January 2007 Issue


’Tis the Season for Serious Dealmaking —Michelson

JUST WHEN you thought the landscape had stabilized following the 11th hour acquisition of Banta by RR Donnelley in October for $1.3 billion—thwarting a hostile takeover attempt by Cenveo kingpin Bob Burton to wrest control of Banta—a subsequent flurry of blockbuster M&A deals has sent shockwaves throughout the graphic arts industry. Who would have guessed that North America’s largest printer, RR Donnelley, would extend its reach even further by then swallowing up venerable entities Perry Judd’s for $176 million and Von Hoffmann for $412.5 million, both in all-cash transactions? Or that Cenveo’s Burton would remain undaunted about the big fish (Banta) that got away

ACROSS the nation

ALABAMA BIRMINGHAM—Telephone directory producer Stevens Graphics is expanding its press fleet with the addition of a double-circumference KBA Compacta 818 web press at its facility here. HUNTSVILLE—AdeptMedia Corp. has installed its first digital press, a Xerox iGen3 110 color digital production press. PELHAM—Dealer Independent Graphic Services has sold a Sakurai 574EPII sheetfed press to Sweet Pea Designs. ARKANSAS LITTLE ROCK—In its quest to continually enhance production capacity and print quality, Magna IV has installed its first convertible press. The 40˝ Mitsubishi Diamond 3000R is configured for four-over-four sheetfed printing with aqueous tower coaters before and after the sheet-reversing unit. CALIFORNIA GARDENA—A five-color, 40˝ MAN Roland 700 press with coater is

And the Award Goes to. . .—Sherburne

LAST MONTH, I suggested some ways that you can put public relations to work and get the word out about your business. This month, the topic is self-promotion—a subset of PR in which you can showcase the skills, expertise and capabilities of your organization. The two go hand in hand. In November, for the third year in a row, I had the pleasure of judging the DICE Awards. DICE, the Digital Imaging Customer Exchange (www.dicegroup.org, formerly the Indigo Customer Exchange), has been around for more than a decade and just reached the 300-member mark. The group has expanded beyond owners of Indigo presses

BINDERY matters

Americans Tour German Facilities Ludwigsburg, GERMANY—Customers from the U.S. recently visited the Postpress Inforum and various manufacturing sites of Heidelberg Postpress, as well as the Polar Mohr manufacturing location. The trip started at the Polar facility in Hofheim, where a demonstration of the PACE (Polar Automated Cutting Efficiency) system and Polar’s newly finished Logistics and Parts Center were the focal points. The group then proceeded to Ludwigsburg, the main manufacturing site for folders and mailer equipment. Stahlfolder demonstrated various extended folder applications, such as mailing and in-line punching/diecutting. A whole section of the Inforum was dedicated to automation in the bindery. A changeover demonstration on a

Bolger Vision Beyond Print — New Ways to Add Value

THE NAME pretty much says it all: Bolger Vision Beyond Print. Brothers dik and Charles “Charley” Bolger have situated their company to position printing as the centerpiece of a communications buffet—confident that customers will sample a little off of each plate before reaching the main course. “Printing needs to be like a Swiss train,” explains dik Bolger, who spearheads sales and marketing operations at Bolger Vision Beyond Print. “If you’re traveling in Switzerland and the schedule says the train will depart at 1:01 p.m., that train leaves promptly at 1:01 p.m. I want the client to know their printing will be of consistent

DIGITAL digest

PODi Forum To Explore Success Variables ANAHEIM, CA—Strategies for success in variable data marketing and case studies of companies that have put them into practice will be featured at the 2007 Application Forum organized by PODi, the Digital Printing Initiative. The event, scheduled to be held February 12-14 at the Hilton Anaheim, will feature several head-liners. With an analysis of the state of the industry as a lead-in, PODi President Rab Govil will explore key differences between a solution and a product. Attendees will learn how to choose which variable data marketing solution to offer and how to build it, along with gaining insights into the

Electronic Paper — Paper Route

THERE WAS a time not long ago (2005) when scarcely a week would go by without there being news of some new development in the growing “electronic paper” market. Perhaps “market” is the wrong word to use, as almost all the news that came out comprised solely of technology demonstrations, announcements of strategic partnerships, and prototype media and devices—none of which were available commercially. As a result, there was no real “market” to speak of. Still, the news was always exciting and sent the gadgets and gizmos crowd swooning with anticipation. And then, silence. What happened? It’s possible to interpret all

Hot Markets for 2007 — Prepare for Growth

DON’T BELIEVE the pundits. The U.S. economy will expand, not contract, in 2007-2008, and to an annual growth rate of nearly 4 percent in GDP. This will reverse the downward adjusted 3.2 percent in 2006 and 2005. Our industry should makeready to run forward at near the GDP rate. The reason: print growth is tied to the “knowledge economy,” which is not calculated into GDP while government, an outlay, is. Research and development, if treated as a capital investment rather than as an intermediate expense, boosts GDP by 3 percent and the national savings rate by more than 2 percent. The U.S. accounts

