TC Transcontinental (TC) is a $1.6 billion (USD) printing and publishing company headquartered in Montreal with significant positions not only in printing but also in publishing newspapers and magazines, primarily serving Canadian audiences. With the obvious headwinds that these segments are facing, company management made the strategic decision to begin building a portfolio of packaging assets, utilizing their printing expertise, specifically web-based roll-fed technologies in which the company excelled in their high-volume operations. At the onset of this strategy in March 2014, when TC acquired its first flexible packaging company, François Olivier, President and CEO of TC, stated that the deal was the first indication of the company’s new strategic plan to grow through diversification. He added that flexible packaging was identified as a natural fit since the production process was in many ways similar to their current operations that ran roll-fed substrates and the market offered opportunities for growth. (see The Target Report – March 2014). Viewed from the perspective of its M&A activity, the company has remained laser-focused on implementing this strategy.
The announcement of its latest acquisition in November marks the company’s fifth deal in the flexible packaging segment. TC has acquired companies that might appear small relative to the total TC enterprise. The purchased companies have ranged in size from $27 million to $72 million (USD) in annual revenues, for a total in excess of $220 million revenues (not including this recent acquisition, for which revenues have not been disclosed). Lest there be any lack of clarity as to the company’s strategic direction, Isabell Marcoux, Chair of the Board of TC, reiterated in last year’s annual report that TC’s vision includes “transforming the organization to be a North American leader in flexible packaging.”
(Click on chart
to view enlarged)
In our opinion, this is a great example of a planned, disciplined, articulate and well-executed strategy. The plan utilizes the company’s financial strength gained from its traditional foundation, in this case printing newspapers and magazines, to build out an entirely new expertise in a much more desirable (and likely sustainable over the long term) segment of the printing industry!
Packaging
TricorBraun, a large manufacturer of rigid packaging (glass and plastic containers), with over 40 global locations, acquired Taipak, a flexible packaging printing company in Richmond, British Columbia. With this acquisition, TricorBraun, owned by PE firm AEA Investors, establishes its first foothold in the flexible packaging industry.
Graphic Packaging, the multi-billion dollar publicly-traded company that just last month took on the $1.6 billion consumer packaging division of International Paper Company, has announced another, albeit much smaller, acquisition in its sweet spot, the folding carton segment. The company is acquiring Seydaco Packaging, a folding carton printing company in Mississauga, Ontario with $40 million in revenues. EBITDA was reported being in the low double digits for the last twelve months, at a price reported that will be slightly less than 6 times EBITDA on a post-synergy basis.
Nosco is back on the deal-making path only a month after its last acquisition (see The Target Report – October 2017), this time acquiring the Knight Packaging Group located in Chicago. The acquired company is a departure from Nosco’s pharma-focused offerings, as Knight services the food industry, consumer products, as well as OTC products, offering packaging technologies such as blister packs and gabletop cartons, in additional to traditional folding cartons.
In the label segment, Western Shield Label acquired DAC Labels & Graphic Specialties, extending from its California base to the acquired location in Dallas, Texas. USA/Docufinish, a label printer in Yorkville, Illinois, was acquired in a management buyout.
Commercial Printing and Diversified Services
Kingery Printing Company, a commercial web and sheetfed printing company with operations in in Effingham and Henry, both in Illinois, acquired United Graphics* in Mattoon, Illinois. In addition to providing commercial printing services, United Graphics brings expertise in book printing and binding to the newly combined companies.
Anstadt Communications, based in York, Pennsylvania, reached all the way to Milwaukee, Wisconsin to acquire Central File Marketing, a provider of direct mail and marketing services specializing in the rent-to-own industry.
Thomas Printing, headquartered in Kalispell, Montana, acquired commercial printer Artcraft Printers in Billings, also in Montana. Commenting on the acquisition and in a timeless testament to the grit it takes to succeed in today’s printing industry, the senior owner of Thomas Printing stated for the local paper, “The giant oak is just a little nut that held its ground,” Frank said. “It’s been a long road. I’ve been fighting this goddamn game for 80 years, so pretty soon here we’re going to make it work.”
* Graphic Arts Advisors, publisher of The Target Report, served as advisors to Kingery Printing Graphics in this transaction.
