Is our Forecast for the Printing & Related Industries on Target? – December 2013 M&A Activity
Although there are many variations on the theme, I see three “forks in the road” as commercial printers head in one of these directions:
- Physical Services, combining mailing & fulfillment services;
- Mobile-Interactive / Digital Delivery of marketing messages;
- Upstream into Creative and Conceptual marketing services.
There were dozens of examples of the “MSP” movement; for example, Sandy Alexander, once known mostly for its high-end high-volume web press printing skills, has greatly diversified its service offerings. Shortly after announcing a management buyout in July, the company moved upstream and acquired a high-end retouching studio in New York City, adding to its other services which include wide format and digital printing capabilities.
Paper Industry Continues to Consolidate & Close Mills. As demand for printing declines, so must the demand for paper; the churn in the business of manufacturing and distributing paper will continue. Among the many deals over the past year, one that stood out was the disappearance of Boise as an independent company when it was acquired in September by Packaging Corp of America. The consolidation of paper distributors will also march on, with acquisitions increasing the vertical integration of the industry. Paper mills will close; International Paper announced the closure of its Courtland, Alabama mill. The mill was reportedly a victim of the ongoing transition from paper statements delivered via US Mail to e-statements delivered electronically via email and mobile devices.
Private Equity Invests in Labels and Packaging Companies. While shunning the commercial printing sector, PE funds will be active in all aspects of the packaging industry, including labels of all sorts, folding cartons, and supplies and equipment geared to packaging.
Irving Place Capital sold Multi Packaging Solutions to Madison Dearborn Partners in July, which then announced in September that the company agreed to a merger with Chesapeake Services Limited, backed by The Carlye Group. The merger of these two PE-backed companies formed a new global packaging powerhouse.