LETTERS to the editor

Lifetime Memories For Hall Of Famer Dear Editor: Thank you so much for the photographs from my recent induction into the Printing Impressions/RIT Printing Industry Hall of Fame. I really do appreciate the honor you bestowed on me. It is something I will cherish the rest of my life. Please thank everyone on your staff for making this a special evening. I hope that if you are ever in Dallas, you will let me show you our Texas hospitality. Jesse Williamson President Williamson Printing Dallas Award Brings Many Kind Words Dear Editor: It seems it was only yesterday that I was in Chicago at the Printing Impressions/RIT Printing Industry Hall

MAN Execs Assess State of Industry

CHICAGO—With a fresh snowfall on the ground, the Windy City provided a fitting seasonal backdrop for MAN Roland’s annual Editor’s Dinner. This time, the educational event and end-of-year celebration also served as a toast to Yves Rogivue, the press manufacturer’s then outgoing CEO, and Vince Lapinski, who took over the reins effective January 1. In his parting remarks Rogivue, who has since returned home to work for Muller Martini in Switzerland, challenged industry companies to make some noise and shake things up with new technology. “CIM (computer-integrated manufacturing) is the cornerstone upon which the future of this industry will be built,” Rogivue said. “Implementing CIM

Old Friends, Days Treasured —Cagle

THERE IS something sad about the end of the year, a feeling of loss, even when it’s just night turning into day. Like chapters in a book, the year tells part of our entire life story, and I’m sure many of us are guilty of turning the page without giving it much thought at all. But, as Barry Manilow used to sing on Dick Clark’s New Year’s Rockin’ Eve, “Don’t look so sad, it’s not so bad, you know. It’s just another night, that’s all it is.” In those 365 days of 2006, a boatload of commercial printing companies changed hands. Thousands

Paper Outlook — Declaring War on Dumping

BY ALL indications, the paper manufacturing sector is doing everything within its means to ensure that capacity walks hand-in-hand with demand. Whether these measures will have an impact on what is largely perceived as a weak North American paper market through the front half of 2007 remains to be seen. Some big names were on the move in the back half of 2006 on the coated freesheet side. International Paper sold its coated and super- calendered (SC) papers business to CMP Holdings, a subsidiary of Verso Paper Holdings, for roughly $1.4 billion. But perhaps the biggest news came from Weyerhaeuser, which combined its fine

Perelman Buying John Harland Co.

ATLANTA—Check printing specialist John H. Harland Co. has agreed to be acquired by M&F Worldwide, the holding company controlled by billionaire Ron Perelman, for $1.7 billion, or $52.75 per share. Harland will become a wholly owned subsidiary of M&F Worldwide upon completion of the deal, which is expected in the second half of 2007. The deal also needs to be approved by Harland shareholders. M&F Worldwide is the parent company of Clarke American, another major player in the check printing space. Between the two, M&F Worldwide will boast a majority of the check printing business. “This makes a lot of sense for someone who wants to milk

Postal Issues — Rate Case Pushes Forward

THE GOOD news, bad news scenario has struck the commercial printing industry, as well as the mailing community. The first bit of news should help serve as some consolation to the latter. Unless you’ve spent the last month on holiday in Copenhagen, you’re well aware that the Postal Accountability and Enhancement Act was miraculously salvaged by Congress in the closing minutes of the 109th session, a.k.a the lame duck, (see story on page 5). On December 20, H.R. 6407 was pushed through by President Bush, giving the green light to legislation aimed at modernizing the United States Postal Service’s (USPS) business practices. The

Postal Reform Pulled From Fire

WASHINGTON, DC—Faced with leaving the U.S. Postal Service in a “death spiral” of increasing rates and declining volume, Congress threw Mr. ZIP and the mailing community a lifeline with the passage of the Postal Accountability and Enhancement Act. In the waning hours of the lame duck session, Congress passed H.R. 6407, much to the surprise and delight of those who profit through mailed communications, including commercial printers. The legislation, a dozen years in the making, goes a long way toward overhauling an institution that had been operating with business procedures established in 1970, long before alternative means of communication, particularly the Internet, became a viable

Printer Blamed for Breach of Data

CHICAGO—The city school system here and a suburban commercial printer are being sued by a former teacher over the inadvertent release of personal information through a mailing, which included names, addresses and social security numbers. Mark Cohen filed suit with the Circuit Court, according to the Associated Press, claiming the mistake involved personal information of more than 1,700 former Chicago public school employees, which could be leveraged by identity thieves. All Printing & Graphics was contracted by the school system to print and mail a packet of health insurance information to former employees, according to the AP. The printer allegedly mailed a spreadsheet of


Printers Weigh Straight Presses vs. Long Perfectors KENNESAW, GA—More than 50 printers from around the U.S. attended a Heidelberg VIP Event December 5-6 at its Print Media Demonstration Center to see live demos comparing high-speed straight printing vs. long perfecting sheetfed offset presses. The event served as a follow-up to a panel discussion on the topic hosted by Heidelberg during Graph Expo. Following a brief presentation explaining how the job was prepared using Heidelberg’s JDF-based Prinect Printready System 3.0, the same job was run in the demo center on a six-color Speed- master XL 105 with coater in two passes and on a 10-color Speedmaster

