Gilson Graphics : Living on the Cutting EdgeJanuary 2012 By Erik Cagle, Senior Editor
Historically, Gilson Graphics wasn't an avid player in the M&A arena, but the Y2K decade saw a stagnation in sales and an accompanying decline in profits. Dave Gilson parlayed some of the profit his business had realized in the 1990s into working capital to acquire similar firms—many of them smaller commercial printers within close geographic proximity to Grand Rapids.
The additions—National Correct Color, Axis Digital Print and Imaging, Photolith Inc., Hastings Press, Commercial Printing Co. (CPC) and Integra Printing (as well as personnel from an educational testing composition plant in Atlantic, IA)—all shared one other trait in that they added a different wrinkle to Gilson Graphics' offerings. They also raised Gilson Graphics' employee total to 160, with two Grand Rapids production facilities to go with the Atlantic, IA, shop.
Two of the bigger deals, CPC (2006) and purchasing assets of Integra Printing (2009), enabled Gilson to grow substantially. Jeff Palmitier, then-owner of Integra and now executive vice president for Gilson Graphics, notes how the previous generation owners had gone head-to-head for decades, operating a half-mile apart.
"When you consider all the technology that my (former) company had invested in, combined with Gilson Graphics' equipment capabilities and financial resources, it made good sense to combine our offering for the benefit of our customers," Palmitier says.
"Dave and I were amazed at how little overlap there was; we competed head-to-head with some accounts, but our sales overlapped by only about 10 percent. That created a very strong company and allowed us to springboard to the future."
While Integra and Gilson featured a lot of the same type of equipment, CPC brought with it a strong agency clientele roster. The CPC deal also added small press capabilities and a strong Web development component to Gilson's menu, notes Dave Oswald, former partner of CPC and now Gilson Graphics' vice president of operations.
"Every time we acquired a new company, we recognized that there was intellectual property that we needed to capitalize on," Oswald remarks. "The biggest challenge in an acquisition is the cultural integration, getting everyone on the same page and working toward the same purpose. It probably took a year to 18 months to integrate each of our recent acquisitions."
Dave Gilson isn't ruling out future deals, particularly if they meet his three-tiered prerequisites: local (less than two hours away), a commercial printer and the firm must provide a product or service that his company doesn't offer. But Gilson himself knows that it also takes initiative to get the ball rolling, because the opportunities aren't likely to land in one's lap.
"What I've learned about the acquisition process reminds me of high school dating," he says. "You have to be assertive, like asking the person to go to a dance, in order to get the conversation going and to let them know you're interested. People are not normally going to come to you directly. And, it's a long-term process; it takes time to establish a rapport, some trust and really determine the important aspects of the acquisition."
Naturally, the current buzz at Gilson Graphics surrounds the arrival of its J Press 720, which is housed in its own climate-controlled room. Through the installation and leading to the start-up, it was natural for spectators—sales, manufacturing, purchaser—to gather around, ask questions and just marvel at it, according to Oswald. "It provides employees incentive that if we're investing in technology, there's a great growth path for them," he observes.
On a more basic level, the $1.8 million investment in the J Press 720 gives Gilson Graphics increased job turnarounds due to the elimination of time-consuming platemaking/makeready processes, the ability to print on a larger sheet size and flexibility in terms of substrates (70-lb. text to 14-pt. coated and uncoated stocks). The Gilson Graphics brain trust has been monitoring inkjet technology for several years, and a number of factors came into play: proofing devices are inkjet, the need to control color and the gamut that can be produced. More and more, Palmitier notes, inkjet was becoming production viable from a standpoint of speed and color consistency.
"We came to the conclusion that inkjet is going to become a major player...and, over the long term, has the possibility to become the dominant player," Palmitier observes.
The speed to makeready was unprecedented, he adds. "It's really the first piece of equipment that can reach the high-end color gamut, use a larger size sheet, with no makeready and basically be immediately in production. It's going to allow us to provide better economics for our customers because we're going to be able to produce much shorter run, high-end color production than we were able to do before. It fits in great with customer requests for custom collateral pieces printed on-demand."
The 29.5x20.8˝ maximum sheet size is a major coup in regards to retail signage; it's not out of the ordinary for a client to order 500 different signs to go out to each of 900 retail locations. Also, the ability to run "multiple up" on a sheet also speaks to Gilson Graphics' variable data printing direct mail business. And, because the J Press 720 marries the front end of an offset press to an inkjet engine, the printer reaps the productivity benefits of a sheetfed press and the quick makeready, variable data printing advantages of a digital press on run lengths less than 3,000.
Oswald is quick to point out that the J Press 720 is also opening the door to generating products that previously were inefficient to print any way other than using offset technology, including short-run pocket folders, books and personalized cartons.
Palmitier believes that clients are fully in sync with what Gilson Graphics is hoping to accomplish with the new hardware. "Our customers are leading edge and bleeding edge within their own particular industries, so they look at Gilson and expect us to be the same with the products and services we're providing them," he says. "Our client base is very in-tune with new technology, so they're excited to be part of that process."
Going forward, Dave Gilson is hopeful that the new press will help justify the purchase of a sister model or a similar digital output device with a larger paper size (though he notes what a boon the J Press 720 is over the 12x18˝ size). Enhanced software to drive the digital gear is high on Gilson's shopping list and, in the long run, he would like to consolidate the two Grand Rapids facilities into a single operation.
Technology alone cannot drive a company, and Gilson is quick to laud the efforts of his dedicated staff, which has burgeoned with the addition of seven companies, yet has taken to integration well. Gilson loves that each addition has brought something new to the table, and that the overall organization has benefitted tremendously from the intellectual collateral gained.
"Two of the three key execs at Gilson Graphics—Jeff and Dave—came through acquisitions," he adds. "This demonstrates the importance of being open-minded and putting people in positions where they can succeed, recognizing their talents, and then getting out of the way and letting them do their jobs." PI