Mack Attack! Cadmus, the Conqueror
PI: Cadmus recently engaged in transactions that mark a new milestone in the company’s strategy to create leading businesses in select, niche markets. Your company sold its financial and custom publishing divisions and purchased The Mack Printing Group. It seems as though Cadmus is narrowing its focus and concentrating on select, core markets. What’s the game plan for Cadmus?
Gillispie: Cadmus is following a systematic process to develop leading positions in markets where we can expect profitable growth. We have developed very specific criteria about the nature of the markets that we think will offer the best and most profitable growth.
Foremost among these is the ability to possess a leading position. Other important criteria include markets that are showing real growth; markets where there is an absence of organized or intense competition; and, most important, markets where we think we can perform well and add value.
Currently, the journal market meets many of these criteria. We have a leading position, and the exploding growth of knowledge is producing modest, but very attractive, real growth in this sector. The Mack purchase not only solidifies our position as the world’s largest producer of scientific, technical and medical journals, it also increases our revenues by 40 percent and strengthens Cadmus by adding a business with a solid track record of consistent growth, double-digit operating margins and strong cash flows.
Similarly in our marketing businesses, while the Internet will bring great changes in marketing, retailing and distribution, products are going to be packaged. So, our short-to-medium run packaging business should be well-placed to grow robustly. We also think marketers are going to gain an increasing appreciation for the power of point-of-sale marketing and advertising. As one of the larger providers in this market and possessing well over 15 years of experience in this area, our point-of-purchase business is well-placed to grow with this trend.