The Target Report: Print Providers Seek Variety Via Acquisitions—September 2024 M&A Activity

As the commercial print industry continues to evolve, more printing companies are moving upstream into multi-channel digital marketing services to better serve their customers. Digital marketing services enable printing companies to escape the traditional printing company job?shop business model and differentiate themselves from competitors that only print. As digital print engines of all types become ubiquitous, the integration of digital marketing methods with variable print campaigns is a natural next step for industry leaders who are thinking ahead. The right acquisition can prove to be the quickest and surest path to build out the desired diversity of services.

From Color Separators to Multi-Channel Digital Marketers

In September, Scottsdale, Arizona-based Artisan Colour acquired MarComm, a digital marketing agency that specializes in cross-channel marketing strategies and campaign integration. The company’s stated goal is to “dissolve the boundaries between print and digital to provide a unified approach where print and digital strategies are seamlessly integrated, data is leveraged across channels, and every touchpoint is optimized.” Services offered, in addition to the company’s traditional print-centric products, now include marketing strategy, CRM/HubSpot implementation, web design, SEO, content marketing, social media, and, not to be ignored, integration of those digital marketing services with print.

According to the company’s website, the owners’ journey to the diversity achieved with this acquisition began at the end of the last century when their knowledge in the now extinct art of color separations gave them the confidence to start their own company. The color separation business led naturally to the addition of a full-service on-site photo studio. Combined with these services, color management expertise helped the company land the catalog production work for demanding high-end retail companies Neiman Marcus, Chicos, and Patagonia. In 2009, following the path of many color separation companies (or at least those that managed to survive the transition to digital imaging), Artisan Colour acquired Mighty Imaging, a local wide-format printing company. Digital sheetfed printing was eventually added, a necessary element needed to set the stage for the move into comprehensive integrated multi-channel marketing services.

Digital Acquisitions Transcend Geographic Boundaries

In July, New York-based Lorraine Gregory Communications acquired Axle Eight, a digital marketing services company located in Scottsdale, Arizona. Lorraine Gregory, historically a print-centric company, has been steadily expanding its offering of marketing services. This latest acquisition gives the company a foothold in the Southwest US market, and enhances the company’s marketing expertise in advertising, SEO, content creation, email marketing, strategy, public relations, and social media. The Axel Eight staff had transitioned to at-home work during the Covid pandemic, and the plan is to continue working remotely as part of the Lorraine Gregory team.

Lorraine Gregory has its roots in direct mail and lettershop services. Acquired by the current owner in 1992, the company took a direction not often taken by print-centric businesses, adding a video studio, and entering the business of TV commercial production. By combining traditional print, video production, and now digital marketing services, Lorraine Gregory is positioned as a multi-channel marketing service provider.

Just over a year ago, the Marek Group, a diverse graphics company based in Waukesha, Wisconsin, acquired HighNote, a marketing services company based in Louisville, Kentucky. This acquisition is another example of a company that started purely as a printing operation that has steadily and intentionally moved upstream into marketing execution services. The addition of HighNote enhances Marek's ability to blend print and digital marketing offerings to meet the growing demand for integrated marketing solutions. The purchase is also illustrative of the geographic regional expansion trend we see in the commercial printing segment, as this acquisition expands the Marek Group’s reach into the South-Central US markets.

The strategic goals achieved by Lorraine Gregory and the Marek Group with the acquisitions of Axel Eight and HighNote, respectively, adding digital marketing services and achieving regional geographic diversity, is consistent with current market trends and the rationale behind many of the M&A deals within the commercial printing segment over the past three years. (For more, see: The Target Report Annual Review – TTM August 2024 M&A Activity.)

Marketing Execution at Scale

CJK Group, one of the largest players in the US market for print services, acquired the Kodi Collective division of LSC Communications in February 2024. In addition to print solutions, the Kodi Collective website extolls the company’s digital marketing production, photography & video studio services, experiential marketing, and marketing execution outsourcing. The acquisition of the Kodi Collective was another step in CJK’s long-term diversification of services offered.

However, the acquisition of Kodi Collective seemed out of character for the CJK Group as it appeared to be a major departure from CJK’s consistent focus on acquiring companies in book manufacturing and publication printing. In the space of 10 years, CJK Group had grown via acquisition to become one of the dominant US companies in book manufacturing and journal printing. The company has kept up a steady drumbeat of acquisitions since 2013, when CJK’s predecessor company, Bang Printing, completed a Section 363 asset purchase in the Chapter 11 bankruptcy proceeding of book printing company Hess Print Solutions.In 2017, CJK acquired Sheridan, which established CJK as a major player in the journal printing business. Many more acquisitions followed, including the recent acquisitions of book manufacturing companies Worzalla, based in Stevens Point, Wisconsin, and McNaughton & Gunn, a book manufacturing company in Saline, Michigan. (For more, see: The Target Report: Book Manufacturing in Turmoil – May 2024.)

In 2020, CJK added upstream services with the purchase of Cenveo’s global content services business. That acquisition added layers of services on top of CJK’s core ability to print publications, including project management, content development, editorial services, peer review management, art and design services, rights and permissions management, translation and accessibility services, eLearning, and online hosting. (For more, see: The Target Report: CJK Goes Global as Cenveo Unwinds – September 2020.)

In March 2023, when LSC Communications announced the formation of the Kodi Collective brand, it seemed, at least from our perspective, that the new division was an odd mix of hard-core high-volume printing assets, print management outsourcing, marketing execution, and creative services. Wasting no time, CJK has begun to rationalize the Kodi brand by shedding non-core assets and retaining a coherent mix of print and marketing execution services. In late September, CJK announced the divestiture of Kodi’s high-volume printing operation in Maple Grove, Minnesota, selling the plant to Arandell, the catalog and publication printing company now owned by Saothair Capital. Also in September, CJK announced that the digital printing division, which had been subsumed into the Kodi Collective brand by LSC Communications, would be spun out and resume operating under its original brand identity, Digital Lizard. As we write this Target Report, CJK has announced the closure of the Kodi printing facility in Danville, Kentucky, in a further focusing of the Kodi brand and services.

As Print Goes Digital, Digital Accepts Print

The increasing use of digital print engines has brought new skills into many printing companies. It is now not uncommon to have data analytic and coding expertise in-house, skills that are needed on a daily basis to drive personalized and automated-response print campaigns. At the same time, the proliferation of digital marketing service companies has led to the need for all?digital marketing companies to differentiate themselves from the crowd. With the proven effectiveness of tangible printed content that is combined with a multi-channel approach to marketing, the technical and cultural divide between providers of digital marketing execution services and printers has lessened. Printer and digital marketing types have learned to play nicely together in the same sandbox.

Recent transactions exemplify how commercial print providers are leveraging acquisitions to effectively and efficiently build out digital marketing capabilities. Digital marketing companies are finding that print is indeed not a dead medium, but rather that a printing company with digital expertise can be a solid platform and landing spot for their businesses when it is time to sell.