Tuesday, November 7, 2017

Transactional Print: Fertile Ground for Consolidation – October 2017 M&A Activity

As the millennial generation increasingly opts for “e-presentment” of monthly invoices and statements, companies that print these documents may find the ground underneath their business shifting as the transactional printing segment rapidly develops in today’s multi-channel environment. Recent acquisitions are indicative that the conditions are fertile for roll-up and consolidation in the transactional / transpromo segment of the printing industry.

OSG Billing Services, headquartered in New Jersey and with ten locations nationally, announced the acquisition of Illinois-based Microdynamics, with three Midwest locations. The two companies list nearly identical service solutions on their respective websites, offering transactional / transpromo printing, mailing of statements and invoices, and electronic bill presentment. While each company is not an exact mirror of the other, the “e-services” noted on their websites include archival services and delivery via email. OSG also offers mobile apps, clearly aiming to nurture and grow its e-presentment capabilities to its current print-centric customers.

Acquired just four months ago by New York-based private equity firm Aquiline Capital Partners, OSG is now established as a new platform company poised for bolt-on additional revenue and production capacity in both print and electronic transactional document processing. The sale to OSG was a secondary buyout for the acquired company, Microdynamics, which was the target of an initial buyout by Wafra Partners in 2006. Not surprisingly, Wafra was ready to move on, having held Microdynamics in its portfolio for eleven years through the entire economic cycle from the peak before the Great Recession to the current bull market, far longer than the median five-year hold period recently reported for PE exits this year.

Newly planted into Aquiline Capital, OSG and its recently grafted-on offshoot Microdynamics are poised for additional growth in a segment likely to experience more consolidation. Companies that can only process the print portion of billing presentment in this multi-channel environment may be well advised to seek a partner while the sun is still shining on targets in the transactional / transpromo printing business.


The Snow Phipps Group, a private equity firm based in New York acquired Brook & Whittle, a Connecticut company that manufactures prime labels, in a secondary buyout transaction (for a discussion about secondary PE buyouts, see Moving Pieces Around on the PE Chessboard, The Target Report – October 2016). Brook & Whittle was previously owned by RFE Partners and Charter Oak, two private equity firms that had jointly acquired Brook & Whittle in 2009. Under that initial PE ownership, Brook & Whittle expanded its production capacity to produce high volume pressure sensitive labels, and in 2011 completed the strategic add-on acquisition of the Packstar Group in Buffalo, New York which significantly expanded the company’s shrink sleeve label business.

Also in the label segment, industry roll-up giant CCL Label acquired the balance of the 37.5% minority shares that it did not already own in its Chilean subsidiary, Acrus CLL. Our calculations of the purchase price paid, relative to the percentage of shares outstanding, indicate that CCL paid approximately 5.8x times last year’s EBITDA, very consistent with the range of 4.1x to 6.0x in which CLL has stayed within in all its reported deals of smaller label companies (see Sticky Discipline for the Label Business, The Target Report – May 2016).

In the segment where we hear that purchase multiples are often approaching or in the double-digit range, flexible packaging printer and converting company Seville Flexpack, located in Oak Creek, Wisconsin has been acquired by the German flexible packaging manufacturer Südpack Verpackungen. The buyer, with plants throughout Europe, announced that it plans to acquire more US-based flexible packaging companies now that it has a foothold in the US market.

Nosco, a division of ESOP-owned Holden Industries, acquired Gooding Company in a move that broadens the types of printed products it can provide to its existing customer base. The purchased company, based in western New York State, produces mini-folded inserts and outserts for the pharmaceutical, nutraceutical, medical device, health, and beauty markets, the same markets into which Nosco provides offset and digitally-printed labels and cartons.

Commercial Printing and Diversified Services

Acquisitions in the commercial printing segment, by far the most active for deals 
over the past twelve months, continued unabated in October. Here is a graphic representation of the transactions listed in the past twelve months on The Target Report deal logs:

Vomela, with in excess of $237 million annual revenue and much more known for its prowess in the point-of-purchase and fleet marking segments, once again added to its portfolio of commercial printing companies with the acquisition of Tepel Brothers Printing in Troy, Michigan. The acquired company will retain its name and operate within Vomela’s C2 Imaging unit which this past March also added Elk Grove Graphics to the roster of commercial printing companies joining the Vomela Companies (see The Target Report – March 2016).

Two smaller commercial printing companies in Sanford, Maine have announced that they will merge operations, with Edison Press acquiring Lincoln Press. Consolidation and shrinkage within the commercial segment was further evidenced by the involuntary Chapter 7 filing against Integrity Graphics in Windsor, Connecticut. As we noted in our July 2017 log of non-bankruptcy closures, Integrity had closed its operations and an auction of all the equipment was scheduled for September.

