A Maine newspaper group has cleaned up its balance sheet, improved the quality of its journalism, and plans to improve the efficiency of its print operations. MaineToday Media announced that it is being purchased by local businessman and publisher Reade Brower. Brower teamed up with Chris Miles, his partner in another venture, Alliance Press, to purchase the papers from billionaire hedge fund manager S. Donald Sussman. Sussman saved MaineToday Media, Maine’s dominant news organization, from almost certain closure in 2011 when he purchased the insolvent company from HM Capital Partners.
Sussman reportedly invested a total of more than $16 million in the publishing company. He appears to be walking away happy even though the entire proceeds from the latest sale are going to pay down company debt. In an eloquent commentary on the value of maintaining high journalistic standards in the print medium, Sussman stated that it was his “honor to have been the steward of these trusted newspapers.” It remains to be seen if the buyers have caught the falling knife (the company has been sold four times in 17 years, each time for far less than before), or if they can continue to uphold the “value of local, quality journalism and the civic responsibility the paper has to its community.”
This commitment to produce exceptional reporting stands in stark contrast to the model of delivering repetitive, regurgitated content delivered via online aggregators. Poor quality content apparently does not hold up, as evidenced by the recent closure of the Philadelphia-based company Brand.com. Originally named Reputation Changer, the company was in the business of writing positive articles about folks who had numerous negative online reviews. The company then flooded online sites with the ersatz positive articles in hopes that the onslaught would push negative articles below page one on Google. When Google got wise and changed its algorithm to minimize the effectiveness of the article blitz, Brand.com switched gears. In the journalistic version of advertising disguised as independent reporting (so-called “native advertising”) the company began offering “commission reporter-written articles.” The strategy failed, there was no billionaire hedge fund savior for Brand.com. The company filed for Chapter 7 liquidation in April.
Note: As regular readers of The Target Report will know, we stay away from the futile defense-of-print debate. The chips will fall where they will as consumers decide how to view their news, read their books and obtain intellectual content. Nonetheless, we suspect that the folks in Maine are happy to have reporting they can trust, sustained through the survival of their local newspapers.
Acquisition activity in the commercial printing segment picked up. As we have predicted in our last two annual projections, wide format printing companies continue to be attractive targets for commercial printing companies which seek to cross-sell the new services into their existing clients. As a bonus, the acquiring company adds new clients for their traditional printing services. NextPage in Kansas City, Missouri acquired Print Big Solutions, stating this exact strategy as their rationale for the deal. DOME Print & Marketing Solutions, a web and sheetfed commercial printer in Sacramento, California, acquired wide format printer Color Solutions. With backing from Ancor Capital Partners, Tennessee-based Identity Group Holdings acquired retail signage supplier Allen Screen Printing in Maine.
Commercial printers consolidated with other commercial printers. MET Fine Printers, located in Vancouver, British Columbia acquired Rhino Print Solutions with facilities in Vancouver and Calgary, Alberta. Neuger Communications Group acquired Engage Print, both located in Northfield, Minnesota. Grafika, a printer in Sinking Spring, Pennsylvania, acquired Reading-based Offset Impressions.
PE fund Waveland Investments picked up retail circular printing company Doodad with facilities in Georgia and Pennsylvania.
Atlanta-based marketing services provider and printing company Phase 3 Marketing & Communications acquired boutique creative studio Brand Fever. The acquiring company offers traditional services including digital and offset printing, graphic design, warehousing and fulfillment, and has also moved upstream into branding, strategic planning and social media.
The packaging segment was uncharacteristically quiet in April, however Pratt Industries, which has common ownership ties to papermaking assets in Australia, picked up Robert Mann Packaging for $60 million. The acquired company will use imported lightweight kraft paper from its new owner to produce its corrugated cartons which are used primarily for packaging food and other agricultural products.
Lettershop & Direct Mail
EU Services in Rockville, Maryland, announced the acquisition of Sisk Mailing Service. The Sisk operations were integrated into EU Services’ two locations. EU Services was itself acquired in August, 2014 by Maidstone Capital, which also owns Com-Pak Services in Moorestown, New Jersey.