Sunday, July 6, 2014

It’s about Time – June 2014 M&A Activity

The newest old company, Time Inc., was very busy in June. The venerable publisher of magazines, including household names such as Time, Fortune, People, and Sports Illustrated, was spun off from Time Warner, separating the aging print-centric parent from its progeny’s profitable entertainment and programming businesses. As its retirement gift, the new Time Inc. has been saddled with $1.3 billion of debt, as well as responsibility for a group of underperforming British magazines. With more than 90 titles in print, Time Inc. is challenged by the continuing and steady decline in magazine circulation which in turn has driven revenue down for 22 of the last 24 quarters.

Prompted by Time Inc.’s decision to cut off shipment of its magazines, magazine wholesaler Source Interlink Distribution filed Chapter 11 bankruptcy in June, announcing that the company will cease operations. Time Inc. apparently had good reason to withhold further shipments, reporting that it will be unable to collect $26 million due from Source Interlink. As Time Inc. switches to another distributor, it will likely lose sales and possibly readership loyalty as its newsstand slots sit empty for up to 12 weeks.

Time Inc. wasted no time in diversifying away from the legacy print business, announcing on June 2nd that it was acquiring Cozi. The Seattle-based company is a purely digital company that offers a mobile app and website that families use to coordinate shopping, schedules and to-do lists. No print involved.

Time Inc. wrapped up the month by divesting its Latin-American subsidiary, magazine publisher Grupo Expansión. Headquartered in Mexico City, with 16 titles in print, the company was purchased by Southern Cross Group, a private equity firm with investments throughout Central and South America.

In my recent article in NAPL’s new publication, Bottom Line, “M&A: Still a Buyer's Market?” I postulated that the market for commercial printing companies is improving and smart buyers with well-defined strategies are returning to the market, and that we may be at an inflection point between a buyer’s and seller’s market. Recent transactions suggest that acquirers of companies in the commercial printing segment may be less reliant on the “tuck-in” growth strategy, in which a healthy commercial printer picks up the sales of a distressed printer on a pure earnout basis, leaving the seller to close down operations and sell off the excess equipment.

In a transaction that appears more strategic than predatory, two commercial printing/mailing companies in the Seattle area with combined revenues in excess of $50 million, DCG West and CCS Printing, announced that they are joining forces, moving into a new 140,000 square-foot facility, and re-branding the new entity as DCG ONE. In another separate transaction in the Pacific Northwest region, Wright Business Graphics, based in Portland, Oregon acquired Sunset Press in Kent, Washington. Both companies sell only to the trade, and the combined operations reportedly will have $55 million in revenues.

Despite recent positive signs in the commercial printing segment, the “tuck-in” is not completely dead, and commercial printing companies continue to seek out opportunities to absorb the sales of smaller companies. Cedar Graphics in Hiawatha, Iowa tucked-in the sales of local competitor The Brandt Company which itself ceased operations. In a deal put together by my firm, the NAPL Business Advisory Group, J.S. McCarthy of Augusta, Maine, purchased the customer base and certain assets of Printech, a commercial printer located in Stamford, Connecticut.

German printing press manufacturer Heidelberg is not about to be outdone by its compatriot KBA’s foray last year into the market for manufacturing presses designed primarily to produce packaging. As reported in The Target Report deal log for December 2013, KBA purchased Italian press manufacturer Flexotecnica, which makes flexographic printing presses used for printing flexible packaging. KBA also announced at that same time its purchase of Kammann Maschinenbau, the German manufacturer of screen printing presses used to print directly onto glass containers. Heidelberg jumped into the flexo fray in June, announcing that it has acquired Gallus, the Swiss manufacturer of narrow-width flexographic presses. The battle for press supremacy, still ongoing and fought brilliantly by KBA in the offset press arena where Heidelberg once reigned supreme, moves to round two with flexographic presses.

Block Communications shuttered two downtown newspaper print operations. The company’s Pittsburgh Post-Gazette will be printed at a newly leased 245,000 square-foot facility outfitted with new printing equipment. Block’s Ohio paper, The Blade of Toledo, will be outsourced to a yet-to-be-announced more efficient plant that is within distance to meet the daily schedule, consistent with the trend occurring throughout the newspaper industry. Phoenix Media Communications in Boston announced the closure of newspaper and circular printer Mass Web Printing in Auburn, Massachusetts. The Seventh-day Adventist church is closing its Hagerstown, Maryland printing company, transferring the printing to its west coast printing operation in Nampa, Idaho.

The Free Lance-Star in Fredericksburg, Virginia, is back on our deal log, now exiting its Chapter 11 bankruptcy in a 363 asset sale to distressed debt fund Sandton Capital Partners. In addition to the paper and radio stations, the purchase included the Print Innovators division which prints the newspaper, circulars and commercial printing products.

