Sunday, March 8, 2015

Who Says Books Aren’t Pretty? – February 2015 M&A Activity













Books were ascendant in the printing deal space as RR Donnelley swooped down and snatched Courier Corporation right out of the arms of Courier’s suitor of choice, Quad/Graphics. Almost two and half times larger than Quad, RRD was not about to let this opportunity escape as it did last year when Quad acquired Brown Printing in a sweetheart of a deal. You can imagine the command issued from RRD’s executive suite, “do not let this one get away!” When the dust settled, RRD offered to assume all the debt of the bride-to-be, worth an additional $40 million more than Quad’s offer. Once spurned, Quad reportedly did not fight back.

With sales of $228 million, Courier represents an increase of only 2% in revenues for RRD, but as the traditional segments of the industry consolidate, there are fewer acquisition candidates that can move the needle for the largest players. In addition to traditional book printing, Courier brings other assets to the RRD family, including digital printing capabilities and on-demand solutions that extend the economic lifecycle of published titles. With its Dover and REA publishing brands, Courier owns over 10,000 titles, serving religious, trade and educational markets. The bride is not only pretty, she has intellectual content.

Since the engagement agreement with Quad included a break-up clause, the company did not go away without some reward for its trouble – RRD will be paying Quad the $10 million pre-nuptial fee that Courier owes for walking away from the alter. In any event, Quad recovered its composure quickly and picked up Paris-based Marin’s International, a global player in retail display.

More about Books

Recently rebranded commercial printer, Ironmark (née Frank Gumpert Printing) acquired United Book Press in nearby Woodlawn, Maryland. The acquired company will be maintained as a separate book printing division, adding $13 million in revenue to Ironmark’s $22 million.

Harman Press, a North Hollywood, California printer that touts its unionized work force to pitch entertainment and political clients, acquired A&I Photographic and Digital. The acquired company has evolved from a specialized photo processor to printer of fashion and entertainment portfolios and digital books.

Bookseller Family Christian, LLC filed for Chapter 11 bankruptcy, planning to sell itself in a 363 sale. A new subsidiary of its parent non-profit organization is the lead bidder acting as the stalking horse in the court supervised sales process. The company plans to maintain all 266 stores operating in 36 states with over 4,000 employees.

Commercial Printing & Copying

Staples announced its planned merger with Office Depot which itself recently acquired OfficeMax. The companies offer printing and copying services, both in-store and online. With their printing service offerings, the giant companies compete with thousands of small quick printers, all vying to capture the same walk-in print and copy business. As Staples continues to close stores and drive its customers to purchase office supplies online, its ability to successfully compete for copy business remains unclear.

At the opposite end of the size spectrum from Staples, KM Media Group, a collection of acquired companies competing in the general commercial segment, acquired One Source Solutions. One Source Solutions, formerly a Sir Speedy Printing franchise, will close its Newark, New Jersey location and tuck its business into KM’s Clifton, New Jersey location.

Commercial printer Allied Group in Cranston, Rhode Island acquired DES Printing. Allied has used a steady acquisition strategy, completing seven deals since 2000, to grow its business to $20 million revenue.

In Carlstadt, New Jersey, Pictorial Offset announced that it was closing after 78 years. At one time a formidable competitor in the market for high-end commercial printing, Pictorial has been unable to fully recover since the plant was flooded in 2012’s Superstorm Sandy. In a picture complicated by claims against the printer’s insurance company, the company was further challenged when its lender filed suit in December in an effort to collect an outstanding line of credit.

Paper

Private Equity firm Lindsay Goldberg created and funded Crown Paper Group as a holding company to acquire Port Townsend Holdings Company. The transaction included the Port Townsend Paper mill in Port Townsend, Washington, the Crown Packaging and Boxmaster plants in Vancouver, British Columbia, as well as two Canadian distribution centers. The Port Townsend mill produces Kraft and containerboard grades used in the company’s packaging plants.

The roll-up in the printing papers distribution segment continues. In its eighth acquisition of a regional paper merchant since 2010, Central National-Gottesman acquired Spicers Canada. Formerly owned by an Australian company, Spicers has 15 distribution and sheeting facilities throughout Canada.

