Saturday, October 7, 2017

Print Supply Chain Consolidation – September 2017 M&A Activity


Barry-Wehmiller may not be a familiar name in the printing industry, but nonetheless this serial acquirer is clearly committed to the business of putting ink on paper. Behind the scenes, the company now owns many of the manufacturers that make the machines required to sheet, convert, fold, palletize, corrugate, prep for mailing, and pack paper into useful products. Embarking in 1987 on a strategy to provide manufacturing technology for the packaging, corrugating, sheeting and paper-converting industries, the privately-held US company is now a $2.8 billion global organization with 11,000 employees. 

While the industry is rocked by a seemingly constant stream of game-changing consolidations (more on that next month), Barry-Wehmiller continues to rack up its own steady stream of acquisitions of print technologies and machinery, announcing in September the purchase of Graphbury Machines through its Pennsylvania-based division, Paper Converting Machine Company. The acquired company makes machines that use lasers to clean anilox rollers in flexo printing operations.

BW Forsyth Partners, a partnership of Barry-Wehmiller and a team of private equity investors, announced two acquisitions, also in September, through its portfolio company Baldwin Technology. (The Baldwin name is likely much more familiar to printers who know Baldwin from its aftermarket sprayers, fountain solution circulators, UV and IR drying systems, and web process controls.) The acquisition of Ahlbrandt Systems adds web treatment equipment to its lineup, followed up by the addition of print inspection systems with the purchase of PC Industries, located in Gurnee, Illinois.


The Supply Chain – Equipment and Material Inputs

Looking back over the past twelve months, M&A activity, as reported in The Target Report, has been robust among those companies that support the printing, packaging and related industries with the equipment, materials and supplies needed every day to manufacture printed products. We noted 47 deals on the input side of the supply chain in our deal log, with the majority being manufacturers of materials. Transactions in which the acquired company was an equipment manufacturer were about even with acquisitions of distributors.




Equipment Manufacturers

As one would expect in the printing industry, the majority of acquisitions in the equipment segment over the past twelve months are in some way related to the traditional workhorse of the industry, the printing press. Also, as the initial wave of inkjet technologies matures, makers of flatbed inkjet devices have become attractive targets. M&R Companies, a portfolio company of Corinthian Capital, expanded beyond its core competency manufacturing screen printing equipment with the purchase of Novus Imaging, the New Hampshire-based manufacturer of digital flatbed and roll-to-roll UV inkjet printers.

As noted above, Barry-Wehmiller recently acquired a print quality control company. During the past year, another print quality control company, Advanced Vision Technology was purchased by another acquisition-driven private company, Danaher (see The Target Report – March 2017).



Earlier this year, Barry-Wehmiller, through its Winkler + D√ľnnebier subsidiary, acquired Halm Industries, the maker of the ubiquitous Halm Jet Press, for decades the press used to print millions and millions of pre-converted envelopes.

Altor Funds, a private equity fund based in Copenhagen, acquired the TRESU Group from another fund in a secondary buyout (for more on secondary buyouts see The Target Report – October 2016). The acquired company is a manufacturer of high performance flexographic printing presses, primarily used to print packaging. Indicative of the rise of flexographic printing as a serious contender for printing high-quality packaging, the largest number of deals involving equipment in the past year have involved flexo. 




Material Manufacturers

Deal activity has been robust in the materials segment, with the majority of the deals involving inks, including pigments, colorants and coatings. Large companies have repeatedly acquired small innovative companies for their specialty inks developed for specialty applications such as fabric printing, UV-cured inks, electro-conductive inks and digital printing. For example, Sun Chemical, a division of Japan-based Dainippon Ink & Chemicals, acquired RJA Dispersions, a maker of high-quality pigment dispersions used in digital printing.

Closely behind transactions involving ink manufacturers, in terms of numbers of deals, are acquisitions of companies that manufacture papers. If we had included bankruptcies and plant closures in our counts, then paper deals would have been the majority. It’s clear that one of the primary reasons for deals in the paper manufacturing segment is shrinking demand for paper, with two more mills closing in the past year, Southworth Company in Agawam, Massachusetts and the PaperWorks mill in Philadelphia.
Southworth subsequently filed Chapter 11 bankruptcy at the end of September.


As with the breakdown of equipment manufacturers by printing process, when we drill down into the deals involving ink, we find that in the past twelve months the lead in terms of deal count is again the flexographic printing process. 




Distributors of Printing Supplies

The consolidation in the paper distribution business has been at a steady drumbeat for the six years that we have been researching and writing The Target Report.* Lindenmeyr Munroe, a division of privately-held Central National Gottesman, acquired paper distributor Independent Paper Group in St. Paul, Minnesota. In keeping with the times, and the growth of wide format printing, Lindenmeyr also acquired a distributor of wide format supplies, KFI Technology based in Trenton, New Jersey. 




