CGX + CVO = OMG!
So I'm out of the office a few days at the National Postal Forum in Nashville, TN—where, hand to God, I saw Chet Atkins' gun collection—and an old amigo sends me this e-mail gem:
"I heard today from a very good source that discussions between Cenveo and Consolidated Graphics broke down in the last few days. I was told that Cenveo was to be the survivor if the transaction was consummated. I have not learned the reason why the discussions stopped."
Amazing. Can you picture the two printing industry war horses, Joe Davis of CGX and Cenveo's Bob Burton, pulling on cigars at a big conference table as they bounce figures off one another? Burton barks out, "Look Joe, I can go to $850 million, but I don't see any wiggle room beyond that." Davis, without batting an eyelash, utters in that deep drawl, "No can do, Bobby."
Of course, this is more colorful than the truth. The reality is it's a bunch of lawyers sitting in conference, discussing non-disclosure agreements and other formalities, as opposed to two tough hombres doing some horse trading over whiskey.
CGX's Jim Cohen, the vice president of mergers and acquisitions, said the company cannot comment on deals it may or may not be evaluating. Robbie Burton, Bob's son and Jim's counterpart, gave a similar reply. We're obligated to follow the leads, whether they're accurate or unfounded, and the parties involved can't and won't say a word.
This is another case where we would be shocked, but not surprised, at the magnitude of the deal and the players involved (though even the rumor mill isn't predicting a hand shake in this scenario). It would further support the industry-wide impression that volume levels overall are continuing to dwindle, prompting reconciliation of capacity with demand. Shedding capacity, in the long run, is good for the health of the industry.
Fortunately, a lot of people I've spoken with in the last few months have witnessed a dramatic spike in business. Still, the next six months are hyper critical for the industry. We need the economic recovery to whet the collective printing beaks, and not experience any more of this "new normal" crap.
There are a lot of good people out there who are still hurting, and confidence needs to be restored throughout the industry. In this vein, we must embrace this M&A era and appreciate that while many good people will lose their jobs because of it, in the long run we will all be better off.
Just stay away from Mr. Atkins' gun cabinet.