Monday, December 5, 2016

“Just One Word: Plastics” – November 2016 M&A Activity


It’s been almost 50 years since the young Dustin Hoffman, in his role as the confused Benjamin in the 1967 movie The Graduate was offered sage advice about his future career. In the now famous line, a well-meaning elder, in a solemn tone, advised Benjamin, “Just One Word: Plastics.”

That famous phrase seemed superficial to many at the time; the word “plastic” became a synonym for shallowness or anything perceived as phony to the younger generation of the 60’s and 70’s. However, for the printing and packaging industries, that advice still resonates as technological advancements, such as multi-layer films, UV inks, LED curing systems and other developments continuously improve our ability to print on plastics. It turned out that there was, and still is, a future in plastics.

Printing on plastics, specifically manufacturing plastic cards of all sorts, was the target of Multi Packaging Solutions in its recent acquisition of i3 Plastic Cards. Multi Packaging Solutions, a global print and packaging roll-up that has achieved revenues in excess of $1.6 billion since its founding in 2005, is already a significant player in the market for transactional cards including credit card issuers Visa, MasterCard and American Express. The addition of Dallas-based i3 Plastic Cards adds capacity to produce up to another 2 million cards per day, focused on printing gift and loyalty program cards.

Plasticard Locktech International (PLI) secured a $12.4 million investment, structured as mezzanine debt, from Mosaic Capital Partners to fund its acquisition of Production Services Associates (PSA), a plastic card manufacturer based in Romeoville, Illinois. PSA, formerly owned by Spell Capital, specializes in so-called “closed loop” card production; gift cards that can be used at only one brand, such as a Starbucks or Home Depot gift card. Other products produced by PSA include membership cards, loyalty cards (often with a detachable small version of the card for your keychain), coupons and faux credit cards used in marketing solicitations. The acquiring company, PLA, in addition to gift cards, produces addressable plastic keycards used in hotels, resorts, cruise ships, colleges and casinos.

As a bonus for these printing companies, plastic card programs often include additional printed elements, printed on paper or card stock, such as carriers, mailers and cover letters, often personalized. Of critical importance to many of the programs using plastic cards, the cards may have monetary value and require significant security at all stages of production. Card programs often require management of highly sensitive confidential data needed for barcoding, embedded information on magnetic strips and chips, activation, redemption and proper personalization. Maybe that sage advice to that young man, revised if the movie was remade circa 2016, would be, “Just One Word: Data.”

Commercial Printing

OneTouchPoint, the Wisconsin-based roll-up in the commercial printing segment, expanded its presence in the Cincinnati market with the acquisition of PrintManagment. The acquired company brings additional digital printing and data management capabilities into the OneTouchPoint marketing services platform. The company now boasts additional locations in Texas, Colorado and Arizona in addition to its original core Midwest locations.

On the other side of Ohio, in the northeast corner of the state just south of Cleveland, Traxium continued its roll-up of smaller local companies in commercial printing and marketing services with the acquisition of McKinnon Printing. McKinnon will be tucked into Traxium’s Printing Concepts division in Stow, Ohio. This is the second acquisition this year for Traxium (See The Target Report – July 2016).

In Greenville, South Carolina, the local Minuteman Press franchise acquired commercial printer Fox Creek Printing and moved into the acquired company’s 5,500 square foot facility, signaling that the company plans to compete for larger commercial print orders, as well as wide format products.

Packaging

November was another busy month for M&A activity in the packaging segment. In addition to the aforementioned acquisition of the plastic card printer, Multi Packaging Solutions acquired AJS Labels in the UK, adding to its global capacity to print pressure sensitive labels for packaging applications.

Novolex acquired the packaging converting operations of Burrows Paper. Burrows was divided and sold in two separate transactions during November, ending almost 100 years of family ownership (the paper operations were sold to Twin Rivers Paper). Novolex was created by private equity firm Wind Point Partners with the combination of Hilex Poly, Duro Bag Manufacturing and Packaging Dynamics in 2014 (See The Target Report – November 2014), and added to with the acquisition of Wisconsin Film & Bag in 2015.

Fort Dearborn, producer of prime labels of all sorts; cut & stack, pressure sensitive, roll-fed, and shrink sleeve labels, purchased SleeveCo which prints stretch sleeve labels and supplies associated application equipment. The newly acquired facility in Dawsonville, Georgia brings the total to fifteen production locations across the US and Canada. Fort Dearborn itself was acquired earlier this year by Advent International (See The Target Report – “Private Equity Loves Labels"), previously having acquired both AC Label and the label business unit of the FetterGroup in 2013.

