Friday, January 6, 2017

They’re Back… (Buyers of Commercial Printers) – December 2016 M&A Activity

Commercial printers are feeling the love from acquirers as their top line revenues increase, profits return and grow – at least that is true for printing companies that are able to demonstrate a high degree of competence, have specialized capabilities and that serve well-defined vertical markets. Compared to the past several years, there is an unmistakable and positive difference in the market for commercial printers.

A year ago, we advised buyers of commercial printing companies to proceed with caution; we indicated that the road ahead was potentially rough. The environment was still very competitive as many commercial printers scrambled to add services and differentiate their companies. Although the industry is not ready to “party like it’s 1999,” the trend now, and we believe likely to persist for the coming year, in terms of M&A, is that buyers are back in the market for commercial printers. Recent data, as detailed in The Target Report deal logs, indicates that transactional activity in the commercial printing segment has increased substantially, and the nature of completed transactions signifies that buyers are anticipating improved business conditions for commercial printers. Purchase multiples have risen to levels that portend and are likely to stimulate increased M&A activity in the commercial printing segment during the coming year.

Orora, based down-under in Hawthorn, Australia, and publicly listed on the ASX exchange, has placed its second bet on the US commercial printing industry with its acquisition of Clifton, New Jersey-based Register Print Group. In a bellwether transaction, both in terms of price and structure, Orora paid $44 million for the company, a healthy 5.8 times trailing twelve months $7.6 million EBITDA, a very respectable 18.1% of revenue which was $42 million. Year-over-year top line growth was 5% for the past three years, another indicator that surely drove the value for the sellers. As reported in Orora's presentation to investors, the $44 million purchase price was paid mostly in cash with only $4 million of the total held back for 18 months, subject to undisclosed parameters for release. As icing on the cake, Orora paid an additional $3 million to reimburse the sellers for recent capital investments that are predicted to drive additional growth, but that have not yet impacted trailing EBITDA, increasing the effective multiple paid to 6.2 times trailing EBITDA, rewarding, not penalizing, the sellers for planning ahead regardless of their interest in selling the company.

It must be noted that although Register operates in the commercial printing segment, it is not a typical commercial printer, rather the company has long been a specialist in large-format offset printing, the “go-to” printer in the New York metro area for oversize offset sheets used primarily in retail displays, with a smaller position in oversize litho sheets used to produce packaging. In addition to Register’s product specialization, Orora was attracted by Register’s industry vertical focus on consumer products, food & beverage, healthcare and technology companies, all consistent users of retail point-of-purchase printing.

The acquisition of the Register Print Group is consistent with and adjunctive to Orora’s prior acquisition of IntegraColor in March, 2016. Orora reported that they paid 6.9 times trailing EBITDA for IntegraColor. Based in Dallas, Texas, IntegraColor forms the platform company for Orora's strategic initiative to establish a significant US-based point-of-purchase business. Although the acquired company’s EBITDA of 11.2% was, as a percentage of revenue, less than at Register, IntegraColor was significantly larger in terms of revenues, approximately $100 million, which combined with IntegraColor’s role as the initial US investment in retail display, apparently justified that higher multiple. Consistent with the terms of the Register purchase, Orora paid $70 million of the purchase price in cash at closing, holding back an additional $7 million for up to 18 months against reps and warranties.

In another noteworthy transaction last month, private equity firm ICV Partners acquired SG360°, one of the largest direct mail printers in the US with annual revenues of $300 million. SG360° was majority-owned by the company’s ESOP plan which was refinanced in the transaction, locking in value for the employees in the current favorable market conditions. ICV is not a freshman when it comes to commercial printing companies – the fund has another printing company in its portfolio, OneTouchPoint, a roll-up of commercial printing companies with a go-to-market position as a comprehensive marketing services provider. ICV acquired OneTouchPoint in September 2014 from Huron Capital Partners. OneTouchPoint has itself been an active acquirer of commercial printing companies, standing as one of the few companies active on the national stage executing a roll-up strategy in commercial printing (See The Roll-Up Returns (to Commercial Printing), The Target Report, Sept 2014).

Moore DM Group, a diversified direct mail company serving the non-profit fundraising industry, acquired Vienna, VA-based Production Solutions / PS Digital, adding to the company’s deep penetration into the non-profit direct mail production space. Angstrom Graphics, a diversified commercial printer based in Cleveland, Ohio, acquired list and mailing service company New Channel Direct. The Marek Group continued its evolution towards being a full-fledged marketing services provider, acquiring marketing agency Wunderlich, Pearson & Tetzlaff, both in Wisconsin.

Projections for 2017

As 2016 wound down, the commercial printing industry segment exhibited renewed strength, both in M&A activity and fewer bankruptcy filings and plant closings. Therefore, we are changing our forward-looking indicator for the commercial printing segment for 2017 from orange to green and now pointed slightly upwards.

For our projections for all printing & packaging segments, click here to view GAA’s Projections for 2017.

For comparison to last year, click here to view GAA’s Projections for 2016.

