Friday, August 8, 2014

Forbes Lands the Whale – July 2014 M&A Activity

Forbes landed the big fish, achieving an estimated $475 million sale price, after much skepticism that the company could find a buyer that was willing to ante up the $400 million that the company was seeking. The buyer, a Hong Kong-based investor group improbably named Integrated Whale Media Investments, apparently wanted to make sure that this one did not get away. According to Forbes’ own projections that were prepared for prospective buyers and circulated earlier this year, the company estimated that revenues in 2013 would wrap up at $144.6 million with EBITDA of $20.8 million. If true, the reported purchase price represents a whopping multiple of 22.8 times cash flow and more than 325% of trailing revenues. Clearly the global cachet of the Forbes brand was the value driver in this deal, and the price is stunning in comparison to the paltry multiples paid for most publishing companies in recent years. Since the exact terms of the deal are private, maybe it’s all one big fish story…

The newspaper publishing business continues to roil as the major players divest their print-centric operations in favor of other media. E.W. Scripps Company in Cincinnati merged with Milwaukee-based Journal Communications to form a combined broadcasting group with TV and radio stations in 27 markets that reach 18 percent of US homes. The newspaper operations of the two companies were simultaneously jettisoned to form a new company, Journal Media Group, which will publish newspapers in 14 markets. This deal follows on the heels of last month’s spinoff of Time-Warner’s printed publications; last year’s split of Rupert Murdoch’s News Corp. from 21st Century Fox; the just completed spinoff of the Tribune’s newspapers; and the announcement days later that Gannett was splitting in two. The major urban dailies appear to be mere boat anchors holding back the value that can be harvested from media companies when the printed product is thrown overboard.

The smaller fish in the pond, regional newspapers, were actively regrouping and forming new schools of thought. Gatehouse Media purchased the Providence Journal from A.H. Belo, the publisher of two newspapers in Texas that paid handsomely several years ago to enter the New England market. Gatehouse media, which itself was restructured last year in bankruptcy and is now owned by New Media Investment Group, owns and publishes over 450 community publications. Adams Publishing Group, which acquired 34 titles in March, was back in the market, and purchased the assets of Huckle Media in Minnesota, adding 10 more community newspapers to its portfolio. NYC Community Media purchased the Community Newspaper Group which publishes 11 community and special interest newspapers that serve subsets of the larger New York City market. In upstate New York, publisher and printer The Scotsman Media Group, which had announced a management buyout in January, was unable to secure financing and closed its printing operations in two locations.

As we noted earlier this year, consolidation and change continues to affect the business of printing and mailing transactional documents. OSG Billing Services, headquartered in New Jersey, purchased SouthData in Mount Airy, South Carolina. Cathedral Corp in Rome, New York acquired transactional printer AXIS Data Solutions located in Orlando, Florida. In response the same factors driving this trend towards consolidation among transactional printers, Fidelity Investments, the huge financial services company, announced it is closing its own printing and mailing operations in Kentucky and Texas.

Private equity is playing a significant role in the ongoing reduction and rationalization of capacity in the paper manufacturing industry. Peak Rock Capital’s portfolio company, Atlas Paper Mills, acquired a source of recycled fiber for its paper, Accurate Paper Recycling, located in Tampa, Florida. FiberMark, a portfolio company of American Securities, acquired Crocker Technical Papers in Fitchburg, Massachusetts. H.I.G Capital backed a management buyout of Cascades Fine Papers Group, and is bringing back the Rolland brand name, the division’s name before the business was acquired by Cascade. Another Cascade location, the Kraft paper mill in Kingsey Falls, Quebec, was not so lucky and will be permanently closed, ending Cascade’s production of Kraft products. A small mill in eastern Connecticut, Fusion Paperboard, was also unable to economically sustain production and closed.

In the commercial printing segment, SG360° headquartered in Wheeling, Illinois, acquired direct mail printer Lehigh Direct from Visant. SG360° reported that the deal brings its revenues to more than $300 million, and that the combined entity will mail over two billion pieces of mail annually.

