past four years, most notably when it acquired AGI-Shorewood in 2014 2013 (see The Target Report – November 2014) and Chesapeake Services in 2013 (see The Target Report – November 2013).

Electronics for Imaging (EFI), the dominant company providing MIS systems to the printing and related industries, expressed its love for the simple box with its acquisition of Corrugated Technologies. The acquired company, based in San Diego, California, provides manufacturing and management information software to the corrugated packaging market.

Commercial Printing

M&A activity in the commercial printing segment remained spookily quiet in October, as it has been for several months, despite expectations that consolidation activity will be brisk in the commercial printing segment. What we see instead is that the recent uptick in commercial printing business activity, however modest, is providing some breathing room and profits for company owners that are happy to chug along, hoping that the slightly rising tide, combined with reduced competition courtesy of the great recession, will bring back the happy times.

A select few, however, in the commercial printing segment, are in the market, not consolidating, but rather making strategic acquisitions that broaden their portfolio of services. Dome Printing in Sacramento, California, acquired Bel Aire Displays, expanding the company’s geographic footprint and furthering its strategic goal to grow its presence in the market for in-store and out-of-home retail displays. Earlier this year, Dome acquired wide format printer and retail display company Color Solutions.

Drummond Press, based in Jacksonville, Florida, announced its second acquisition in Atlanta, Georgia, acquiring the print division of RGI. The digital printing operation is focused on data driven marketing programs and lead generation programs.

Book Printing

Bang Printing in Brainerd, Minnesota, acquired Sentinel Printing in St. Cloud, Minnesota. With extensive in-house binding capabilities, Bang focuses on the short and mid-run book manufacturing market. Similar to previous acquisitions by Bang of Hess Print Solutions in Ohio (see The Target Report – May 2013) and Victor Graphics in Maryland, this latest addition increases the company’s presence in the book printing segment.

Visant continued its ongoing exit from print-related businesses in its portfolio, selling yearbook company Jostens to consumer products conglomerate Jarden. Earlier this year, Visant sold book printer Phoenix Color (see The Target Report – July 2015) and in 2014 Visant divested its interest in direct mail printer Lehigh Direct which was acquired by SG360. Visant retains its school-branded apparel and awards, and is now fully divested of print assets.



2015 0ctober - 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
CCL Industries $2,750 Toronto, ON Banknote Corp of America
(Sub. Sennett Security Products)
$35.00 Greensboro, NC 10/29/15 $45.0 Acquisition Specialty labels, security docs Link
RR Donnelley $11,520 Chicago, IL Mediant Communications No Data New York, NY 10/26/15 No Data Minority Interest Shareholder communications Link
Graphic Packaging $4,140 Atlanta, GA G-Box No Data Guadalupe, México 10/22/15 No Data Acquisition Folding cartons Link
Multi Packaging Solutions
(Port co. Madison Dearborn)
$1,617 New York, NY Multi Packaging Solutions $1,500 New York, NY 10/21/15 $201.0 IPO Packaging printing Link
Borregaard $477.3 Sarpsborg, Norway  Flambeau Rivers Paper No Data Park Falls, WI 10/21/15 No Data Acquisition Lignin production Link
Dover $7,240 Downers Grove, IL JK Group No Data Novedrate, Italy 10/22/15 No Data Acquisition Textile inks Link
Drummond Press No Data Jacksonville, FL RGI (Print division) No Data Marietta, GA 10/21/15 No Data Acquisition Digital printing Link
RR Donnelley $11,520 Chicago, IL Courier Advisory Group No Data Tampa, FL 10/21/15 No Data Acquisition Logistics Link
Deluxe $1,760 Shoreview, MN Datamyx
(Port co. Halyard Capital)
No Data Boca Raton, FL 10/20/15 $160.0 Acquisition
(Petsky Prunier)
Marketing analytics Link
Jarden $8,430 Boca Raton, FL Jostens
(Sub. of Visant)
$740 Minneapolis, MN 10/14/15 $1,500 Acquisition Yearbooks & commemoratives Link
Barry-Wehmiller $2,000 Phillips, WI Winkler+Dünnebier (W+D) No Data Neuwied, Germany 10/13/15 No Data Acquisition Envelope mfg. equipment Link
Bang Printing No Data Brainerd, MN Sentinel Printing No Data St. Cloud, MN 10/14/15 No Data Acquisition Book printing Link
Bernard Group No Data Chanhassan, MN Hammer Direct No Data Minneapolis, MN 10/13/15 No Data Acquisition
(Quazar Capital)
Online commercial printing Link
Buyers Lab (BLI) No Data Fairfield, NJ InfoTrends No Data Weymouth, MA 10/13/15 No Data Acquisition Digital imaging research Link
Boston Globe No Data Boston, MA Gannett Boston Offset No Data Norwood, MA 10/9/15 No Data Acquisition Newspaper printing Link
Supremex $135.9 LaSalle, QC Classic Envelope $13.0 Douglas, MA 10/8/15 No Data Acquisition Envelope manufacturer Link
Gannett $2,960 McLean, VA Journal Media Group $450.0 Milwaukee, WI 10/7/15 $280.0 Acquisition Metro & regional newspapers Link
Electronics for Imaging (EFI) $837.1 Foster City, CA Corrugated Technologies (CTI) No Data San Diego, CA 10/7/15 No Data Acquisition MIS system for packaging Link
DOME No Data Sacramento, CA Bel Aire Displays $8.2 Richmond, CA 10/6/15 No Data Acquisition Retail display Link
Graphic Packaging $4,140 Atlanta, GA Carded Graphics No Data Staunton, VA 10/1/15 No Data Acquisition Folding cartons Link
Novolex
(Port. Co Wind Point Partners)
$2,000 Hartsville, SC Wisconsin Film & Bag
(Port. Co. Argosy Partners, et al.)
$62.0 Shawano WI 10/1/15 No Data Acquisition Plastic wraps & bags Link


2015 October - 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:
Project Digital, Inc. 10/26/15 No Data 15-62189 North Canton, OH 6th Northern Ohio
Canton
Russ Kendig Chris G. Manos  Design & print production


2015 October - 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
R.J. Bielen Laser Graphic Arts 11/5/15 No Data New Brunswick, NJ None N/A 10/28/15 Diecutting & finishing Link
Paperworks Industries - printing facility May-16 No Data Hamilton, ON Paperworks Industries Bala Cynwyd, PA 10/22/15 Consolidating ops to Kitchener, ON Link
SP Fibers - paper mill Nov-15 No Data Newberg, OR WestRock Norcross, GA 10/19/15 Newsprint paper mill Link
Harland Clarke - printing facility Jan-16 No Data San Antonio, TX Harland Clarke San Antonio, TX 10/20/15 Check printing Link
J&M Reproduction 11/5/15 No Data Troy, MI None N/A 10/20/15 Copy shop Link
Gannett Publishing - Printing facility Feb-16 No Data Springfield, VA Gannett McLean, VA 10/6/15 Newspaper printing Link
Gannett Boston Offset Dec-15 No Data Norwood, MA Gannett McLean, VA 10/5/15 Newspaper printing / Sale of Co. Link