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Consolidation--Moguls of M&A

August 1999
The commercial printing industry's leading consolidators share their criteria for the art of the deal.


When one of our industry's acquisitions is among the top financial stories on "CNN," it becomes readily apparent that the world of commercial printing consolidation is heating up rather than slowing down.

The highly anticipated deal that saw Quebecor Printing purchase one of the industry's leading consolidators, World Color Press, for $1.4 billion in cash and stock on July 12, was met by a lot of oohs and aahs. It was an impressive post-Fourth of July fireworks display, to be sure, even though many in the industry had been speculating such a transaction would occur.

Whether the deal shifts the tectonic plates of the commercial printing industry or not remains to be seen, but at least it must be viewed as a large golden nugget in the ongoing consolidation gold rush that's taking place throughout the industry.

Printing Impressions contacted several of the most prominent companies in the consolidation arena to solicit their ideal of how to choose a prospective company—who is targeted, how is a value arrived at, where are the cost savings, as well as their overall objectives.

The list of players are, to a degree, incomplete and, unfortunately, such viable candidates as Big Flower Press, Master Graphics, Applied Graphics Technologies and Champion Industries either chose not to participate or did not respond to repeated inquiries. The following participating companies, however, provide an accurate representation of the state of consolidation in commercial printing.

Mail-Well Inc.
Bruce Thompson, senior vice president of corporate development

WHILE the Englewood, CO-based company does not disclose the terms of its acquisitions, it is known that more than $175 million has been invested in company purchases in 1999 and the figure for 1998 easily topples the $200 million mark.

PI: What types of companies are targeted?

Thompson: We focus our acquisition efforts on companies with excellent track records and with management that wants to stay and be a part of a larger, growing organization, and that are, in fact, for sale. We have found that it's not in our best interests to try to convince an owner(s) that he or she should sell their company. This is a personal decision and one that should not be made hastily.

Absent an operational or sales fit with one of our existing locations, we generally would prefer our potential acquisitions to have minimum sales of $7 million to $10 million. This is a bit dependent on the particular segment of our business in which the potential acquisition will operate. For example, the acquisitions in our Printing for Distributors segment tend to be smaller than those in our Envelope segment. With respect to specialization, we do limit our acquisition efforts to companies that are in one of our existing business segments.



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