Open Enrollment | Subscribe to Printing Impressions HERE
Follow us on

CONSOLIDATED GRAPHICS -- The Art of Acquisition

November 2005 BY ERIK CAGLE
Senior Editor
Fresh, intensity-riddled faces swarmed the lobby of the Houstonian Hotel, most of them young enough to appear in auditions for an MTV reality show. But aspiring actors these youngsters were not--they hoped to become role players in the ever-growing printing industry dynasty best known by its stock symbol: CGX.

It was late July, and the sixth annual Consolidated Graphics (CGX) National Associates Meeting was in full swing. Despite the fact that most of the participants' drivers licenses indicated a birth date in the 1980s, these participants boasted a confidence, an eager aggressiveness and a tireless optimism regarding their present and future roles with the company.

Chairman and CEO Joe Davis, who had his misgivings about such a gathering heading into the first meeting in 2000, is awed at the timber of participants in the 2005 crop.

"Based on their presentations, I'm really impressed with the quality of the 24- and 25-year-olds we have in this group," Davis says during a time out from the individual breakout sessions. "When I was 24 or 25, I was not at a level quite that good, I can assure you."

If Davis was behind the lead pack at any point in time, suffice it to say he has since picked up the pace. He is the leader of an $873 million a year printing empire. Davis was M&A when M&A wasn't cool. When the capital venture posers decided to latch on to the printing world, Davis kept his head, his game plan and strategic footprint in place. Before long, the best of the rest that M&A had to offer floundered and foundered.

Not Everything Changes

There's no remorse associated with an acquisition by Consolidated Graphics, no icky feeling that would prompt a company to change its name. In fact, keep your name; CGX likes it as much as they like the management team that was in place beforehand.

As for assimilation? Integration? Forget the melting pot. CGX's acquisitions are one reason its balance sheet is so enviable, not because its acquirees fall into lock step.

"The most significant change that we ask them to do is a payroll conversion," Davis says. "Thus, they match the payroll cycles and enjoy the benefits of our payroll program."

Kelmscott Communications was the biggest printer to make CGX's payroll conversion in 2005. Kelmscott ranked 53rd on the 2004 Printing Impressions 400 ranking with sales of $110 million, pushing CGX's overall sales north of the $870 million plateau. Chris Colville, executive vice president and CFO, not to mention arguably the most recognizable face on the printing industry M&A landscape the past decade, single handedly orchestrated the deal for CGX.

Companies Mentioned:


Click here to leave a comment...
Comment *
Most Recent Comments: