Friday, April 8, 2016

Justice Department Saves Newspapers (really?) – March 2016 M&A Activity

The Department of Justice has entered the fray for the survival of printed news. As the bidding was being finalized to purchase the bankrupt Freedom Communications in Southern California, DOJ’s Antitrust Division stepped in at the last minute and pulled the plug, claiming that its action would ensure that competition in the newspaper industry is protected.

The DOJ had rattled its sword two days before the bids were in and warned the competing bidders that it would view a winning bid from Chicago-based Tribune Publishing as anti-competitive to the control of the news, as well creating a near-monopoly of the newspaper printing press capacity, in the region from Los Angeles to San Diego.

Freedom, which publishes the Orange County Register and the Riverside Press-Enterprise, ignored the warning from DOJ and proceed to select the bid from Tribune Publishing which was the highest by approximately $5 million. According to some industry pundits, Tribune Publishing was also logically the best bid because the combination of Tribune with Freedom would create a viable reporting and printing enterprise that could survive for the long term. Not to be ignored, the DOJ’s Antitrust division filed suit within hours to stop the sale to Tribune Publishing, and requested a restraining order to halt the process. A U.S. District judge quickly agreed to the restraining order. Without adequate time left to litigate as the drop-dead date from Freedom’s lender approached, Tribune Publishing was effectively out of the running to acquire Freedom Communications.

Lurking in the background was Freedom’s management group, which had initiated the bankruptcy process by filing Chapter 11 in November 2015, with the hopes of emerging from bankruptcy as the new owners. The company was losing money and shedding staff, subsequent to the widely touted (and as it turned out, wildly optimistic) roll-up of second-tier daily newspapers in the Southern California market by Aaron Kushner, who had earned a modest fortune in the greeting-card business. Kushner’s investment thesis was in stark contrast to the norm in the industry; hire more reporters, price online access on par with the printed newspaper and increase page counts. Even paper quality was upgraded. When the well-intentioned efforts failed, Kushner departed and management put the company into bankruptcy. From all reports, the management group never really had a chance given that the big players were very interested in acquiring Freedom’s position in the massive Los Angeles metro market.

Next in line behind Tribune Publishing, and in front of the management group’s proposal, was the bid from Denver-based Digital First Media (wishful-thinking name for a company that publishes 97 printed newspaper titles). Bringing the whirlwind process to a close on March 21st, the bankruptcy judge approved the sale of Freedom Communications to Digital First Media.

Digital First Media is owned by the mysterious New York-based hedge fund Alden Global Capital. In an ironic twist that is amazingly common in the topsy-turvy world of newspaper ownership, Alden Global Capital was previously an investor in Freedom Communications, buying the company out of its first bankruptcy in 2010, then selling it to a trust that subsequently sold the newspaper titles to Kushner.

For the time being, at least, the printing presses will continue to roll at the two competing daily newspapers serving the Los Angeles metro region. However, I don’t believe that this story is over as the wishful thinking exhibited by the DOJ flies in the face of the economics of the printed daily newspaper. The economic trends that have played out in city after city during the past two decades are inexorable; the internet has introduced alternative channels and real competition into the market for advertising. The simple truth is that the market may not be able to support multiple printed newspapers in many markets, even ones as large as the Los Angeles metro area.

