Wednesday, July 3, 2013

Is the Commercial Printing Industry Ripe for Another Wave of Consolidation? – June 2013 M&A Activity

Consolidation in the commercial print space heated up in June. Of special note, at least to me as the former owner of a commercial printing company, is the return of Consolidated Graphics (CGX) to the deal table. The company announced that it is acquiring Universal Printing Company in St. Louis, Missouri. CGX, arguably the most successful of the consolidators that rolled through the commercial printing industry in the 1990’s, has been absent from our deal log in the two years since we started The Target Report. Could this latest transaction be a signal that owners of commercial printing operations that are well managed can expect valuations to improve and/or that those owners’ expectations of value have reached equilibrium with buyers’ willingness to pay?

There were two commercial printing transactions in the Philadelphia area: Intelligencer Printing acquired Lancaster Ultra-Graphics, and Phoenix Lithographing merged with its neighbor, Innovation Printing. Midstates Printing in Aberdeen, North Dakota was the successful bidder in the 363 sale process in the Chapter 11 bankruptcy of Jacob North Printing in Lincoln, Nebraska. On the smaller end of the scale, two separate members of the Allegra franchise family, one in Urbandale, Iowa and the other in Winston-Salem, North Carolina, were successful in their effort to acquire local small commercial printing and copying shops.

Over the past several years, large print management firms have assumed the task of sourcing and procuring the printing for many large corporations. Taking advantage of the endemic overcapacity in the commercial print industry, these print management firms often introduce a hyper-competitive purchasing process, replacing the existing long term relationship between a printer’s key corporate customer and its sales representative. We expect that as the over capacity gets wrung out of the industry, there will be fewer opportunities for these firms to beat down the printers’ price, and as their own margins get squeezed, the print management firms will head upstream to design and content creation where margins may be greater. Innerworkings, one of the most successful print management firms, has taken another step in that direction with its acquisition of Professional Packaging Services headquartered in Bradford, UK. The acquired company designs high end packaging on behalf of its clientele, outsourcing all final manufacturing.

The shakeout in the paper products industry continues. Xerox shed its European business, selling the rights to market Xerox branded paper to Antalis, a huge distributor of paper products globally, except in the US. This follows the sale of Xerox’s North American paper business to Domtar, the Canadian paper manufacturer. In the label stock business, Drytac purchased Multi-Tac, both manufacturers of adhesive-based paper products. Brookfield Asset Management sold its interest in Longview Fibre Paper & Packaging to Kapstone Paper & Packaging. With Longview’s mills in the Pacific Northwest, Kapstone now has a national footprint in the brown kraft and containerboard paper products sectors.

Continuing a trend we have seen over the past year, Bangor Publishing Co, publisher of the Bangor Daily News in Maine, is closing its printing operation, agreeing to outsource its future printing to the Sun Media Group in Lewiston, Maine. As page and circulation counts continue to fall, this outsourcing trend is likely to continue; the stronger firms that have invested in more efficient operations will pick up the printing contracts from the ones that have been unable or unwilling to upgrade their print operations.

The owners of Benchemark Printing, a commercial printing company in upstate New York, moved into the business of creating news content, purchasing a local daily newspaper in a transaction that included several weekly community papers. It’s hard to see the strategic fit in this deal, since the printing equipment used in the commercial printing business is completely different from presses used to print newspapers.

It appears that Mitsubishi Heavy Industries is throwing in the towel in the press manufacturing business, forming a joint venture with the much smaller Ryobi, which also makes mostly smaller presses. The new venture will be named Ryobi MHI Graphic Technology; Ryobi will have controlling interest. It remains to be seen if the Mitsubishi nameplate will disappear, but if it does it will be missed by many (including me, as two of my personal favorite printed pieces were produced on a Mitsu at a shop where I served as EVP in the early 90’s).

Two other transactions, while not directly related to printing, also caught our interest in June. Adobe Systems, the undisputed standard in graphic design software, moved further into marketing and data analytics with its acquisition of Neolane, a French company that offers software that integrates online and offline cross-channel marketing data. And finally, even though I’m personally struggling to see how the printing industry will be impacted by “3D printing,” which is really specialized manufacturing, it’s worth a mention that MakerBot, the manufacturer of the low cost desktop 3D printing machines, was acquired by Stratsys, the heavy weight company in high end 3D printing machines. Will printing companies who have developed expertise in the application of inkjet printing, find a fit for 3D printing that is applicable to their client base?

