A New Player Enters the Consolidation Competition
PLYMOUTH, MN—Watt/Peterson, a sheetfed printer based here, will become the latest entrant in the competition to consolidate the graphic arts industry, if the plans set in motion recently proceed as anticipated. Revealing a "long-term strategy of creating a national provider of high-quality graphic arts services ranging from high-quality sheetfed printing to cost-effective web printing, binding and mailing services," the company, and neighboring rival Cimarron Printing, have merged to form a $32 million company under the banner of a new umbrella organization, Printing Partners of America.
"Increasing competition has generated a wave of consolidations within the printing industry, making it more difficult for mid-size operations to compete," notes Dennis Watt, CEO of the newly christened Watt/Peterson-Cimarron, explaining the thinking behind the strategy.
But Watt believes a fatal flaw has emerged in the business plans of many consolidators. "Many of the industry giants have pursued a consolidation strategy based on financial considerations alone: cutting costs, trimming staff and combining equipment and other assets. Not surprisingly, their customer service has suffered. Many of these publicly held printing firms now find that they're losing customers and trading at a discount to the S&P 500."
That won't be the case at Printing Partners of America, Watt says. "Unlike these other consolidations, the goal of our merger is to grow this business under the Printing Partners of America name by serving more customers, doing it better than the competition, and by having more services that meet our customers' needs."
Officials say that the merger will work because there is almost no overlap in the services the two companies provide.
"Watt/Peterson has been a national leader in high-quality sheetfed printing for many years," notes Dave Peterson, sales vice president of Watt/Peterson-Cimarron. "Cimarron has a similarly strong national reputation for web printing: cost-effective printing services for direct marketing campaigns, direct mailing services and spiral binding. Now, customers of both organizations can take advantage of the greatly expanded services."