2016 March - 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


(Port co. The Jordan Company)
No Data Franklin Park, IL Dow Chemical - Global Specialty Films Division $4,878 Midland, MI 3/31/16 No Data Acquisition Specialty packaging films Link
New London Communications
Mngt Team
No Data Alpharetta, GA New London Communications
(Port co. Valesco Industries)
No Data Alpharetta, GA 3/29/16 No Data Mngt. Buyout Commercial printing Link
Graphic Packaging $4,160 Atlanta, GA Metro Packaging & Imaging No Data Wayne, NJ 3/29/16 No Data Acquisition Folding cartons Link
Ennis $581.0 Midlothian, TX  Major Business Systems No Data Hillsborough, SC 3/22/16 No Data Acquisition Forms manufacturing Link
Digital First Media
(Port co. Alden Global Capital)
No Data Denver, CO Freedom Communications No Data Santa Ana, CA 3/20/16 $52.3 363 Sale in Ch. 11 Newspaper publishing Link
Lindenmeyr Munroe
(Div. Central National Gottesman)
$5,500 Purchase, NY C.J. Duffey Paper Company No Data Minneapolis, MN 3/21/16 No Data Acquisition Paper distribution Link
International Paper $2,236 Memphis, TN Holmen Paper - Newsprint Mill No Data Madrid, Spain 3/16/16 $150.0 Acquisition Paper mill Link
Konica Minolta $9,180 Tokyo, Japan Meridian Imaging Solutions No Data Alexandria, VA 3/15/16 No Data Acquisition Managed print & IT services Link
Xiamen Bridge Hexing Equity No Data Shenzhen, China International Paper - Corrugated
Division, China/Southeast Asia
$2,236 Memphis, TN 3/14/16 $200.0 Acquisition Corrugated packaging Link
(Div. Deluxe)
No Data Groton, MA Birchcraft Studios No Data Rockland MA 3/10/16 No Data Acquisition Social stationery Link
Postal Center International No Data Fort Lauderdale, FL Original Impressions No Data Miami, FL 3/10/16 No Data Acquisition Commercial printing Link
Coveris - Imagenet Division
(Port. co. Sun Capital Partners)
$2,759 Chicago, IL Rivendell Europe No Data Leeds, UK 3/7/16 No Data Acquisition Photo/retouching studio Link
CCL Industries $3,040 Toronto, ON Powerpress Rotulos $6.5 Sao Paolo, Brazil 3/7/16 $10.3 Acquisition Labels Link
Ingram Content Group No Data La Vergne, TN Perseus - Distribution Group No Data New York, NY 3/3/16 No Data Acquisition
(Greenhill & Co)
Publisher services Link
(Port. co. Sun Capital Partners)
$2,759 Chicago, IL Supraplast No Data Guayaquil, Ecuador 3/3/16 No Data Acquisition Packaging printing Link
(Port co. American Ind. Partners)
No Data Hudson, NH Anocoil No Data Rockville, CT 3/3/16 No Data Acquisition Printing plates Link
Electronics for Imaging (EFI) $882.5 Foster City, CA Rialco $11.3 Bradford, UK 3/2/16 No Data Acquisition Sublimation dye powders Link
Orora $2,768 Hawthorn,
IntegraColor No Data Dallas, TX 3/1/16 $77.0 Acquisition Retail display & packaging Link
(Div. Koch Industries)
No Data Atlanta, GA Excel Displays & Packaging No Data Aurora, IL 3/1/16 No Data Acquisition
Retail display & packaging Link

2016 March - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries

Filing Party

($Mil )

Case #

Filing Party Address


Region & City


Attorney for Debtor

Chapter 11 Filings:
No Chapter 11 Filings Found this Month --- --- --- --- --- --- --- --- ---
Chapter 7 Filings:
Vista Exhibits Inc 3/29/16 No Data 16-11620 Las Vegas, NV 9th Nevada
Las Vegas
Mike K. Nakagawa Michael M. Lin Trade show exhibits

2016 March - 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


Madison Paper Industries
(JV - UPM & Northern SC Paper)
May-16 No Data Madison, ME UPM Helinski, Finland 3/14/16 Paper manufacturing Link
Advanced Printing 3/24/16 No Data Pleasanton, CA None N/A 3/5/16 Commercial & packaging printing Link
P-Tech Print & Mail 3/23/16 No Data Concord, ON None N/A Mar-16 Commercial printing Link
Cain Lithographers 4/28/16 No Data Jackson, MS None N/A Mar-16 Commercial printing Link