The future is becoming increasingly cloudy and uncertain for regional and community newspaper publishers; readers are drifting away from the printed form of news, and advertising revenues decline in lock step. Transactional activity over the past several years indicates that publishers of newspapers, from small community weeklies to major metro dailies, are seeking shelter from the storm by adopting several strategies that they hope will restore the clear sailing that many newspaper-owning families enjoyed for generations.

The strategies we see repeated across the country include: centralizing and/or outsourcing print operations in new highly efficient facilities, adding services traditionally offered by advertising agencies including internet-based services, adopting pay-to-read technologies to break away from free online content models, and finally simply selling out to one of several industry consolidators. With the exception of those exiting the newspaper publishing business completely, what lies on the other side may be just as daunting as the journey of the past several years.

Dix Communications, a family-owned fifth generation publisher of 23 community newspapers and related magazines and guides, and also owner of several radio stations, has announced its intention to divest its newspaper properties in western Ohio and central Kentucky, as well as four radio stations in Maryland. The company will focus on its remaining papers in eastern Ohio which are printed at and delivered from its centralized production facility in Wooster, Ohio.

Prior to the development of online advertising, community and regional newspapers were in the enviable position of being absolutely the most effective vehicle for advertisers to reach local audiences. With the addition of acquired radio stations, the newspaper publishers had a unique relationship with the people in the communities they served. This relationship often spanned several generations, and in the case of Dix Communications, extends back 120 years. As the winds of internet-enabled change swept away the value of this unique relationship, publishers are heading upwind into marketing services where advertising agencies rule the seas. Dix Communications is applying this strategy and now owns an ad agency, and is actively seeking additional acquisitions in related marketing services.

Navigating the same currents as Dix Communications, A.H. Belo has charted these strategic waters, selling off its distant paper, the Providence Journal, last year (see The Target Report – July 2014) and landing contracts to print newspapers for other publishers in its efficient centralized facility. The company, which also publishes The Dallas Morning News and The Denton Record-Chronicle, both in Texas, moved further upwind to bolster its marketing services division, DMNmedia, which provides marketing solutions, including digital, print, mobile, direct marketing, social media, research and creative services, promotions and events. The division acquired three related companies, Distribion, Vertical Nerve and Marketing FX. The acquired companies specialize in local marketing automation, search engine marketing, direct mail and promotional products (see The Target Report – January 2015).

As publishers struggle to slow the outgoing tide of lost revenues, the lure of getting some wind in their sails from internet traffic beckons with the promise of new revenue streams. Erecting levees in the form of “paywalls,” the publishers provide paying customers access to otherwise restricted content. Originally developed and championed by large branded properties, such as The New York Times and the Wall Street Journal, that could afford to develop the necessary software, paywalls became possible for all sizes of publishers via software developed and offered by independent providers. In a quickly consolidating market for the software, Budapest-based private equity fund 3TS Capital Partners backed Piano Media in its merger with Tinypass. The new company, renamed simply Piano, now has the commanding lead in the market for independent paywall software, enabling smaller publishers to establish pay-to-read barriers like the big guys.

Commercial Printing

It has overall been a very quiet summer for mergers and acquisitions in the mid-size general commercial printing segment despite regular predictions of massive (and necessary) consolidation among commercial printers. An exception to the lull in M&A activity in this segment was the acquisition by ImageMark Business Services, a commercial printer in Gastonia, North Carolina. ImageMark acquired Catawba Direct Marketing, bringing direct mail expertise to the combined firm.* Independent Printing of DePere, Wisconsin, a diversified commercial printing company, acquired nearby PrimaGraphics, thereby expanding its offering to include more traditional products such as business forms, checks and security documents.

The steady beat of print providers merging with, acquiring, or being acquired by marketing services companies continues. Traffic Builders, a print-centric marketing firm in Louisville, Kentucky serving the automotive industry, was acquired by GS Marketing in Houston, Texas. Also dedicated to serving automotive dealers, the company announced that the GS group will focus on data and technology while the acquired Traffic Builders organization will be dedicated to increased print production.

In an interesting twist demonstrating the unique value inherent in some specialized printing techniques, several states have limited the number of birth, death and similar certificates that can be issued due to the closure of Sekuworks in Harrison, Ohio. The closed company specialized in printing that includes unique anti-counterfeit features, including intaglio printing that the affected states require for certain documents. We presume that the states will find alternate suppliers, or change the requirements.


The aggressive global roll-up of packaging printing companies got another boost with the announcement that New York-based private equity firm Wellspring Capital Management added flexible packaging and label printer Prolamina to its existing portfolio company Ampac Holdings. Ampac has manufacturing facilities in seven countries in Europe and Southeast Asia, as well as in the US.

Global packaging heavyweight Multi-Color Corporation, a very frequent entry on the buy-side in our deal logs, is back again with the acquisition of the Super Label Group, a Malaysia-based producer of prime labels with operations throughout the Southeast Asia region and China.


Transaction activity remains brisk in the paper and related industries. Newly formed WestRock, the combination of RockTenn and Westvaco, has not wasted any time after the merger getting back into an acquisition mode. WestRock acquired SP Fiber Holdings, producer of recycled containerboard and kraft grades. The transaction, valued at close to $300 million, included a minority interest in a renewable energy company that provides power to the public grid as well as steam to the newly acquired paper mill in Dublin, Georgia.

Multi-billion dollar global private equity firm, H.I.G. Capital, with a current portfolio of more than 100 companies, exited its investment in AR Metallizing, a Belgium-based manufacturer of metallized paper stocks, most often used as a decorative element in packaging applications. The buyer was Nissha Printing Co., based in Kyoto, Japan. In addition to printing and publishing, the company develops and markets unique industrial applications of printing technologies, such as gas sensors, medical patches, and membrane switches.

*Graphic Arts Advisors, publisher of The Target Report, served as advisors to the owners of Catawba Direct Marketing in this transaction. 

View the complete M&A report for August 2015