RR Donnelley Caps Transactional Trilogy

CHICAGO—While it may not have Boardwalk and Park Place, RR Donnelley certainly seems to be building upon its own printing monopoly. After reaching terms last Halloween to buy Banta, the largest printer in North America resumed its holiday shopping a few days before Christmas by signing an agreement to acquire Perry Judd’s, of Waterloo, WI, for $176 million. Donnelley then rang in the new year by plunking down $412.5 million in cash to Visant Corp. for book printer Von Hoffmann. The all-cash acquisition of Von Hoffmann is expected to be completed by the end of the first quarter. Von Hoffmann specializes in books for

Standards — A Strategic Business Issue

Are you overlooking a strategic business issue? You may be, if you are not involved in the development of standards that may impact your business. Because technical participation in standards development generally yields direct and measurable progress that can be tied to a company’s “bottom line” financials, such participation is easily justified. A study conducted in Europe in 1997- 2000 showed that industrywide standards not only have a positive effect on the economy as a whole, but also provide benefits for individual businesses that use them as strategic market instruments. In today’s market, a company cannot wait until a standard has been published to begin to

Stora Faces Price Fixing Charge

HARTFORD, CT—Stora Enso North America has been indicted by a federal grand jury here for allegedly participating in a price-fixing conspiracy to drive up the cost of paper used for magazines and catalogs. According to the Associated Press, the Wisconsin Rapids, WI-based manufacturer is accused of conspiring to inflate prices between August 2002 and June 2003. The indictment claims Stora Enso agreed to the plan in a meeting with an unidentified competitor. In a release from its global headquarters in Helsinki, parent company Stora Enso Oyj denied any wrongdoing and said it would enter a plea of not guilty at the arraignment. The company


Ryobi Plans Third Press Manufacturing Facility HIROSHIMA, JAPAN—Driven by strong U.S. and worldwide demand for mid-size offset printing presses, Ryobi Graphic Systems began construction on a new press manufacturing facility this month. The new facility will be the third at Ryobi’s Hiroshima East central production center. Ryobi officials said the newest facility, Hiroshima East Plant 3, will be at full-scale operations in September 2007. It will add another 99,000 square feet of manufacturing space and represents a total expected investment of $27 million. When the third facility is completed, Ryobi will have 314,000 square feet at its Hiroshima East operations, more than double

Tuning-Up Performance — Fiorenza

CHANCES ARE, you have played out this scene before, in one of the roles. It’s time for the annual performance evaluation—an event despised by all, except possibly human resource managers, consultants and employment lawyers. The manager and her employee (or maybe “associate” or “team member”) gather uncomfortably around a table. The manager stumbles upon what seems like the perfect ice-breaker: “I can tell that you don’t want to be here any more than I do—I can’t believe they make us do this.” The scene illustrates the most common issue our firm sees sabotaging performance evaluation systems of all types—management’s lack of belief

Undaunted Cenveo Lands Cadmus

STAMFORD, CT—It was almost too easy. After a trio of proxy and near-proxy battles over the past two years, Bob Burton found himself peacefully negotiating around the holiday season. The result for the chairman and CEO of Cenveo was a negotiated agreement to purchase Cadmus Communications, of Richmond, VA, for $24.75 per share, or $430 million. The transaction has been approved by the boards of directors for both companies and, pending approval of Cadmus’ shareholders, is expected to close in the first quarter. The deal effectively makes Cenveo the third-largest printer in North America, behind RR Donnelley and Quebecor World. “Cadmus’ operations are a perfect complement


Valassis, ADVO Settle, Merge LIVONIA, MI—After several months of acrimony, Valassis and ADVO have decided to patch their differences and merge. The sides have dropped their chancery court case and will move under one roof via a renegotiated $1.2 billion deal, at $33 per share for the outstanding common shares of ADVO stock. The deal is expected to close in the first quarter of 2007. Bowne Buys St Ives Financial NEW YORK—Bowne & Co. is acquiring St Ives Financial, the financial printing division of St Ives plc. Terms of the deal were not revealed. St Ives, which is keeping its annual report printing business, has financial printing

USPS: Victory A Long Time Coming

The Printing Industries of America (PIA) hailed passage of H.R. 6407, the Postal Accountability and Enhancement Act of 2006, approved by both the U.S. House of Representatives and the U.S. Senate in the final hours before both chambers adjourned the 109th Congress on December 9, 2006. Passage of comprehensive postal reform legislation was PIA’s number one legislative goal this Congress. PIA is a co-founder of the Coalition for a 21st Century Postal Service, a bipartisan coalition of business, industry and labor groups that led the fight for updating our nation’s postal laws. The printing industry owes a huge thank you to the Senate and House