2017 October - 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


(Div. Harland Clarke Holdings)
No Data Livonia, MI Sacandaga Direct Mail No Data Mayfield, NY 10/30/17 No Data Acquisition Regional magazines Link
Data Communications Mngt. $277.2 Brampton, ON Bolder Graphics $7.0 Calgary, AB 10/30/17 $4.9 Acquisition Wide format printing Link
GateHouse Media
(Div. New Media Investment)
$1,270 Pittsford, NY Edward A. Sherman Publishing No Data Newport, RI  10/26/17 No Data Acquisition Community newspapers Link
DBC Communications No Data Saint-hyacinthe, QC Les 2 Rives
(Prop. Transcontinental)
No Data
Montreal, QC 10/25/17 No Data Acquisition Weekly newspaper Link
Graphic Packaging $4,330 Atlanta, GA
Consumer packaging business
(Div. International Paper Company)
Memphis, TN 10/24/17 $1,800 Joint Venture Paperboard mills & converting Link
(Sub. Holden Industries)
No Data Waukegan, IL Gooding company No Data Lockport, NY 10/23/17 No Data Acquisition
(New Direction)
Pharma inserts & outserts Link
Hearst Newspapers
(Div. Hearst)
$10,800 New York, NY Rodale No Data Emmaus, PA 10/18/17 No Data Acquisition
(Allen & Co.)
Magazine & book publishing Link
OSG Billing Services
(Port co. Aquiline Capital)
No Data Ridgefield Park, NJ Microdynamics
(Port co. Wafra Partners)
No Data Naperville, IL 10/18/17 No Data Acquisition Transactional printing Link
Snow Phipps Group No Data New York, NY Brook & Whittle
(Port co. RFE & Charter Oak)
No Data North Branford, CT 10/18/17 No Data Acquisition Prime label printing Link
Founders Advantage Capital No Data Calgary, AB Astley Gilbert No Data Toronto, ON 10/16/17 $24.7 Purchase of 50% AEC printing services Link
Edison Press No Data Sanford, ME Lincoln Press No Data Sanford, ME 10/16/17 No Data Acquisition Commercial printing Link
Siegwerk No Data Siegburg, Germany Van Son Liquids No Data Hilversum,
10/16/17 No Data Acquisition Flexo & gravure inks Link
Neenah Paper $944.2 Alpharetta, GA Coldenhove Papier $45.0 Eerbeck,
10/11/17 $45.0 Acquisition Specialty papers Link
Industrial Assets Corp. No Data Studio City, CA Appleton Coated $350.0 Combined Locks, WI 10/10/17 $21.5 Receivership sale Coated paper mill Link
Vomela $237.0 St. Paul, MN Tepel Brothers Printing No Data Troy, MI 10/9/17 No Data Acquisition Commercial printing Link
Worth Higgins & Associates $27.0 Richmond, VA Sign Unlimited $2.0 Richmond, VA 10/6/17 No Data Acquisition Signage Link
DemandBridge No Data Norcross, GA e-Quantum No Data Sparks, NV 10/5/17 No Data Acquisition
(Corp Dev Assoc)
Print distributor software Link
Adams Publishing Group No Data Minneapolis, MN Pioneer News Group
(Media division)
No Data Seattle, WA 10/5/17 No Data Acquisition Community newspapers Link
MBE Worldwide $641.0 Milan, Italy AlphaGraphics
(Master franchisor)
$299.0 Salt Lake City, UT 10/4/17 No Data Acquisition Print franchise system Link
Graphic Packaging $4,330 Atlanta, GA Norgraft Packaging $40.0 Cantabria, Spain 10/4/17 No Data Acquisition Folding cartons Link
CCL Industries $4,460 Toronto, ON Acrus CCL $18.1 Santiago, Chile 10/3/17 $6.3 Buyout of Minority Beverage labels Link
Fortusis No Data West Jordan, UT ICED No Data Cypress, TX 10/3/17 No Data Acquisition Print franchise system Link
Electronics for Imaging (EFI) $988.0 Foster City, CA Escada Systems No Data Hull, UK 10/2/17 No Data Acquisition Corrugated process control Link
CJK Group No Data Brainerd, MN Webcrafters No Data Madison, WI 10/2/17 No Data Acquisition Book printing Link
Südpack Packaging Group No Data Ochsenhausen,
Seville Flexpack No Data Oak Creek, WI 10/1/17 No Data Acquisition
(TKO Miller)
Flexible packaging Link

2017 October - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries

Filing Party

($Mil )

Case #

Filing Party Address


Region & City


Attorney for Debtor

Chapter 11 Filings:
Appvion, Inc. 10/1/17 No Data 17-12082 Appleton, WI 3rd Delaware
Kevin J. Carey Stuart M. Brown Specialty papers
Journal-Chronicle Company
(aka J-C Press)
10/23/17 No Data 17-33322 Owatonna, MN 8th Minnesota
William J. Fisher Thomas Flynn Commercial printing
Chapter 7 Filings:
Integrity Graphics, Inc. 10/3/17 No Data 17-21513 Windsor, CT 2nd Connecticut
James T. Tancredi Jon P. Newton Commercial printing
West Linn Paper Company 10/26/17 No Data 17-33992 West Linn, OR 9th Oregon Trish M. Brown Pro Se Paper mill

2017 October - 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


West Linn Paper - paper mill Oct-17 No Data West Linn, OR None N/A 10/17/17 Coated free-sheet & specialty papers
(Originally Willamette Falls Paper & Pulp)
Quad/Graphics - Printing facility Dec-17 No Data Waseca, MN Quad Graphics Sussex, WI  10/25/17 Consolidating print operations Link
Riverside Group 12/7/17 No Data Rochester, NY None N/A Oct-17 Trade binding services Link
Becker Printing Company 11/14/17 No Data Beaumont, TX None N/A Oct-17 Commercial printing Link
General Die & Die Cutting 11/15/17 No Data Roosevelt, NY None N/A Oct-17 Trade finishing services Link
Pro Printing and Graphics 11/8/17 No Data North Platte, NE None N/A Oct-17 Printing & copying Link
DBS Industries 11/16/17 No Data Haverhill, MA None N/A Oct-17 Business forms printing Link