POP! Retail Display Proves Attractive – January 2016 M&A Activity
In addition to the Verso bankruptcy, transactional activity in the paper segment remains brisk. In the past twelve months, the Target Report has noted the sale of six paper mills and the closure of three mills. In addition, we noted the merger that resulted in the large paperboard manufacturing and packaging printer WestRock (see The Target Report – Jan 2015).
Xerox announced that it will split into two separate publicly traded companies, essentially unwinding the strategy it embarked on when it acquired Affiliated Computer Services in 2010 - the goal was to sell Xerox’s corporate clients much more than document printing and processing. The business acquired in that deal will now be spun off into a new company focused on its original core of business process outsourcing and will have approximately $7 billion of revenue. The remaining, and larger segment, with about $11 billion in sales, will be the more familiar Xerox business focused on document technology and management. Although it has not been announced, we presume that this larger unit will retain the name and brand equity built into the Xerox name.
Not to be left behind by EFI and Epson, both of which recently acquired Italian textile printing companies (see The Target Report – July 2015), Mimaki acquired Italian La Meccanica Costruzione Tessili, a manufacturer of digital printing and other textile material handling machines. Ricoh also got into the textile mix, acquiring AnaJet, a manufacturer of direct-to-garment printers that enable personalized production of garments without the setup costs of screen printing and/or the extra steps required in the dye transfer process. The AnaJet machines have relied primarily on Ricoh printheads.
Acquisitions in the packaging segment continue to support the notion that the big players need to be adept at serving multi-national clients with production facilities in the major international markets. Amcor, based in Victoria, Australia, paid just over one times revenue to acquire Deluxe Packages located in California. Amcor also expanded its position in China in January, acquiring flexible packaging printer BPI China.