2017 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 Release |
|||
Regent | No Data | Beverly Hills, CA | Sunset Magazine (Prop. Time Inc.) |
No Data | New York, NY | 11/30/17 | No Data | Acquisition | Magazine publishing | Link | |||
USA/Docufinish Mngt. | No Data | Yorkville, IL | USA/Docufinish | No Data | Yorkville, IL | 11/29/17 | No Data | Mngt. Buyout | Label printing | Link | |||
LSC Communications | $3,520 | Chicago, IL | The Clark Group (Port co. The Gores Group) |
No Data | Hamilton, NJ | 11/29/17 | No Data | Acquisition | Print logistics | Link | |||
Western Shield Label | No Data | Rancho Dominguez, CA | DAC Labels & Graphic Specialties | No Data | Dallas, TX | 11/28/17 | No Data | Acquisition | Label printing | Link | |||
Kingery Printing Company | No Data | Effingham, IL | United Graphics | No Data | Mattoon, IL | 11/28/17 | No Data | Acquisition | Commercial printing | Link | |||
Meredith | $1,710 | Des Moines, IA | Time | $2,880 | New York, NY | 11/26/17 | $2,800 | Acquisition | Magazine publishing | Link | |||
Thomas Printing | No Data | Kalispell, MT | Artcraft Printers | No Data | Billings, MT | 11/21/17 | No Data | Acquisition | Commercial printing | Link | |||
TricorBraun (Port co. AEA Investors) |
No Data | St. Louis, MO | Taipak | No Data | Richmond, BC | 11/16/17 | No Data | Acquisition | Flexible packaging | Link | |||
Anstadt Communications | No Data | York, PA | Central File Marketing | No Data | Milwaukee, WI | 11/14/17 | No Data | Acquisition | Direct mail & marketing | Link | |||
Hot Frog Print Media | No Data | Mechanicsburg, PA | Printed Image | No Data | Carlisle, PA | 11/10/17 | No Data | Acquisition | Commercial printing | Link | |||
LSC Communications | $3,520 | Chicago, IL | Quality Park (Div. Cenveo) |
No Data | Minneapolis, MN | 11/9/17 | No Data | Acquisition | Envelope manufacturing | Link | |||
Graphic Packaging | $4,350 | Atlanta, GA | Seydaco Packaging | $40.0 | Mississauga, ON | 11/9/17 | No Data | Acquisition | Folding cartons | Link | |||
Mullen Family | No Data | Buffalo, WY | The Nugget | No Data | Sisters, OR | 11/8/17 | No Data | Acquisition | Community newspaper | Link | |||
Martin Yale Industries (Port co. LV2 Equity Partners) |
No Data | Wabash, IN | Dry-Lam | No Data | Shawnee, KS | 11/8/17 | No Data | Acquisition | Laminating equip. & films | Link | |||
Blackford Capital | No Data | Grand Rapids, MI | Kingsport Book | No Data | Church Hill, TN | 11/6/17 | No Data | Acquisition | Book binding services | Link | |||
Sentinel Capital Partners | No Data | New York, NY | Nekoosa (Port co. Wingate Partners) |
No Data | Nekoosa, WI | 11/2/17 | No Data | Acquisition | Specialty papers | Link | |||
Sun Chemical (Div. Dainippon Ink & Chemicals) |
$7,500 | Parsippany, NJ | Transitions Digital Graphics | No Data | Santa Barbara, CA | 11/1/17 | No Data | Acquisition | Specialty inks | Link | |||
HH Global | $358.6 | Sutton, UK | PostNL Print Management | $23.5 | The Hague, Netherlands |
11/1/17 | No Data | Acquisition | Print management | Link | |||
Nosco (Sub. Holden Industries) |
No Data | Waukegan, IL | Knight Packaging Group | No Data | Chicago, IL | 11/1/17 | No Data | Acquisition | Folding cartons | Link | |||
Allegra Bozeman (Franchisee) |
No Data | Bozeman, MT | Bozeman Printing | No Data | Bozeman, MT | 11/1/17 | No Data | Acquisition | Printing & copying | Link | |||
Transcontinental | $1,612 | Montreal, QC | Flexipak | No Data | Montreal, QC | 11/1/17 | No Data | Acquisition | Flexible packaging | Link | |||
2017 November - Bankruptcy Filings in the Printing, Packaging, Paper & Related Industries | ||||||||||||
Filing Party |
Date Case Filed |
Pre-Petition Revenues ($Mil ) |
Case # |
Filing Party Address |
Circuit |
Region & City |
Judge |
Attorney for Debtor |
Notes |
|||
Chapter 11 Filings: | ||||||||||||
Jones Printing LLC | 11/10/17 | No Data | 17-15187 | Chattanooga, TN | 6th | Eastern TN Chattanooga |
Shelley D. Rucker | David J. Fulton | Commercial printing | |||
Chapter 7 Filings: | ||||||||||||
No Rush Charge Reprographics, Inc. | 11/28/17 | No Data | 17-14649 | Irvine, CA | 9th | Central CA | Erithe A. Smith | Renee Nasiri | Reprographic services | |||
2017 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 |
|||
NMD&D | 12/14/17 | No Data | Irving, TX | None | N/A | Nov-17 | Transactional printing | Link | |||
Riegel Communications Group | 12/13/17 | No Data | Ewing, NJ | None | N/A | Nov-17 | Commercial printing | Link | |||
Dutton Press | 12/12/17 | No Data | Hialeah, FL | None | N/A | Nov-17 | Commercial printing | Link | |||