POP! Retail Display Proves Attractive – January 2016 M&A Activity
Point-of-purchase printing companies have been in demand over the past year and the target of some very well-heeled and selective acquirers. These specialized printing companies understand and implement the complex requirements beyond just the printing, often starting with the physical and graphic design. After presswork is complete, these companies mount, diecut, assemble and distribute the store-ready kits.
Including Imagine! Print Solutions, we count ten acquisition in the past twelve months in which the acquired company had deep expertise in the POP segment. In December 2015, WestRock acquired Cenveo Packaging with six production facilities including Cenveo’s litho-laminated merchandizing display business, in addition to folding cartons. California-based Dome Printing purchased two companies, Bel Aire Displays and Color Solutions. Both transactions are moves for Dome into the retail display space (see The Target Report – Oct 2015). Menasha Corporation, the country’s third oldest continuously operated privately owned company, with sales in excess of $1.5 billion, has appeared on our deal log four times in the past two years, each time as the buyer of a company with strong point-of purchase expertise.
Verso Corp., producer of printing papers, backed by Apollo Global Management, filed for Chapter 11 bankruptcy in January. According to company management, the plan is to continue operations, shed debt with the end result that senior debtholders gain equity in the reorganized company. Although management blamed a “confluence of external factors, including an accelerated and unprecedented decline in demand for [its] products,” the bankruptcy comes as no surprise; the bankruptcy filing has been widely expected since Verso acquired competitor NewPage Holdings in January 2015 after a year of protracted disputes about the efficacy of the merger (see The Target Report – Jan 2014).
The acquired company, NewPage, had itself filed Chapter 11 in 2011, and in the process shed about $2.7 billion in debt obligations. In the current bankruptcy proceeding, Verso plans to eliminate another $2.4 billion through the restructuring process.