Turmoil in the Garden of Meredith - September 2015 M&A Activity
And here’s where it gets complicated – Media General has itself been the target of an unsolicited bid by Nexstar, a pure broadcasting company. As of the date of this writing, it’s unclear as to the outcome of these conflicting offers. Media General may be forced to sell itself to Nexstar, rather than be the acquirer. If that happens, it is déjà vu for Meredith, which only last year went to the deal altar and was spurned. In that aborted deal, its intended partner, Time Warner, walked away at the last minute and spun off its printed publications as a separate new entity (see The Target Report – June 2014). We’ll stay tuned to this ongoing story, but in any event it’s clear that the Meredith publications will soon be planting its printed publication roots in new ground.
As we projected at our presentation of the Economic Forecast at the Executive Outlook conference that opened Graph Expo 15 last month, transactions in the packaging segment continue at a steady pace. In our analysis of the overall packaging market we counted 33 transactions that were announced in the first seven months of 2015. Nine of these were acquisitions of companies that specialize in flexible packaging, and six were companies that print prime labels and are arguably technologically poised to also enter the market for flexible packaging.
Transcontinental, the large Canadian printing company that primarily prints publications, made its second move to enter the flexible packaging segment with its acquisition of Ultra Flex Packaging. Transcontinental paid $80 million in cash for the company which had revenues of $72 million, a reported 6.7 times EBITDA and 1.1 times revenues. If the sellers meet certain targets, they will realize additional compensation above the announced purchase price. (For more information about Transcontinental’s first foray into flexible packaging, also an acquisition of a US-based company, see The Target Report – March 2014.)