The Target Report: Leading-Edge Printers Acquire Content Management Companies

Tuesday, March 4, 2014

Leading-Edge Printers Acquire Content Management Companies – February 2014 M&A Activity

Innovative printers, large and small, continue to invest in software companies that manage, create, repurpose, format and deliver informational content. These innovative companies are not choosing between print or e-delivery channels. They are enabling delivery of their customers’ content to any one of a multitude of output devices; the ultimate consumer views that content on a device of their own choosing, including ink-on-paper.

RR Donnelley acquired MultiCorpora, a Canadian-based company that provides language translation software. A review of RR Donnelley’s corporate “About” statement and company website indicates how far the largest US printer has evolved from providing primarily printing services. This latest acquisition adds to the company’s ability to assist customers to process and deliver content where, how, and when it will be most effective, including via a wide variety of printed products.

At the other end of the scale in terms of size, Thomson-Shore, an employee-owned company in Michigan that specializes in printing books, appears to be shifting gears to take advantage of the growing importance of self-publishing in the book printing industry. The company acquired PublishNext and its subsidiary, Seattle Book Company. PublishNext is an online service that assists authors to self-publish their own work by providing design, editing and other services. The result is books that look professional and can compete in the market against books published by the big name publishing houses. The Seattle Book Company adds marketing and distribution services to the mix for those self-publishers. The final composed book can be printed using traditional offset, or stored digitally, marketed online, delivered as an e-book or output on a digital press, bound and delivered on demand.

Vistaprint, the online printing service, acquired People & Print Group in the Netherlands. People & Print Group uses online branded websites to acquire print volume that is based on more traditional file uploads, rather than from templates which is the basis for Vistaprint’s tremendous growth. Vistaprint has grown to sales in excess of $1.2 billion by catering to very small businesses with orders averaging less than $41 each. Vistaprint used online templates and factory automation to disrupt and dominate the business of printing business cards. Will the company also use software to succeed in the “high-touch” business of printing custom orders from customer-supplied files?

CodeMantra, a pure software play in the digital publishing space, was acquired by an unnamed Boston-based investment group, providing management expertise and additional capital. The company’s software enables publishers to create, format, manage, update and distribute informational content to devices in a platform-agnostic environment. One of those platforms is print.

The packaging sector was once again active. Graphic Packaging Holding Co, a global company with headquarters in Atlanta, Georgia, purchased the Benson Group, a manufacturer of folding cartons in the UK. The transaction multiple was reported at 6.6 times EBITDA, equating to a healthy purchase price of 83% of trailing revenue. In another transaction earlier in the month, Graphic Packaging divested its heat transfer label division, Di-Na-Cal Decorative Labels & Systems. The buyer was Multi-Color Corporation, one of the most active acquirers in packaging. Hood Packaging in Madison, Wisconsin, acquired the Bemis Paper Packaging Division, a manufacturer of multi-wall flexible packaging.

Newspapers continue their struggle to stay relevant in the midst of circulation declines and commensurate cuts in editorial staff. The Baltimore Sun Media Group is acquiring the alternative free weekly City Paper, and plans to consolidate operations as it prepares for the planned spinoff of its own parent, the Tribune Co., which in turn is shedding its entire print media portfolio to focus on its TV stations, cable networks and online businesses. Gannett Publishing Services, the printing arm of the Gannett publishing company, announced that it is closing The Advocate printing plant in Newark, Ohio, and moving the production to its plant in Columbus, Ohio. These moves are consistent with our previously noted newspaper industry trend to consolidate printing operations for several papers in one facility.

2014 February - 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

RR Donnelley

$10,480

Chicago, IL

MultiCorpora

No Data

Gatineau QC

2/27/14

No Data

Acquisition

Translation software

2014 February - 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
The Advocate - Printing Facility	May-14	No Data	Newark, ,OH	Gannett Publishing Services (Sub Gannett Co.)	McLean, VA	2/28/14	Transferring print operations to Columbus, OH	Link

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Tuesday, March 4, 2014

Leading-Edge Printers Acquire Content Management Companies – February 2014 M&A Activity

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