Sunday, October 7, 2012

Has the “Strategy du Jour” Run its Course for Commercial Printers? – September 2012 M&A Activity

September was a tough month for the printing and related industries. After a very quiet summer, there were several Chapter 11 bankruptcies, spanning the commercial, wide format and newspaper sectors.

I have been wondering when the expansion into wide format printing by so many commercial printers would catch up with the industry. Formerly a niche offering served by specialty shops, adding wide format capabilities has become the “strategy du jour.” This approach has been touted in industry publications and enabled by increasingly sophisticated, but easy to use, inkjet devices. We have noted several small sign shops that closed over the past year and, in September, a much larger player in the wide and grand format business developed corporate indigestion. Image Transform, located in Des Moines, Iowa, filed for Chapter 11 after more than 35 years draping buildings, wrapping buses and serving up all sorts of wide format products.

The Journal Register Company, publisher of multiple newspapers, filed Chapter 11 for the second time in just four years, also affectionately known in bankruptcy circles as a “Chapter 22.” Several publishers that are related to the Journal Register Company also filed for bankruptcy (we only listed the parent company in the deal log). The company reports that it has a “stalking horse” credit bid lined up, and that it expects to emerge from bankruptcy this time as a healthy company. Another publisher, Rural Newspapers, headquartered in Tennessee and much smaller than the Journal Register Company, gave up and filed for Chapter 7 liquidation. In another transaction indicative of the ongoing struggle for survival in the newspaper industry, White Birch Paper Company, maker of newsprint paper, announced that it had completed its restructuring with the support of private equity fund Black Diamond Capital. Vertis, the financially challenged publisher of ubiquitous newsprint advertising inserts, monetized non-core assets and sold SGS International, its prepress company that specializes in packaging.

Our research found two commercial printers that voluntarily filed for protection of the bankruptcy court, hoping to wash away their debt and emerge cleansed and ready to compete once again. Two small commercial printers threw in the towel and filed for liquidation under Chapter 7. In a move that reportedly surprised its employees, Finlay Printing, a highly respected commercial printer in Bloomfield, Connecticut, washed out and closed its doors after more than 135 years in business.

In separate deals that do not appear to be distress acquisitions, two packaging printers acquired non-packaging companies, adding new services. Private equity-backed industry powerhouse WS Packaging Group acquired Business Graphics Printing, a very small commercial printer in Knoxville, Tennessee, reportedly for the company’s product insert printing capabilities. In another transaction, Salem Printing, a flexo commercial and packaging printer, acquired direct mail printer Advanced Direct in Greensboro, North Carolina. 

Continuing the trend towards diversification of services in the printing industry, two deals were announced in which industry-disruptive, print-centric companies acquired firms that offer promotional products. Innerworkings, the wildly successful intermediation company, purchased Merchandize Mania, a UK-based firm which provides corporate promotional merchandise to clients in Europe and Asia. Shutterfly, which identifies itself as the “leading Internet-based social expression and personal publishing service,” bought Penguin Digital. The acquired company uses proprietary apps that enable consumers to order individual personal items printed with images downloaded directly from mobile devices. Although they serve very different markets, one corporate and the other consumer, we see these two companies and their recent acquisitions as prime examples of the new strategies for prospering in printing and related industries.

2012 September - 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


WS Packaging Group No Data Green Bay, WI Business Graphics Printing No Data Knoxville, TN 9/28/12 No Data Acquisition Commercial printing & inserts Link
SGS International No Data Louisville, KY Vertis $1,200 Baltimore, MD 9/20/12 No Data Acquisition - Partial Packaging prepress Link
BD White Birch Investment LLC No Data Greenwich, CT White Birch Paper Company No Data Quebec City, QC 9/18/12 No Data Acquisition Newsprint paper mfg. Link
H.I.G. Europe No Data London, UK Vacumet Paper No Data Franklin, MA 9/17/12 No Data Acquisition Metallized Papers Link
Shutterfly $91.3 Redwood City, CA Penguin Digital No Data New York, NY 9/17/12 No Data Acquisition Promotional items photo app Link
Innerworkings $633.0 San Francisco, CA Merchandise Mania £6.0 UK 9/12/12 No Data Acquisition Promotional items Link
RR Donnelley $10,611 Chicago, IL Express Postal Options No Data Torrance, CA 9/10/12 No Data Acquisition Mailing services Link
Salem Printing No Data Winston-Salem, NC Advanced Direct No Data Greensboro, NC 9/5/12 No Data Acquisition Flexo packaging & direct mail Link
Acme Bookbinding No Data Boston, MA HF Group No Data N. Manchester, IN 9/1/12 No Data Merger Bookbinding Link

2012 September - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries

Filing Party

($Mil )

Case #

Filing Party Address


Region & City


Attorney for Debtor

Chapter 11 Filings:
Ultimate Print Source, Inc. 9/28/12 No Data 12-32250 Ontario, CA 9th Central CA
Mark D. Houle Stephen W. Johnson Commercial printing
Image Transform, Ltd. 9/21/12 No Data 12-02967 Grimes, IA 8th Southern IA
Des Moines
Anita L. Shodeen Michael P. Mallaney  Grand format & display printing
Total Printing Services, Inc. 9/10/12 No Data 12-60540 Van Buren, MI 6th Eastern MI
Walter Shapero Jason Patrick Smalarz Stationary printing
Journal Register 9/5/12 No Data 12-13774 Yardley, PA 2nd Southern NY
New York
Stuart M. Bernstein Neil E. Herman Newspapers & web-based news
Newcomb Print Communications 9/5/12 No Data 12-08042 Harbert, MI 6th Western MI
Grand Rapids
Scott W. Dales Donald C. Darnell Commercial printing
Chapter 7 Filings:
Brasil Printing Corp. 9/25/12 No Data 12-14032 Bronx. NY 2nd Southern NY
New York
Burton R. Lifland Pro Se Printing & copying
Lithographic Technologies, Inc. 9/20/12 No Data 12-15655 Woodbridge, VA 4th Eastern VA
Brian F. Kenney Steven B. Ramsdell Commercial printing
Rural Newspapers, Inc. 9/7/12 No Data 12-08199 Red Boiling Springs, TN 6th Middle TN
Keith M. Lundin Steven L. Lefkovitz Community newspapers