*This edition of the TR marks six years since we published the first Target Report deal log and commentary, and published every month thereafter.


2017 September - 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
Release
Chartpak No Data Leeds, MA W.G. Fry No Data West Springfield, MA 9/29/17 No Data Acquisition Paper converting & binding Link
C.J. Group of Companies No Data Toronto, ON Annan & Sons No Data Toronto, ON 9/29/17 No Data Acquisition Commercial printing Link
Grimco No Data Fenton, MO Advantage Sign & Graphic Solutions No Data Hudsonville, MI 9/26/17 No Data Acquisition Graphic supplies distributor Link
Southeastern No Data Stuart, FL Dutton Press No Data Hialeah, FL 9/25/17 No Data Acquisition Commercial printing Link
Raycom Media No Data Montgomery, AL Community Newspaper Holdings No Data Montgomery, AL 9/25/17 No Data Merger Regional & local newspapers Link
Phoenix Color
(Div. ALJ Regional Holdings)
No Data Hagerstown, MD Moore-Langen Printing
(Div. LSC Communications)
No Data
($3,540)
Terre Haute, IN 9/21/17 No Data Acquisition Book components Link
Vanguard Digital Printing Systems No Data Suwanee, GA Inkjet Technology No Data Fort Worth, TX 9/21/17 No Data Acquisition Flatbed inkjet printers Link
Baldwin Technology
(Port co. BW Forsyth Capital)
$103.7 St. Louis, MO PC Industries No Data Gurnee, IL 9/18/17 No Data Acquisition Print inspection systems Link
Paper Converting Machine Co.
(Div. Barry-Wehmiller)
No Data
($2,800)
Green Bay, WI Graphbury Machines No Data Green Bay, WI 9/18/17 No Data Acquisition Flexo press accessories  Link
Integ No Data Waco, TX Insite Group No Data Bryan, TX 9/13/17 No Data Acquisition Commercial printing Link
Binkley Co. No Data Anchorage, AK Alaska Dispatch News No Data Anchorage, AK 9/11/17 $1.0 363 Sale in Ch. 11 Newspaper publisher Link
Baldwin Technology
(Port co. BW Forsyth Capital)
$103.7 St. Louis, MO Ahlbrandt System No Data Lauterbach, Germany 9/8/17 No Data Acquisition Web treatment equipment Link
LSC Communications $3,540 Chicago, IL Publishers Press $185.0 Shepardsville, KY 9/7/17 No Data Acquisition Magazine printing & services Link
Tronc $1,540 Chicago, IL New York Daily News No Data New York, NY 9/5/17 One Dollar Acquisition Metro newspaper Link
ProAmpac
(Port co. Pritzker Group)
No Data Cincinnati, OH PolyFirst Packaging No Data Hartford, WI 9/5/17 No Data Acquisition Pouches, bags & roll stock Link
NAPCO No Data Sparta, NC Vulcan Information Packaging
(Sub. EBSCO Industries)
No Data Vincent, AL 9/1/17 No Data Acquisition Presentation products Link
Wise  No Data Alpharetta, GA Datatel Resources No Data Monaca, PA 9/6/16 No Data Acquisition
(Corp Dev w/ GAA)*
Business forms Link


2017 September - 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:
Southworth Company 9/28/17 No Data 17--30817 Agawam, MA 1st Massachusetts
Springfield
Elizabeth D. Katz Joseph B. Collins  Specialty papers
Edwards Mail Service, Inc. 9/17/17 No Data 17-50235 Lubbock, TX 5th Northern TX
Lubbock
Robert L. Jones David L. Campbell  Mail logistics
Chapter 7 Filings:
Printgraphix, Inc. 9/6/17 No Data 17-13340 Pembroke, MA 1st Massachusetts
Boston
Melvin S. Hoffman Amy Lee Lipman-White  Commercial printing


2017 September - 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
Graphic Packaging Dec-17 No Data Santa Clara, CA Graphic Packaging Atlanta, GA 6/21/17 Coated recycled paper mill Link
Parrot Press Dec-17 No Data Fort Wayne, IN None N/A Sep-17 Commercial printing Link
Gannett - Printing facility 10/4/17 No Data Wausau, WI Gannett McLean, VA Sep-17 Consolidating newspaper printing Link
Gannett - Printing facility 10/4/17 No Data Waupaca, WI Gannett McLean, VA Sep-17 Consolidating newspaper printing Link

* Graphic Arts Advisors, publisher of The Target Report, in conjunction with Corporate Development Associates, served as exclusive advisors to Datatel in this transaction.