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Commentary & Analysis

The Roll-Up Returns (to Commercial Printing) – September 2014 M&A Activity

It’s been a long downhill slide for roll-up activity in the commercial printing industry. The major players have either exited the field (Consolidated Graphics), partially disintegrated (Nationwide Argosy, né Nationwide Graphics), or struggled with their own lack of clear strategic direction (Cenveo, né Mail-Well). That void may soon be filled by regional players that are stretching beyond the boundaries of their original core operation. In contrast to those aforementioned major league teams that were fueled by shares issued in the public markets, the new draft of contenders are energized and coached by private equity funds flush with cash and the ability to borrow at very favorable rates from eager lenders.

By Mark R. Hahn
Published: October 7, 2014

It’s been a long downhill slide for roll-up activity in the commercial printing industry. The major players have either exited the field (Consolidated Graphics), partially disintegrated (Nationwide Argosy, né Nationwide Graphics), or struggled with their own lack of clear strategic direction (Cenveo, né Mail-Well). That void may soon be filled by regional players that are stretching beyond the boundaries of their original core operation. In contrast to those aforementioned major league teams that were fueled by shares issued in the public markets, the new draft of contenders are energized and coached by private equity funds flush with cash and the ability to borrow at very favorable rates from eager lenders.

OneTouchPoint, a roll-up headquartered in Chicago, appears ready to make the leap to the majors. The company was sold in September to ICV Partners, a private equity fund committed to “take OneTouchPoint and its platform to the next level.” Originally named TouchPoint Print Solutions, the company was founded only seven years ago with support from Huron Capital Partners, its previous owners. OneTouchPoint now employs over 950, with acquired operations in Wisconsin, Ohio, Texas and Colorado. Although the company had only one appearance on our deal log in the past three years with its acquisition of Ginny’s Printing in Austin, Texas in December, 2011, I expect we’ll see more action from the new owners.

The Mittera Group, headquartered in Des Moines, Iowa, has been on a roll, consolidating printing companies in its backyard in Iowa. Last year, the company began expanding geographically with its acquisition of Wisconsin Web Offset. The company just announced another acquisition of J.B. Kenehan, a commercial printer with two web and sheetfed plants in Wisconsin. The company reports that this latest acquisition brings the combined sales to $135 million with 750 employees.

The Garvey Group has been a repeat acquirer on our deal log, most recently acquiring retail display printer Troyk printing in Franklin, Michigan this past May. Especially interesting was Garvey’s acquisition of Schawk’s wide format division in Los Angeles last year, which gives this Midwest-centric collection of companies the ability to claim itself a national player. (See The Target Report - July, 2013 for more).

And maybe, just maybe, we shouldn’t count Nationwide Argosy out. The former 90’s roll-up star has pared down to just 7 companies in 10 locations, retreating from its national footprint, now concentrated in Southeast and Texas. The company’s new website proclaims a strong balance sheet, and states that the company is actively seeking companies to join the Nationwide Argosy family of printing companies.

In the newspaper segmet, Adams Publishing Group continues its steady drumbeat of acquisitions as it rolls-up local and community newspapers, this month acquiring twice-weekly newspaper, The Athens News of Athens, Ohio. Adams has completed similar acquisitions for three months in a row, following on the heels of its home run deal in March this year in which it acquired 34 newspapers and other properties, stretching from Wisconsin to Maryland.

In flexible packaging, it appears that York, Pennsylvania C-P Flexible Packaging is preparing to get in the roll-up game. With backing from First Atlantic Capital, the company acquired MRI Flexible Packaging with plants in Newtown and Bensalem, Pennsylvania. The fund’s Managing Director, Emilio Pedrioni, was clear that acquiring MRI is the “first step” in building on its investment in C-P Flexible Packaging. It won’t be a surprise if we see more deals bolted onto this flexible packaging platform, supported by First Atlantic.

In contrast to the absence of bankruptcies in August, there were some filings in September, but still significantly fewer than during the past three years. Capitol Litho in Phoenix, Arizona filed for Chapter 11. In Canada, B.L. Litho, a commercial printer in Lavel, Quebec, filed under the Canadian equivalent of Chapter 11, and quickly announced that an employee was buying the assets and would resume operations. Cantrell/Cutter Printing in Capitol Heights, Maryland, called it quits and converted from a Chapter 11 to a Chapter 7 liquidation.

View the complete M&A report for September 

Mark Hahn is a Managing Director and Founder of Graphic Arts Advisors, a boutique strategic financial advisory and consulting firm focused exclusively on the printing, packaging and related industries. He assists company owners and management, as well as their lenders, investors and shareholders in the following areas: mergers & acquisitions, sale of business, strategic and financial advisory, capital structure & funding, financial analysis, interim & turnaround C-level management and business valuations. Mark is the author of The Target Report and is regularly published and quoted in printing industry trade and management journals. Mark can be reached at 973-588-7399 or mark@graphicartsadvisors.com.

 

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