Acquisitions Resume, Cautiously
ROSELLE, NJ—While it's nothing like the mad rush of M&A activity the industry saw two years ago, there has been a cautious spate of mergers and acquisitions in the graphic arts sector in recent weeks.
Perhaps the most unusual announcement came from Bellevue, WA, where business-to-business Internet company ImageX.com acquired Howard Press, a $30 million privately-held printing company based here, for $1.4 million in restricted stock and $12.6 million in cash, plus $5 million in debt refinancing. This is the fifth acquisition by ImageX in the last 15 months, and a rare example of a "dotcom" company buying a "bricks-and-mortar" operation.
Howard Press becomes a wholly owned subsidiary of ImageX.com and will continue to operate from its current headquarters. Howard Press President and CEO Scott Porter becomes COO of the new subsidiary, and 15 of Howard's salespeople will become part of the ImageX.com team.
Rich Begert, president and CEO of ImageX.com, says the Howard Press acquisition, like the previous acquisitions of Fine Arts Graphics and Image Press, was made to gain access to Howard's customer base, and that the decision was less about printing capabilities. "These customers chose Howard Press for the quality of their production, but now they'll have the added opportunity to move their vendor relationship online."
Englewood, CO-based Mail-Well also made a quiet acquisition recently, purchasing Trumble, CT-based Craftsmen Litho, in what officials say is one of the largest transactions in the Connecticut printing industry in recent years. Consulting firm Rampart Financial Group represented Craftsmen Litho in the deal.
Howard Drubner, former owner of Craftsmen Litho, says "Mail-Well offers the right foundation for the business going forward." Drubner will remain as president of Craftsmen Litho.
Craftsmen Litho, established in 1949, employs a staff of 90 at a facility featuring both web and sheetfed presses.
"I think this signifies that, despite the current slowdown in acquisition activity, large companies will still pay a premium price for very attractive companies like this," notes John Hyde, managing partner at Rampart.