2014 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


Cedar Graphics No Data Hiawatha, IA The Brandt Co. No Data Davenport, IA 6/27/14 No Data Tuck-in of sales Commercial printing Link
DCG West
(Re-branded DCG One)
No Data Seattle, WA CCS Printing No Data Bellevue, WA 6/27/14 No Data Acquisition Commercial printing
(combined $50 Mil revenue)
Southern Cross Group No Data Mexico City,
Grupo Expansión
(Sub. Time Inc.)
No Data New York, NY 6/26/14 No Data Acquisition Magazine publisher (Mexico) Link
Kyle & Jonette Spencer No Data Helena, MT Allegra Print & Imaging No Data Helena, MT 6/22/14 No Data Acquisition Commercial printing Link
(Div. Koch Industries)
No Data Atlanta, GA SPG Holdings No Data Green Bay, WI 6/19/14 No Data Acquisition Specialty paper products Link
Sandton Capital Partners No Data New York, NY Free Lance-Star Publishing
Print Innovators
No Data Fredericksburg, VA 6/19/14 $30.2 363 Sale in Ch. 11 Community newspaper
Commercial printer
Hilex Poly No Data Hartsville, SC Duro Bag Manufacturing No Data Florence, KY 6/17/14 No Data Acquisition Retail paper bags Link
Wright Business Graphics $55.0 Portland, OR Sunset Press No Data Kent, WA 6/16/14 No Data Asset acquisition Commercial printing Link
Heidelberg € 2,450 Heidelberg,
Gallus Holding No Data St. Gallen,
6/10/14 CHF 125.0 Acquisition Flexo & screen presses Link
Time Inc. $3,354 New York, NY Time Warner $30,040 New York, NY 6/6/14 $2,570 Divestiture Magazine publishing Link
Pierre Little and
London Publishing
No Data Toronto, ON Machias Valley News Observer No Data Machias, ME 6/5/14 No Data Acquisition Community newspaper Link
Wasserstein & Co. No Data New York, NY ALM Media No Data New York, NY 6/5/14 $417.0 Acquisition Publisher of legal journals Link
A&B Printing No Data Las Vegas, NV Midnight Printing No Data N. Las Vegas, NV 6/5/14 No Data Acquisition Commercial printing Link
Neenah Paper $856.4 Alpharetta, GA Crane Technical Materials
(Sub. Crane & Co.)
$50.0 Pittsfield, MA 6/5/14 $72.0 Acquisition Filtration papers Link
Konica Minolta $8,627 Tokyo, Japan Copytronics No Data Jacksonville, FL 6/5/14 No Data Acquisition Managed Print Services Link
Victory Packaging No Data Houston, TX Network Packaging
(aka NetPac)
No Data Denver, CO 6/4/14 No Data Acquisition Packaging distributor Link
Ennis $545.2 Midlothian, TX Sovereign Business Forms $27.1 Houston, TX 6/4/14 No Data Acquisition Business forms Link
(BW Papersystems)
No Data Phillips, WI Kugler-Womako
(Div Körber Papersystems)
No Data Nürtingen,
6/3/14 No Data Acquisition Finishing equipment
(combined $370 Mil revenue)
(BW Papersystems)
No Data Phillips, WI Pemco
(Div Körber Papersystems)
No Data Sheboygan, WI 6/3/14 No Data Acquisition Paper sheeting equipment
(combined $370 Mil revenue)
(BW Papersystems)
No Data Phillips, WI E.C.H. Will
(Div Körber Papersystems)
No Data Wedel, Germany 6/3/14 No Data Acquisition Paper sheeting equipment
(combined $370 Mil revenue)
Mondi Group $8,870 Addlestone,
England, UK
Bag & Kraft Paper Business (US)
(Sub. Graphic Packaging International)
$437.0 Atlanta, GA 6/3/14 $105.0 Acquisition Paper bags & kraft paper Link
J.S. McCarthy No Data Augusta, ME Printech No Data Stamford, CT 6/3/14 No Data Asset acquisition
(NAPL, Advisory Group)
Commercial printing Link
Time Inc. $3,354 New York, NY Cozi No Data Seattle, WA 6/2/14 No Data Acquisition Mobile app Link
ASG, AGI-Shorewood Group No Data Stamford, CN Folding Carton Business
(Div MeadWestvaco)
No Data Bydgoszcz, Poland 6/2/14 No Data Acquisition
(Deloitte Corp Finance)
Cosmetic packaging Link

2014 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:
Source Interlink Distribution 6/23/14 14-11557 Bonita Springs, FL 3rd Delaware
Kevin Gross Pauline K. Morgan Magazine wholesale distributor
Chapter 7 Filings:
No Chapter 7 Filings Found this Month --- --- --- --- --- --- --- --- ---

2014 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


The Brandt Co. Jun-14 No Data Davenport, IA None N/A 6/27/14 Commercial printing Link
Barton Nelson Jun-14 No Data Kansas City, MO None N/A 6/19/14 Specialty advertising pads and notes Link
Mass Web Printing 7/3/14 No Data Auburn, MA Phoenix Media Communications Boston, MA 6/24/14 Newspaper & circular printing Link
Herald Publishing Association TBD No Data Hagerstown, MD Seventh-Day Adventist Silver Spring, MD  6/24/14 Transferring print to Pacific Press Publishing Link
Quad Graphics - Printing Facility Dec-14 No Data Woodstock, IL Quad Graphics Sussex, WI  6/16/14 Formerly Brown Printing facility Link
Quad Graphics - Printing Facility Aug-14 No Data St. Cloud, MN Quad Graphics Sussex, WI  6/16/14 Formerly World Color facility Link
Blade of Toledo Aug-14 No Data Pittsburgh, PA Block Communications Toledo, OH 6/3/14 Outsourcing print operations to TBD Link
Pittsburgh Post-Gazette Aug-14 No Data Pittsburgh, PA Block Communications Toledo, OH 6/3/14 Transferring print operations to new plant Link
Evolution Impressions Jun-14 No Data Rochester, NY Evolution Events Rochester, NY 6/2/14 Commercial printing Link