Transition to Digital Printing Roils the Book Industry
The following are deals, court filings and closures in the printing, packaging, paper and related industries for the month of July:
Transactions in the book printing industry took center stage in July; the headline act was the Chapter 11 bankruptcy filing of Cengage Learning. The company is now moving rapidly to a digital strategy, as it seeks to shed more than $4 billion in debt through the bankruptcy process. CEO Michael Hansen, as reported by Bloomberg, squarely placed the blame on the company itself for not adopting digital quickly enough, due to the “belief that the print model would hold up better than it actually did.”
Private equity firm Castle Harlan increased its position in the book printing industry with its investment in Bookmasters, which has expertise in digital book printing. The deal was announced as a strategic partnership between Bookmasters and Castle Harlan’s existing portfolio company, Baker & Taylor, the world’s largest distributor of books and related materials. The two companies will continue to operate independent of each other.
Edward Brothers Malloy, formed in February 2012 with the merger of two book manufacturing companies, announced the closure of one of its two printing facilities in Ann Arbor, MI. John Edwards, CEO of the company, attributed the closure to a significant decline in the demand for longer runs which utilized the offset printing process. He also noted that the closure is consistent with the company’s strategic effort to grow its digital book printing business. The company is capable of the “distribute-then-print” model of content delivery, using its several remote digital printing facilities in the United States, as well as its one facility in the United Kingdom.
Bucking the trend toward digital book printing, Publisher’s Graphics, an innovator in internet-based ordering and online sales of digitally printed books, acquired Corley Printing, a traditional offset book printer with capability to produce longer runs printed on offset presses.
Mark Hahn is a managing director and founder of Graphic Arts Advisors, a boutique strategic financial advisory and consulting firm focused exclusively on the printing, packaging, mailing, marketing services, brand management, and related graphic communications industries. With more than 35 years of graphic communications experience in the areas of finance, operations, sales, M&A, and general management, Hahn has served as chief financial officer, chief operating officer and other senior positions with several commercial printing companies, as well as founding and eventually selling his own printing company.
The firm assists company owners and management, as well as their lenders, investors and shareholders in the following areas: mergers and acquisitions, sale of business, strategic and financial advisory, capital structure and funding, financial analysis, interim and turnaround C-level management, business valuations and serving as consulting experts. Hahn is the author of The Target Report and is regularly published and quoted in printing industry trade and management journals.
Mark Hahn can be reached at (973) 588-7399 or email@example.com