Flexible Packaging

Popular Ink, a flexible packaging printer in McKinney, Texas was acquired by Dallas-based private equity firm Highlander Partners. The two founders are retaining a portion of equity in the company and will be working with the new owners to grow the company; presumably able to take a “second bite of the apple” when the company reaches the next stage in its development.


2015 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
Apex Machine No Data Fort Lauderdale, FL Desco Equipment Corp. No Data Twinsburg, OH 2/20/15 No Data Acquisition Printing equipment Link
Crown Paper Group No Data Atlanta, GA Townsend Holdings Co No Data Vancouver, BC 2/18/15 No Data Acquisition Paper mill & packaging mfg. Link
Harman Press No Data N. Hollywood, CA A&I Photographic & Digital No Data Burbank, CA 2/18/15 No Data Acquisition Fine-art photobooks & prints Link
Signature Card No Data Richardson, TX Performance Card Solutions
(Div. Performance Companies)
No Data Dallas, TX 2/16/15 No Data Acquisition Plastic card printing Link
Quad/Graphics $4,860 Sussex, WI Marin's International No Data Paris, France 2/12/15 No Data Acquisition Retail display Link
Ironmark $22.0 Annapolis Junction,
MD
United Book Press $13.0 Woodlawn, MD 2/12/15 No Data Acquisition Book manufacturing Link
KM Media Group No Data Clifton, NJ One Source Solutions No Data Newark, NJ 2/11/15 No Data Acquisition
(Epicomm)
Printing & copying Link
Circle Graphics No Data Longmont, CO Art Division of CafePress No Data Raleigh, NC 2/11/15 No Data Acquisition Grand & wide format printing Link
Central National-Gottesman No Data Purchase, NY Spicers Canada No Data Vaughan, ON 2/10/15 No Data Acquisition Paper distribution Link
Allied Group No Data Cranston, RI DES Printing No Data Provident, RI 2/10/15 No Data Acquisition
(New Direction)
Commercial printing Link
Highlander Partners No Data Dallas, TX Popular Ink No Data McKinney, TX 2/5/15 No Data Acquisition
(New Direction)
Flexible packaging Link
RR Donnelley $11,600 Chicago, IL Courier Corp $227.5 N. Chelmsford, MA 2/5/15 $300.0 Acquisition Book printing & content mngt. Link
Staples $22,710 Framingham, MA Office Depot $16,100 Boca Raton, FL 2/4/15 $6,300 Merger
(Barclays)
Office supplies, printing Link
Valid USA
(Sub. Valid, Brazil)
R$ 1,175 Lisle, IL Card Cells No Data St. Paul, MN 2/2/15 No Data Acquisition Secure ID & payment cards Link


2015 February - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries



Filing Party

Date
Case
Filed
Pre-Petition
Revenues
($Mil )



Case #



Filing Party Address



Circuit



Region & City



Judge



Attorney for Debtor



Notes
Chapter 11 Filings:
Technology Container Corp 2/25/15 No Data 15-40339 Worcester, MA 1st Massachusetts
Worchester
Melvin S. Hoffman David M. Nickless Generic corrugated boxes
North Toledo Graphics, LLC 2/13/15 No Data 15-30343 Toledo, OH 6th Northern OH
Toledo
John P. Gustafson Michael E. Baum Commercial printing
Family Christian, LLC 2/11/15 No Data 15-00643 Grand Rapids, MI 6th Western MI
Grand Rapids
John T. Gregg A. Todd Almassian Bookstores
Chapter 7 Filings:
CDI Media Group Corporation 2/19/15 No Data 15-12490 Los Angeles, CA 9th Central CA
Los Angeles
Vincent P. Zurzolo D. Justin Harelik Printing (and media replication)


2015 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
Pictorial Offset Feb-15 Carlstadt, NJ None N/A 2/13/15 Commercial printing Link
RR Donnelley  - Printing Facility May-15 No Data Nashville, TN RR Donnelley Chicago, IL 2/10/15 Formerly Moore Wallace facility Link