CONSOLIDATORS – Slowing, but Growing

Thompson: While 2000 has certainly not been as active for us at Mail-Well in terms of the number of acquisitions as have some past years, it was our second most active year in terms of acquired sales—more than $560 million. Obviously, our acquisition of American Business Products (ABP) in February represented the lion’s share of these sales. The ABP acquisition was the largest deal we have done to date. At the time we acquired it, ABP had sales of over $475 million.

So far this year, our commercial printing acquisitions are Braceland Brothers Printing in Philadelphia; Strathmore Press in Cherry Hill, NJ; and Craftsman Litho, in Waterbury, CT. Finally, we acquired a publicly held envelope manufacturing company in Canada: CML Industries.

Kashan: During our fiscal 2000-year, we acquired Media Printing, a full-web printer in Pompano, FL. This strategic acquisition was a good fit because it allowed us to produce full-web printing in a lower cost center and expand our product offerings.

PI: How would you characterize this year on the consolidation front, both from your company’s perspective and the industry at large?

Norton: The year 2000 was a year in which it appeared there were very few acquisitions by consolidators or even strategic buyers, probably because: 1. anticipated acquisition prices in the prospective sellers’ minds had reached unprecedented heights; 2. the financial markets viewed printing companies less than favorably; and 3. many of the most active consolidators missed their earnings projections, their stock prices took a beating, and then they began to focus on internal operations and the repayment of debt.

Davis: The latter part of 1999, and early part of 2000, saw lots of marketing dollars on Websites and Internet-type advertising as a result. Commercial printing volume was a little light during this period. Since the first of March, our business has been strong compared to the prior year as a result of this short period of soft business. Consolidation in the commercial printing industry has, perhaps, had somewhat of a lull, but I would expect good companies to continue making acquisitions—we certainly plan to.

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