After purchasing StanMont this summer, Cenosis Inc. announced that they will acquire a majority stake in Leading Graphics. Leading Graphics had $9 million in revenue in 1999. Their clients include large ad agencies and corporate offices. Cenosis is a high-technology company active in the design and development of workflow software for the print media and publishers. According to John Negru, Director for Convergent Solutions for Leading Graphics, Cenosis originally approached Leading Graphics in early October. The Memorandum of Agreement was signed on October 31. Cenosis is best known for their newspaper workflow software solutions. They are 20% owned by Bell Nexxia. They also have a subsidiary called KangaCom, which is in the business of wide bandwidth digital transfer of heavy files via ADSL. Says John, "KangaCom targeted the graphics industry as a prime user of this type of service like Wam!Net, Vio, Noosh and FileFlow. However, in their business model for our industry, Cenosis decided that mere transfer of files was not enough. They also realized that for the graphics industry to accept digital delivery of advertising to publications and CtP printers, there would need to be some intelligence in the pipeline. Someone would have to be there to take responsibility for the accuracy and quality of the files, to make changes if necessary, and to work with clients on an ongoing basis. That's where we came in, as well as our now-sister company StanMont." The new direction of Cenosis appears to be owning the whole file transfer process. "To use the analogy of a toll highway: people take toll highways because they are faster than regular ways of getting from A to B. The cost of entry is lower than the lost opportunity cost and excess gasoline use of other routes. Bell has the highway infrastructure to move the files. Cenosis and KangaCom have the technology for the entry and exit ramps and the toll booths, to keep track of everything. But it takes a company like ours to get out there and successfully market the opportunity. In a simple sense, Cenosis was merely buying market share with us. But in a more forward-looking sense, they saw in us a company with a 30-year track record of innovation and success and great plans for the future." The merger will make both companies stronger for the future. Negru continued, "In the world of graphics, DDAP is still a young technology but we all know that film is soon to be a thing of the past. Vendors who don't offer a complete solution to advertisers, publishers and other marketers will fall by the wayside. That is why we are very excited about joining the Cenosis family. We will be able to offer the graphics expertise, the software tools and the bandwidth that will make DDAP a reality now." As for Cenosis buying it's customers and competing with it's other customers, John said it is a matter of survival. "I have no doubt that some prepress companies are very upset by these developments. The fact is, lots of prepress companies have already disappeared because they couldn't adapt to changes in the way work is done. This deal is just one more example of much larger forces at work in our industry. We saw the same dynamic with the introduction of the Mac, PDF workflow, CtP, and many other technologies." "With regard specifically to other KangaCom customers, I think that their concerns are a bit premature. The beauty of KangaCom is that it is a network-centric open system, not point-to-point. We have no access to their files when they send direct and we have no desire to plunder their client list. Furthermore, in our industry we all routinely receive files from many of our colleagues for processing of various kinds and nobody complains about that. The only difference here is that the delivery is digital." Although John said he does not speak for the overall Cenosis strategy, the trend is clear. "I feel they realized there was no point in just sitting around waiting for our industry's collective inertia to magically evaporate, so they took a more proactive stance."