Ropkey Graphics buys SPG amid wave of consolidation in the Midwest
Press release from the issuing company
July 8, 2003 -- (Indianapolis Business Journal) -- The tumult in central Indiana's printing industry continues. Ropkey Graphics, which recently emerged from Chapter 11 bankruptcy and changed ownership, has bought SPG Graphics Inc., the area's seventh-largest commercial printer.
The deal quadruples Ropkey's size.
Ropkey also was in pursuit of bankrupt Hilltop Press late last month, but lost that bid to National Graphics Inc., on the city's near-west side.
Terms of Ropkey's acquisition--which closed June 27--were not disclosed. SPG owners Robert Purvis and Linda George said the decision was difficult, but they think selling to the new Ropkey management will assure jobs for their 88 employees and continued service for SPG clients.
SPG reported $9.7 million in sales in 2001, ranking it seventh in IBJ's 2003 Book of Lists. The firm reported sales of $10.1 million in 2000. Purvis and George plan to retire, but have promised Ropkey officials they will help with the transition.
Under new ownership since May, Ropkey has emerged as one of the leading local consolidators in the fractured industry.
Rick Ropkey and his father Fred finally decided to sell Ropkey Graphics this spring after the business had been in the family 113 years. They sold it for $420,000 to former Saint Clair Press President David Harding and Saint Clair Sales Manager Bob Poorman, who was once the owner of the powerful print shop Shepard Poorman Communications Corp.
Industry sources said Harding and Poorman got Ropkey for a song.
The new owners said SPG surfaced as a good match for their operation. Ropkey specializes in signs, prepress work and electronic printing, while SPG has the capacity to handle larger-format printing with 25- and 40-inch presses. SPG also specializes in computer-to-plate and comprehensive bindery services.
Within 60 days, Harding said, Ropkey Graphics will move from its 20,000-square-foot East Street facility downtown, still owned by the Ropkey family, into SPG's 55,000-square-foot headquarters in Park 100 on the northwest side. Ropkey employed about 20 before the merger.
Another enterprise part-owned by Harding--Full Court Press, which specializes in small-format printing, variable data management and mailing--also will move into the SPG facility.
The acquisition reunites Poorman with SPG, which he founded as a division of Shepard Poorman Communications in 1990, and sold in 1996 to Purvis and George when he sold his larger company to a national consolidator.
SPG was attractive in part because it remained economically viable while many in the industry foundered, Harding said. While Harding said Ropkey Graphics will take some time to digest its most recent deal, the company will continue to grow through acquisitions.
"Although some industry experts point to the difficulties many printing companies are experiencing, we believe there are more opportunities than challenges," Harding said. "The printing industry has been slapped around over the last couple years. We want to build faith with our clients and also our employees."
Harding and Poorman intend to offer employees an ownership stake to build loyalty and a stronger work ethic. They also intend to attract printing business that is flowing out of state.
This is not Harding's and Poorman's first attempt at building a business. Poorman, who helped found and grow Shepard Poorman into a company with annual revenue of $62 million, sold his operation in 1996 to Englewood, Colo.-based Mail-Well Inc.
Harding owned and operated The Printing Co., which he sold in 1998 to what is now Premiere Print Holdings, a consolidator now based in Houston, Texas. The company later merged with locally owned White Arts Inc., and the local division became Saint Clair Press.
But the duo was outbid for highly prized Hilltop Press by National Graphics, which ranked 11th in the 2003 IBJ Book of Lists, with 2001 annual revenue of $7 million.
National took on $6.4 million in secured debt acquiring Hilltop out of bankruptcy and could pay out another $1.5 million to Hilltop's unsecured creditors. National Graphics had 55 employees before the acquisition, while Hilltop had 84. About 12 Hilltop positions have been trimmed since the acquisition, said Dennis Stephenson, National Graphics co-founder.
Hilltop Press reported sales of $15.4 million in 1999, but became overextended with capital expenditures in the last two years, and was hurt when Eli Lilly and Co. and other clients began shipping work out of state or took the work in house. National Graphics will now consolidate its business in the new, 140,000-square-foot facility in Park Fletcher that Hilltop invested heavily in, and which helped drive it into bankruptcy.
Despite difficulties, Hilltop's quality never wavered, Stephenson said.
"The benchmark has always been Hilltop quality," he said. "This company has a lot of great employees."
The Hilltop acquisition will help National Graphics keep up with the growing demands of its clients, Stephenson said.
"It's hard to survive being just a printer," he said. "It's got to be more than putting ink on paper."
Stephenson's firm now will be better able to help clients with larger-format printing as well as distribution, warehousing of printed materials and better management of the printed materials needed through a Web-based system.
"We think we can grow and expand this operation," Stephenson said. "We want to offer the best service and stay focused on the customer. You have to become [a client's] partner."
While Stephenson thinks the industry shake-out is concluding, Harding thinks those not prepared to adapt will continue to fall on hard times.
"Mom and Dad taught us not to spend what we didn't have," Harding said. "Unfortunately, printers get equipment-happy. Now the printers are fighting each other over price, and that doesn't do anyone any good. I expect the shake-out to continue through this year and into 2004."
Source: Indianapolis Business Journal, By Anthony Schoettle, IBJ Reporter
Copyright 2003, All Rights Reserved, Indianapolis Business Journal
Used with permission. For more information, visit www.ibj.com
WhatTheyThink is the global printing industry's go-to information source with both print and digital offerings, including WhatTheyThink.com, WhatTheyThink Email Newsletters, and the WhatTheyThink magazine. Our mission is to inform, educate, and inspire the industry. We provide cogent news and analysis about trends, technologies, operations, and events in all the markets that comprise today's printing and sign industries including commercial, in-plant, mailing, finishing, sign, display, textile, industrial, finishing, labels, packaging, marketing technology, software and workflow.