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

2013 June - 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


Allegra No Data Winston-Salem, NC Sun Printing Company No Data Winston-Salem, NC 6/30/13 No Data Acquisition Printing & copying Link
Adobe Systems $4,250 San Jose, CA Neolane No Data Paris, France 6/27/13 $600.0 Acquisition Cross-channel analytics Link
Drytac No Data Richmond, VA Multi-Tac No Data Toronto, CN 6/27/13 No Data Acquisition Adhesive coated products Link
Stratasys $359.0 Eden Prairie, MN MakerBot No Data Brooklyn, NY 6/20/13 $403.0 Acquisition Desktop 3D printing machines Link
Intelligencer Printing No Data Lancaster, PA Lancaster Ultra-Graphics No Data Landisville, PA 6/25/13 No Data Acquisition Digital printing Link
Midstates Printing No Data Aberdeen, ND Jacob North Printing No Data Lincoln, NE 6/25/13 $1.35 363 Sale in Ch. 11
(Equity Partners CRB)
Commercial printing Link
Ryobi Limited
(Ryobi MHI Graphic Technology)
$2,015 Hiroshima, Japan Mitsubishi Heavy Industries
(Printing & Packaging Machinery)
$34,321 Tokyo, Japan 6/20/13 No Data Merger Press Manufacturing Link
Antalis € 2,700 Billancourt, France  Xerox
(Paper & Print Media Unit)
$22,400 Norwalk, CT 6/19/13 No Data Acquisition Paper distribution Link
Fort Dearborn No Data Elk Grove Village, IL AC Label
(AKA St. Louis Litho & St. Louis PS)
No Data St. Louis, MO 6/18/13 No Data Acquisition Product labels Link
Consolidated Graphics $1,045 Houston, TX Universal Printing Company No Data St. Louis, MO 6/19/13 No Data Acquisition Commercial printing Link
Phoenix Lithographing No Data Philadelphia, PA Innovation Printing No Data Philadelphia, PA 6/13/13 No Data Merger Commercial printing
(combined $100Mil revenue)
Kapstone Paper & Packaging $1,217 Northbrook, IL  Longview Fibre Paper & Packaging $831.0 Longview, WA 6/11/13 $1,025 Acquisition Packaging papers Link
Port Jackson Media
(AKA Benchemark Printing)
No Data Schenectady, NY Amsterdam Recorder No Data Amsterdam, NY 6/10/13 No Data Acquisition Daily & weekly newspapers Link
Innerworkings $800.0 Chicago, IL Professional Packaging Services $44.0 Bradford, UK 6/7/13 No Data Acquisition Packaging design & sourcing Link
Bernard Group ESOP No Data Chaska, MN Bernard Group
No Data Chaska, MN 6/5/13 No Data ESOP Online printing services Link
Allegra Marketing No Data Urbandale, IA The Printing Station No Data Des Moines, IA 6/3/13 No Data Acquisition Wide format & marketing Link
Electronics for Imaging (EFI) $652.1 Foster City, CA GamSys Software No Data La Reid, Belgium 6/3/13 No Data Acquisition MIS systems for printing Link

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

Filing Party

($Mil )

Case #

Filing Party Address


Region & City


Attorney for Debtor

Chapter 11 Filings:
DPS Converting, Inc. 6/27/13 No Data 13-63912 Atlanta, GA 11th Northern GA
Wendy L. Hagenau  W. Kevin Snyder  Paper sheeting & rewinding
NE Opco, Inc.
(DBA National Envelope)
6/10/13 No Data 13-11483 Frisco, TX 3rd Delaware
Christopher S. Sontchi Paul Noble Heath  Envelope manufacturer
Chapter 7 Filings:
Avid Digital LLC 6/22/13 No Data 13-15376 Mission Viejo, CA 9th Central CA
Santa Ana
Erithe A. Smith Michael G David  Grand and large format printing
Copy-Rite Press 6/7/13 No Data 13-25058 Alhambra, CA 9th Central CA
Los Angeles
Thomas B. Donovan Jeffrey A Kopczynski  Commercial printing

2013 June - 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


Bangor Publishing Co. Sep-13 No Data Hampden, ME Sun Media Group
(Gained printing contract)
Lewiston, ME 6/28/13 Newspaper outsourcing print operations Link