Isabelle Marcoux joined Montreal-based Transcontinental Inc. in 1998 and would quickly ascend to the position of vice president, corporate development, from where she has already been involved with more than 50 mergers and acquisitions. Marcoux is a potential heir apparent to take over control of the company, which has more than 14,000 employees in Canada, the United States and Mexico.

Transcontinental controls the seventh largest commercial printing operation in North America in addition to this country’s fourth-largest print media group. PrintAction spoke with Marcoux days after the company acquired a majority interest in digital signage company Enixa Media, as the company continues to grow under its Evolution 2010 plan.

Jon Robinson: Why did you leave your law practice to join the printing industry?

Isabelle Marcoux: I have a degree in
economics and law, but it was never my plan to be a lawyer for the rest of my life. I have always wanted to join the business and since Transcontinental is a family-run company, I have always wanted to continue – to the extent that I can – the work that Remi Marcoux, my father, started.

Transcontinental is a relatively young company. What was it like watching it grow?

My father was a very hard worker. We spent some weekends in the plant with him because that was the way we could see him. So we have been an integral part of the creation of Transcontinental and its evolution of where it is today.

What is your mandate?

I am responsible for corporate development. That means I head the strategic planning process, which is part of Evolution 2010. In past years, this has meant doing a complete portfolio review for each of our businesses to determine the areas of growth and focus for the next three years. So I am basically identifying the best opportunities and the best niches for our growth.

I also head the mergers-and-acquisitions team, which is an internal department. We are currently looking at opportunities in the book-printing sector of North America and direct marketing, as well as media in Canada.

What strategy did you bring to the Evolution 2010 plan?

My input was mostly identifying how to stay ahead of the curve because that is really what Evolution 2010 is all about. So for the printing sector we really translate that as offering value-added services both before and after the print function itself. We have and continue to invest in state-of-the-art printing technology but also in premedia technology to further build our digital platform. For the media sector, staying ahead of the curve really means expanding into digital platforms to leverage the content that we have from our newspapers and our magazines.

How has the M&A landscape changed over the past couple of years?

Print in Canada, as you know, is very consolidated among a few players and it is even consolidated at the North American level. I have been involved in M&A work for Transcontinental for the past year and there are fewer and fewer interesting opportunities.
On the media side, the industry remains fragmented between companies operating in newspapers, radio, TV and cable, basically. There are more buyers than sellers, and not too much in play right now in the Canadian media landscape. In addition, the income trust model means a company that would have been for sale in the past is now staying in the game, such as Osprey or CanWest that have both proceeded to income trusts.

What do you consider to be your greatest success at Transcontinental to date?

I joined in 1998 and I think my greatest accomplishment was being involved in over 50 acquisitions in the past eight years. Personally, I would rather talk about Transcontinental as a company. I think our greatest success was to maintain the values to which the company was founded during its expansion from 30 employees to 14,000 employees in the last 30 years, especially considering how much growth has come from acquisitions.

How can you better merge digital content with print content?

In fact, the newspaper world is changing at a rapid pace and we see opportunity, in terms of outsourcing, as newspaper publishers will focus on their core expertise of publishing, either on the digital platform or a paper product.

Are regional newspapers a better growth vehicle than larger papers?

We see local newspapers as not being as affected as city newspapers from the internet because the news is local. There are strong margins, good businesses and we do not see that going away in the near future. We have announced recently that we will put our classified ads on the net as well as in the newspapers. So we see local newspapers as good products and they also provide us a network for the distribution of flyers, which we otherwise print.

Why did Transcontinental purchase Enixa Media?

The company started as a flyer printer in 1976, so basically working in advertising with our retailers. Then in the 1980s, the media sector started business newspapers, magazines, community newspapers and now websites. In 2005, media was 25 percent of our revenues with the bulk of that coming from advertising. Advertisers wanted to reach their consumers through our magazines, community newspapers and websites.

Now we are adding another platform by which an advertiser can reach their consumers, namely those digital screens that are installed at food retailers – at present – in Quebec. Basically, we now have one more platform to offer to our advertisers and one more lure for new advertisers to take advantage of our service.

Does Transcontinental need to bring in more pieces to make Enixa work?

We did a complete due diligence on the technology that Enixa Media uses. It’s a simple technology, basically all the output is controlled from one location and sent via the internet to the screens. It’s a simple technology that is scalable. What we can bring to Enixa, and I think why it’s such a great fit, is our relationship with Quebec retailers and Canadian retailers that have already expressed an interest in looking at the model in the past week. We can open doors to Enixa to be present in other retail chains and we can leverage our newspaper and magazine relationships with advertisers.

How long before Enixa spreads beyond Montreal?

It has plans to roll out throughout Quebec in the near future and if it works out, we hope to roll it out in Canada. We doubt that the U.S. will come anytime soon because our focus is a network in Quebec and eventually in Canada.

If we look in the Quebec market, there are quite a few companies involved in digital screens. Some are in the metro system, Astral Media is at the airport, there are other companies in pharmaceutical chains. There are many small players, except for Astral obviously, so we see opportunity to consolidate that industry if all goes well.

What other acquisitions best reflect Transcontinental’s Evolution 2010 aims?

On the digital front, we tend to expand our media on multiple channels. We’ve announced the co-publishing opportunity that we’ve developed with AskMen.com where we are co-publishing its Canadian edition. We’ve also successfully concluded a joint venture with the Yellow Pages Group where we’ve published guides that are half magazine and half directory, which is a very new product on the market that hasn’t been done before.

We started with LesAffaires.com, our business newspaper website, video webcasting and we have the first webcasting studio in Montreal so we see opportunities in webcasting in the future.

Why is it important for a legacy printing company to play a part in New Media, or is Transcontinental unique in that vein?

First of all, I don’t think print is going anywhere anytime soon. We believe it is evolving. As such, we still have a strong commitment to print and we will continue to invest into print. Last year, we invested $130 million for state-of-the-art technologies that included special investments for three new presses. We still believe in print very much, so we’ll put money toward printing.

But printing is evolving into new platforms and we need to grow along with it otherwise the gap will be too far to reach if we don’t stay ahead of the curve. For us, it means being suppliers, but offering full-scale services and even integrating ourselves in the value-chains of our clients.

Is there point in time when your revenues from New Media will outweigh revenues from traditional media?

Right now, we have set a target for how much of our revenue will be derived from new media, from digital. We’re not there yet. It’s a long way to go, but we’re confident that we’ll reach that goal. I think we have the base of content to leverage that onto other platforms.