Year in Review--A Torrent of M&A
BY CHRISTOPHER CORNELL
Each little drop in the bucket doesn't amount to much, but after a while it can turn into a torrent; that's the metaphor that applies to the graphic arts industry in 1999. Each individual merger and acquisition during the course of the year didn't affect the industry that much, but, in the aggregate, 1999 will likely be remembered as the year in which the number of companies in it noticeably shrunk.
The biggest news story of the year was one just about everybody saw coming. Just after mid-year, following weeks of industry speculation, Quebecor Printing and World Color Press signed a deal in which Quebecor acquired all stock in the US$2.7 billion industry giant based in Greenwich, CT.
The acquisition was the largest in the history of the printing industry, and the newly combined company, Quebecor World, is now the largest commercial printer in the world.
And what Quebecor bought was a company that was considerably larger than it had been a year earlier. Before its acquisition, World Color had been one of the industry's most active consolidators. Among the companies it had acquired earlier in the year were: Providence, RI-based UP/Graphics; Erlanger, KY-based Metroweb Corp.; Great Western Publishing in Phoenix; Waukee, IA-based Downey Printing Group; and Enfield, CT-based Infiniti Graphics.
But there were so many other deals. Another major gulp was heard when New York-based Applied Graphics Technologies (AGT), having outbid Schawk Inc., acquired London-based prepress provider Wace Group plc.
While Lisle, IL-based Wallace Computer Services spent most of 1999 trying to smooth out its operations (following its 1998 acquisition of Graphic Industries) it took time out to sell two of its operations: Memphis, TN-based Mercury Printing (to Consolidated Graphics) and its $40 million contract stationery business (to Boise Cascade Office Products). But in the third quarter, Wallace returned to its acquisition course, acquiring San Diego-based Commercial Press.