Sunday, March 6, 2016

Cold Front Moves In – February 2016 M&A Activity

Is the market cooling off for companies in the printing, packaging and related industries? After the peak number of deals announced in January, there was a sudden and noticeable drop off in transactions. No mega-deals were announced in February, and with the exception of two deals by Luxembourg-based powerhouse ink supplier Flint Group, no big players were active. Accentuating the decline in M&A transactions there was a slight uptick in industry-related bankruptcy filings, accompanied by the steady drumbeat of non-bankruptcy plant closures. While it does not appear that we should be battening down the hatches, we may be seeing at minimum a pause in industry transactional activity as buyers take a break while multiples cool off a bit. 

Several private equity fund principals we spoke to have noted that they are taking a bit of a breather and stepping back from the packaging market despite their genuine interest in the segment. They report that sellers have caught “multiple fever” and continue to ask for higher and higher valuations, feeding on the prices they have heard that others obtained, and wanting even more. In a discussion about the broader transactional market at a recent panel discussion consisting of family office investors and their professional managers, there was a general consensus that they have become very selective about new investments. Given the patient nature of their funds, they are sitting it out while multiples cool, rather than chase ever more expensive deals.


CCL Industries recently announced transactions that illustrate that prices for packaging-related companies may in fact be moderating. Three deals announced in January had an average enterprise value to EBITDA ratio of just 5.1, in contrast to the oft-reported multiple range of 6 times to 8 times EBITDA for companies in the packaging segment. CCL acquired Woelco, a German label printer that specializes in OEM labels for automotive, electronics and industrial applications. Woelco has revenues of $31 million, with EBITDA of $4.5 million (14.5%). The Company was acquired for $27 million, 6.0 times EBITDA, 87% of revenues.

In another strategic acquisition to expand its international footprint, CCL purchased Label Art in Dublin, Ireland. In this deal, CCL paid 5.0 times EBITDA for the company which has $17 million revenues with $3 million EBITDA (a very respectable 17.6% in this segment). The $15 million price tag equated to 88% of revenues.

CCL also exercised its deal discipline in a third transaction for the smaller specialty printer Mabel’s Labels, located much closer to Toronto, CCL’s home base. The acquired company produces highly personalized labels for the consumer market through its online shipping portal. While on a price-to-revenue ratio the deal seems rich at 126% of annual revenues of $9.5 million, based on Mabel’s EBITDA of $2.8 million (29.5%), the multiple paid was a modest 4.3 times EBITDA.

Trade Association Merger

In a sign of the times indicative of the continued evolution in the commercial printing segment, Epicomm announced that the trade association will be merging with Idealliance. Epicomm itself is the result of the merger of three trade associations (AMSP, NAPL and NAQP), having rebranded only last January. AMSP in turn was the rebranded identity of the former Mailing and Fulfillment Service Association (MFSA).

Epicomm focuses on the big picture of the printing industry, conducting high-level economic research, advocating and providing management training and expertise. Idealliance, on the other hand, has been instrumental on the ground level, bringing knowledge of workflow and technical standards to the industry. 

Commercial Printing

The Midwest commercial printer with the unique name, Bolger Vision Beyond Print, acquired fellow Minnesotan Twin Cities printer Western Graphics. While terms of the deal were not announced, MB Business Capital reportedly provided a $11.25 senior credit facility to Bolger in conjunction with the acquisition. 

Action Print* was acquired by Universal Printing Services. Both companies are located in Des Moines, Iowa and the merged companies will be consolidated into Universal’s current location. Thomas Printworks, formerly Thomas Reprographics, headquartered in Richardson, Texas, acquired Seebridge Media in Houston. With over 25 locations in Texas, Arizona, Minnesota and Florida, the acquisition, as well as the new name, appears to signal a much deeper commitment to a broad base of print-related services.

* Graphic Arts Advisors, publisher of The Target Report, served as exclusive advisor to Action Print in this transaction.

2016 February - 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


Universal Printing Services No Data Des Moines, IA Action Print No Data W. Des Moines, IA 2/29/16 No Data
(Graphic Arts Advisors)
Commercial printing Link
RFE Investment Partners No Data New Canaan, CT Stagnito Business Information
(Port co. Topspin Partners)
No Data Deerfield, IL 2/19/16 No Data Acquisition/Merger
Business publishing Link
RFE Investment Partners No Data Deerfield, IL Edgell Communications No Data Randolph, NJ 2/19/16 No Data Acquisition/Merger
Business publishing Link
Flint Group $2,900 Luxembourg Siegwerk No Data Siegburg, Germany 2/17/16 No Data Acquisition Web offset inks Link
Bolger Vision Beyond Print No Data Minneapolis, MN Western Graphics No Data St. Paul, MN 2/16/16 No Data Acquisition Commercial printing Link
Thomas Printworks No Data Richardson, TX Seebridge Media No Data Houston, TX 2/16/16 No Data Acquisition Commercial printing Link
Color Management Group No Data Morgan Hill, CA Elevated Color No Data Lakewood, CO 2/10/16 No Data Acquisition Color management Link
Liberty Carton Company No Data Minneapolis, MN Western Container Corp No Data Minneapolis, MN 2/4/16 No Data Acquisition Corrugated products Link
Idealliance No Data Alexandria, VA Epicomm No Data Alexandria, VA 2/3/16 No Data Merger Trade associations Link
Flint Group $2,900 Luxembourg Advanced Color Systems No Data Tualatin, OR 2/2/16 No Data Acquisition Water-based inks Link

2016 February - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries

Filing Party

($Mil )

Case #

Filing Party Address


Region & City


Attorney for Debtor

Chapter 11 Filings:
Mercury Signs & Display, Ltd. 2/23/16 No Data 16-30906 Houston, TX 5th Southern TX
Jeff Bohm Margaret
Maxwell McClure 
Screen & wide format printing 
AB Printing Inc 2/12/16 No Data 16-01027 San Juan, PR 1st  Puerto Rico
San Juan
Mildred Caban Flores Emily Davila Rivera Printing & copying
Hess Commercial Printing, Inc. 2/12/16 No Data 16-20470 New Castle, PA 3rd Western PA Jeffery A. Deller Michael P. Kruszewski  Commercial printing
Campbell Graphics, Inc.
(Alpha Graphics 521)
2/9/16 No Data 16-30523 Richmond, VA 4th Eastern VA Kevin R. Huennekens Robert S. Westermann  Printing & copying
Chapter 7 Filings:
Impressions, Inc. 2/29/16 No Data 16-12508 Chester, MD 4th Maryland
Thomas J. Catliota Michael E. Crowson Commercial printing

2016 February - 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


Quad/Graphics - Printing facility Feb-16 No Data Lenexa, KS Quad Graphics Sussex, WI  2/24/16 Retail inserts
Formerly Vertis printing facility
Faith Printing 2/17/16 No Data Taylors, SC None N/A Feb-16 Commercial printing Link
AlphaGraphics Center 2/9/16 No Data Albuquerque, NM None N/A Feb-16 Printing & copying Link
Pyramid Label 2/9/16 No Data Rohnert Park, CA None N/A Feb-16 Label  printing Link
Michael Graphics 2/11/16 No Data New Brunswick, NJ None N/A Feb-16 Commercial printing Link