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CGX Signs New Deal With Komori

November 2003
CHICAGO—It seemed many printing companies were willing to pull out their check books during brisk business at GRAPH EXPO and CONVERTING EXPO, held here late September.

But Joe Davis and Houston-based Consolidated Graphics (CGX) may have signed the biggest promissory note of all of the show attendees after announcing that CGX would renew a five-year, $50 million purchasing agreement with Komori America.

Davis, chairman, president and CEO of CGX, joined Komori America President Stephan Carter, Komori Corp. President Yoshiharu Komori and other members of both organizations in announcing the renewed partnership, first signed in 1996.

"I'm very pleased with the performance of the equipment that we purchased during the five-year period, and am especially happy with the level of service we received," Davis says. "I'm impressed with the R&D commitment Komori has made toward sheetfed machines. They're spending $30 million a year in research and it's resulting in interesting new products to improve the quality and efficiency of their equipment."

CGX, which boasts 65 companies in 25 states, made its first acquisition under the new deal by installing a six-color Komori Lithrone S40 with coater at Mount Vernon Printing in Landover, MD.

Of all the elements that attracted Davis to Komori, service was a major consideration. "They're not a fractured company that manufactures everything; they only make sheetfed and web printing presses. That gives them a distinct advantage in the marketplace."

Komori's Carter felt there was an ideal fit between CGX and his company. "Our ability to focus on major, national accounts was a big factor," he says. "We like partnering with a company such as CGX, which has a superior industry consolidation model.

"We can analyze their work base and determine what level of technology they require. It's a proactive engagement—I can't think of a better way to improve both companies."

Davis notes that future acquisitions by his company will help guide subsequent press purchases. Under the status quo, he envisions buying five 40˝ sheetfed and one half-web press in the coming year.

The company recently closed on a deal that saw it acquire Ohio-based Custom Graphics, which will be merged into another CGX company, AGS, to form AGS Custom Graphics.

"In this economy, we're seeing a lot of opportunities to acquire companies and combine them with our existing operations," Davis says. "The result is a stronger list of customers."

A strong balance sheet, arguably the strongest of any industry consolidator, has enabled CGX to remain active in both the printer and machine acquisition theaters in a sour economy. Despite the economy, Davis reports that most individual facilities under the CGX umbrella have increased their year-to-year revenues.

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