2014 July - 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


E.W. Scripps $1,223 Cincinnati, OH Journal Media Communications N/A Milwaukee, WI  7/30/14 No Data Spin-off Newspaper publishing Link
E.W Scripps $822.0 Cincinnati, OH Journal Communications $400.7 Milwaukee, WI  7/30/14 No Data Merger Publishing & broadcast Link
DocuSource $6.0 Morrisville, NC One to One Group $2.0 Sarasota, FL 7/29/14 No Data Acquisition Direct mail Link
FiberMark No Data West Springfield, MA Crocker Technical Papers No Data Fitchburg, MA 7/29/14 No Data Asset acquisition Specialty paper mill Link
OSG Billing Services No Data Englewood, NJ SouthData No Data Mount Airy, SC 7/24/14 No Data Acquisition Transactional printing Link
Levine Leichtman Capital Partners No Data Los Angeles, CA Fastsigns International No Data Dallas, TX 7/22/14 No Data Acquisition
(North Point Advisors)
Sign shop franchisor Link
Gatehouse Media
(Sub. New Media Investment Group )
$586.8 New York, NY Providence Journal
(Sub. A.H. Belo)
No Data Providence, RI 7/22/14 $46.0 Acquisition Community newspapers Link
Electronics for Imaging (EFI) $757.7 Foster City, CA DirectSmile No Data Berlin, Germany 7/21/14 No Data Acquisition Web-to-print software Link
F.P. Horak No Data Bay City, MI TBF Graphics No Data Saginaw, MI 7/18/14 No Data Merger Commercial printing Link
Integrated Whale Media Investments No Data Hong Kong Forbes No Data New York, NY 7/18/14 No Data Acquisition Publishing Link
(sub. Segerdahl)
No Data Wheeling, IL Lehigh Direct
(sub Visant)
No Data Broadview, IL 7/16/14 No Data Acquisition Direct mail printing
(combined $300 Mil revenue)
Allegra Marketing Print Mail No Data Harrisburg, PA Neighborhood Greetings No Data Millersville, PA 7/14/14 No Data Acquisition Direct mail Link
OEC Graphics No Data Oshkosh, WI MGM Graphics No Data Lynwood, WA 7/11/14 No Data Acquisition Corrugated packaging Link
Investcorp No Data London, UK SPGPrints No Data Boxmeer,
7/10/14 No Data Acquisition Rotary screen printing units Link
Publishers’ Graphics No Data Carol Stream, IL Commercial Letter No Data St. Louis, MO 7/8/14 No Data Acquisition Direct mail printing Link
Multi Packaging Solutions No Data New York, NY Armstrong Packaging No Data Arbroath, Scotland 7/8/14 No Data Acquisition Specialty rigid boxes Link
Cathedral Corp No Data Rome, NY AXIS Data Solutions No Data Orlando, FL 7/7/14 No Data Acquisition Transactional printing Link
NYC Community Media  No Data New York, NY Community Newspaper Group  No Data Brooklyn, NY 7/3/14 No Data Acquisition Community newspapers Link
Atlas Paper Mills
(Peak Rock Capital Portfolio Co.)
No Data Austin, TX Accurate Paper Recycling No Data Tampa, FL 7/2/14 No Data Acquisition Paper recycling Link
H.I.G. Capital No Data Miami, FL Cascades Fine Papers Group
(Re-branded Rolland Enterprises)
No Data Saint-Jérôme, QC 7/2/14 No Data Acquisition Specialty fine papers Link
Adams Publishing Group No Data Minneapolis, MN Huckle Media  No Data Faribault, MN 7/1/14 No Data Asset acquisition Community newspapers Link
Jet Service Accura Printing No Data Barre, VT Spaulding Press No Data Bethel, VT 7/1/14 No Data Merger Commercial printing Link

2014 July - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries

Filing Party

($Mil )

Case #

Filing Party Address


Region & City


Attorney for Debtor

Chapter 11 Filings:
No Chapter 11 Filings Found this Month --- --- --- --- --- --- --- --- ---
Chapter 7 Filings:
Martinez Press, Ltd. 7/30/14 No Data 14-27932 Chicago, IL 7th Northern IL
Jack B. Schmetterer Mehul D. Desai Commercial printing
Carolina News Company, Inc 7/24/14 No Data 14-04161 Mauldlin, SC 4th South Carolina
Helen E. Burris Sidney Wike Magazine wholesale distributor

2014 July - 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


Visual Controls
(DBA Champ Direct)
Jul-14 No Data Milford, CT None N/A 7/28/14 Direct mail printing Link
University of Arkansas - Print Shop 7/1/16 No Data Fayetteville, AR University of Arkansas Fayetteville, AR 7/24/14 In-plant printing facility Link
Fusion Paperboard Sep-14 No Data Sprague, CT None N/A 7/23/14 Paperboard mill Link
Cascades - Paper Mill 10/3/14 No Data East Angus, QC Cascades Kingsey Falls, QC 7/9/14 Kraft paper mill Link
Fidelity Investments - Printing Facility Jul-15 No Data Grapevine, TX Fidelity Investments Boston, MA 7/9/14 Transactional printing Link
Fidelity Investments - Printing Facility Jul-15 No Data Covington, KY Fidelity Investments Boston, MA 7/9/14 Transactional printing Link
Lifetouch Services Dec-14 No Data Kansas City, MO Lifetouch Eden Prairie, MN 7/8/14 Yearbook printing Link
Scotsman Media Group 7/3/14 No Data Chenango Bridge, NY None N/A 7/1/14 Community newspapers & shoppers Link
Scotsman Media Group 7/3/14 No Data Syracuse, NY None N/A 7/1/14 Community newspapers & shoppers Link