Sonoco, the nearly $5 billion conglomerate, maybe best known to printers for its ubiquitous paper tubes and cores, expanded its diverse capabilities in packaging with the acquisition of Plastic Packaging, manufacturer of flexible packaging located in Hickory, North Carolina. The acquired company produces a wide variety of packaging, including stand-up pouches, bags, and sleeves, with a focus on serving the pet products, food and other consumer product markets.

2016 November - 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
Fort Dearborn
(Port co. Advent International)
No Data Elk Grove, IL SleeveCo No Data Dawsonville, GA 11/29/16 No Data Acquisition Shrink sleeve labels Link
Supremex $158.5 LaSalle, QC Durabox $8.0 Lachine, QC 11/28/16 No Data Acquisition Corrugated boxes Link
Oval Partners No Data San Francisco, CA ProCopy Office Solutions No Data Tempe, AZ 11/16/16 No Data Acquisition Managed print services Link
GateHouse Media
(Div. New Media Investment)
$1,200 Pittsford, NY Kansas Newspapers
(Harris Enterprises)
No Data Hutchinson, KS 11/15/16 No Data Acquisition
(Dirks, Van Essen)
Community newspapers Link
Amcor $7,025 Victoria, Australia Hebei Qite Packing No Data Hebei, China 11/11/16 $28.0 Acquisition Flexible packaging Link
Twin Rivers Paper
(Port co. Blue Wolf Capital)
No Data Madawaska, ME Paper operations
(Div. Burrows Paper)
No Data Little Falls, NY 11/11/16 No Data Acquisition Paper mills Link
Novolex
(Port. Co Wind Point Partners)
No Data Hartsville, SC Packaging operations
(Div. Burrows Paper)
No Data Little Falls, NY 11/11/16 No Data Acquisition Packaging converting Link
Canadian Kraft Paper Industries No Data Greenwich, CT Kraft paper mill
(Sub. Tolko)
No Data The Pas, MB
(Vernon, BC)
11/10/16 No Data Acquisition Paper mill Link
Multi Packaging Solutions
(Port co. Madison Dearborn)
$1,617 New York, NY AJS Labels No Data Littlehampton, UK 11/8/16 No Data Acquisition PS labels/packaging Link
Multi Packaging Solutions
(Port co. Madison Dearborn)
$1,617 New York, NY i3 Plastic Cards No Data Dallas, TX 11/8/16 No Data Acquisition Plastic card printing Link
OneTouchPoint No Data Hartland, WI PrintManagement No Data Cincinnati, OH 11/7/16 No Data Acquisition Commercial printing Link
Paddock Publications No Data Arlington Heights, IL Gold Nugget Publications No Data Virden, IL 11/7/16 No Data Acquisition Community newspapers Link
Alliance Franchise Brands No Data Plymouth, MI KKP Canada No Data Richmond Hill, ON 11/4/16 No Data Acquisition Printing & copying franchisor Link
Printing Concepts
(Div. Traxium)
No Data Stow, OH McKinnon Printing No Data Akron, OH 11/3/16 No Data Acquisition Commercial printing Link
Plasticard Locktech International No Data Asheville, NC  Production Services Associates
(Port co. Spell Capital)
No Data Romeoville, IL  11/2/16 No Data Acquisition
(Stout Risius Ross)
Plastic card manufacturing Link
Minuteman Press No Data Greenville, SC Fox Creek Printing No Data Greenville, SC 11/2/16 No Data Acquisition Commercial printing Link
Sonoco $4,910 Hartsville, SC Plastic Packaging $42.0 Hickory, NC 11/2/16 No Data Acquisition Flexible packaging Link


2016 November - 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:
No Chapter 11 Filings Found this Month --- --- --- --- --- --- --- --- ---
GKM Corporation 11/22/16 No Data 16-27746  Colfax, CA 9th Eastern CA
Sacramento
Christopher M. Klein Anthony Asebedo  Commercial printing
West Coast Litho, Inc. 11/18/16 No Data 16-25252 Gardena, CA 9th Central CA
Los Angeles
Sheri Bluebond Batkhand Zoljargal  Commercial printing


2016 November - 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
Payette & Simms 12/8/16 No Data Boucherville, QC None N/A Nov-16 Commercial printing (web) Link
Printers Edge 12/6/16 No Data Orlando, FL None N/A Nov-16 Bindery and print finishing services Link