2016 December - 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


American Speedy Printing No Data Jackson, MI Anderson Printing & Mailing No Data Jackson, MI 12/23/16 No Data Acquisition Printing & copying Link
Sato $880.0 Tokyo, Japan DataLase No Data Widnes, UK 12/22/16 No Data Acquisition Package marking Link
McClatchy No Data Sacramento, CA Herald-Sun of Durham
(Prop of Paxton Media Group)
No Data Durham, NC 12/21/16 No Data Acquisition Local newspaper Link
CCL Industries $2,790 Toronto, ON Innovia $427.5 Wigton, UK 12/19/16 $847.5 Acquisition Packaging & currency films Link
Clearwater Paper $1,740 Spokane, WA Manchester Industries No Data Richmond, VA 12/16/16 $68.3 Acquisition Paperboard converting Link
Hemlock Harling Distribution
(JV Hemlock Printers & Harling)
No Data Burnaby, BC Kirk Marketing No Data Richmond, BC 12/16/16 No Data Acquisition Mailing services Link
Orora $2,811 Hawthorn,
Register Print Group $42.0 Clifton, NJ 12/15/16 $44.0 Acquisition Packaging & retail display Link
New-Indy Containerboard No Data Ontario, CA triPAQ No Data Cerritos, CA 12/13/16 No Data Acquisition Corrugated packaging Link
Cimpress $1,860 Venlo,
National Pen $275.0 San Diego, CA 12/12/16 $218.0 Stock Acquisition Personalized pens Link
De La Rue $563.6 Basingstoke, UK DuPont Authentication Business
(Div. DuPont)
$14.0 Logan, UT
(Wilmington, DE)
12/12/16 $25.0 Acquisition Holographic films & systems Link
Avery Dennison $5,950 Glendale, CA Hanita Coatings
(Port co. Tene Investment Funds)
$50.0 Kibbutz Hanita,
12/12/16 $75.0 Acquisition Pressure sensitive films Link
ICV Partners No Data New York, NY SG360° $300.0 Wheeling, IL 12/8/16 No Data
Acq. ESOP Shares
(J.P. Morgan Securities)
Direct marketing printing Link
Marek Group No Data Waukesha, WI  Wunderlich, Pearson & Tetzlaff No Data Wauwatosa, WI 12/8/16 No Data Acquisition Marketing agency Link
Lintec $1,730 Tokyo, Japan MACtac Americas
(Port co. Evergreen Holdings)
$304.0 Stow, OH 12/8/16 No Data Acquisition Pressure sensitive papers Link
Proforma Signature Solutions No Data Brooklyn Heights, OH Creative Image Advertising No Data Crowley, TX 12/6/16 No Data Acquisition Promotional items Link
Global Graphics $16.2 Cambridge, UK Meteor Limited
(Div. TTP Group)
$3.1 Melbourn, UK 12/5/16 $6.0 Stock Acquisition Printhead driver systems Link
Gateway Packaging
(Port co. Saw Mill Capital)
No Data Kansas City, MO Werthan Packaging No Data White House, TN 12/5/16 $7.2 363 Sale in Ch. 11 Multi-wall paper bags Link
Gazette Communications No Data Cedar Rapids, IA SE Iowa Newspapers
(Inland Media Co.)
No Data Washington, IA 12/1/16 No Data Acquisition Local newspapers Link
INX International
(Div. Sakata INX)
No Data
Schaumburg, IL
(Osaka, Japan)
Creative Industria e Comercio No Data Sao Paulo, Brazil 12/1/16 No Data Acquisition Ink manufacturing Link
Angstrom Graphics No Data Cleveland, OH New Channel Direct $3.0 Hinckley, OH 12/1/16 No Data Asset Acquisition List & mailing services Link
Moore DM Group No Data Tulsa, OK Production Solutions / PS Digital No Data Vienna, VA 12/1/16 No Data Acquisition Non-profit direct mail Link

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

Filing Party

($Mil )

Case #

Filing Party Address


Region & City


Attorney for Debtor

Chapter 11 Filings:
Werthan Packaging 12/4/16 No Data 16-08624 White House, TN 6th Middle TN
Marian F. Harrison Gene L. Humphreys Multi-wall paper bags
Litho-Tech, Inc. 12/4/16 No Data 16-33122 Hammonton, NJ 3rd New Jersey
Kathryn C. Ferguson Kevin S. Quinlan Prepress
Chapter 7 Filings:
No Chapter 7 Filings Found this Month --- --- --- --- --- --- --- --- ---

2016 December - 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


Abbey Press Printing Jun-17 No Data St. Meinrad, IN Saint Meinrad Archabbey
(Roman Catholic Monastery)
St. Meinrad, IN Dec-16 Religious books & publications Link
Home Mountain Publishing Company 2/23/17 No Data Valparaiso, IN None N/A Dec-16 Commercial printing Link
Stromberg Allen and Company Jan-17 No Data Tinley Park, IL None N/A Dec-16 Commercial printing Link