Mergers & Acquisitions

Konica Minolta Inc. of Tokyo announced today that it has purchased a minority stake in MGI Digital Graphic Technology of Paris, which develops toner-based printing presses and associated coating systems.

The minority stakes translates as Konica Minolta taking a 10 percent interest of MGI, valued at €13.7 million ($20.4 million). This strategic alliance between the two companies is to focus on “accelerating the innovation and commercialization of next generation digital printing solutions.” The companies will co-develop and co-market both existing and future products employed within the printing industry.


“We are very happy and proud that Konica Minolta recognizes our accomplishments and our unique capacity to innovate,” stated Edmond Abergel, CEO and Chairman of MGI. “This strategic alliance will be the basis for the development of tomorrow’s innovative digital solutions for the graphic art industry and printed electronic 3D.”

MGI notes the investment will also allow the company to become more of a global player with the added weight of Konica Minolta, one of the world’s largest imaging-sciences companies.

EFI of Femont, California, has acquired SmartLinc Inc. of Milwaukee, Wisconsin, which develops shipping software that can ultimately be tightly integrated into EFI’s large portfolio of Management Information Systems. Financial terms of the acquisition were not disclosed.



SmartLinc’s software is designed to optimize the shipping process by allowing users to select the best carrier available for a shipment. EFI explains print MIS/ERP products can automatically submit print jobs to SmartLinc software, which then tracks shipment status, cost and carrier information, and transfers this information back to the MIS/ERP system for metrics.
           
SmartLinc employees, including former SmartLinc co-owners Greg Billinghurst and Scott Kwiatkowski, have joined EFI.
 
“EFI and SmartLinc have many joint customers who will benefit from further, streamlined integration between their MIS/ERP and shipping systems,” stated Marc Olin, EFI’s Chief Operating Officer. “Acquiring SmartLinc also presents opportunities for EFI to approach promising, adjacent markets.”
 
EFI states it will continue to develop and sell SmartLinc software, which will become the company’s core shipping technology offering. Currently, the software serves as the integrated shipping module for EFI’s Pace, Monarch and Radius MIS/ERP products. Over time, EFI will also create a new, SmartLinc-based shipping module for EFI PrintSmith Vision business management software.
 
“EFI is the undisputed leader in printing workflow, and the products and service EFI offers reflect its passion for customer success,” stated Robert Silberman, former President of SmartLinc.

RockTenn moves deeper into retail display with the purchase of NPG Inc., an independent merchandising displays company with around 400 employees across two facilities, one each in Chattanooga, Tennessee, and Las Vegas.

In Canada, RockTenn operates 17 facilities of various size and structure, from prepress shops and assembly locations to full-scale production plants. The company has a Canadian presence in Richmond (BC), Calgary, Regina, Winnipeg, Guelph, Milton, Mississauga (2), Etobicoke, Markham, Toronto, Montreal, Mount Royal, Point Aux Trembles, Saint-Marie, Warwick and La Tuque.

NPG, which provides a range of display products and services to many of the world’s most-prominent retail brands, will now operate as RockTenn Retail Solutions. Phil Harris, formerly CEO of NPG, has been named VP and GM of RockTenn Retail Solutions and will continue to manage the operation along with his current leadership team.


“NPG’s focus on retailers, their innovative retail solutions and large-format printing capability expands our customer base and significantly improves RockTenn’s ability to provide retail insights, innovation and connectivity to all of our customers,” stated Craig Gunckel, Executive VP of RockTenn and GM of RockTenn Merchandising Displays.

RockTenn, with around 26,000 employees, is one of North America's largest integrated manufacturers of corrugated and consumer packaging. In addition to Canada and the United States, the company operates locations in Mexico, Chile, Argentina and China.

 

Simpson Screen Print & Lithography of Bloomingdale, Ontario, began 2014 with its January 1 purchase of Denison Print, which, established 27 years ago, is also a well-known printing operation in the Kitchener/Waterloo region.



The two printing companies have crossed business paths before. When Simpson moved its operation to Bloomingdale in 1994, Denison purchased the Simpson facility in nearby Breslau and has been there since. Denison Print began in 1987 as a small, offset print shop. The operations of Denison Print are to be consolidated at Simpson’s 70,000-square-foot plant on Sawmill Creek Road, located northeast of Kitchener.

“Simpson has great strengths in printing technology… Denison has great strengths in marketing,” stated Martin Johanns, owner of Simpson Print. “Bringing the two together opens up new opportunities for both companies while building on our reputation for excellence among our existing customers.”


Simpson Print was established in 1964. Johanns bought the business in 1987, shortly after selling Johanns Graphics of Waterloo. which he began in 1968. Today, Simpson Print employs over 60 people working within screen, UV offset and digital printing processes. Simpson Print won three awards in PrintAction’s most-recent Canadian Printing Awards program, including Gold in the Display Graphics category.


“It is a great fit,’’ said Tony Denison, owner of Denison Print. “I have always been customer-focused and this will allow me to give my full attention to helping my clients with their marketing, design and print projects.”

Simpson Print was the subject of PrintAction magazine’s April 2013 cover story, written by Victoria Gaitskell. Read Gaitskell’s April 2013 cover article

Verso Paper Corporation of Memphis entered an agreement to acquire NewPage Holdings Inc. in a transaction valued at US$1.4 billion. The transaction has been unanimously approved by the boards of directors of both companies and is expected to close in the second half of 2014.

Verso is one of North America’s largest producers of coated papers, while NewPage Holdings, which filed for filed for Chapter 11 bankruptcy protection back in September 2011, is described as a primary producer of printing and specialty papers. Upon closing of the transaction, the combined company will have sales of approximately US$4.5 billion and 11 manufacturing facilities located in six American states.

“The combination of Verso and NewPage will create a stronger business that is better positioned to serve our customers and compete in a competitive global marketplace,” stated David Paterson, Verso’s President and CEO, who is to lead the combined organization. “We continue to face increased competition from electronic substitution for print and international producers, but as a larger, more efficient organization with a sustainable capital structure, we will be better positioned to compete effectively and deliver solid results despite the industry's continuing challenges.”


Under the terms of the transaction, NewPage’s equity holders will receive total cash and debt consideration of US$900 million, consisting of US$250 million in cash. NewPage's equity holders also will receive shares of Verso common stock representing 20 percent (subject to potential adjustment up to 25 percent under certain circumstances) of the outstanding shares as of immediately prior to closing.

Verso plans to complete the acquisition through US$750 million in committed financing, which will be used to pay the cash portion of the merger consideration and to refinance NewPage’s existing US$500 million term loan prior to closing. The US$1.4 billion transaction is composed of the cash consideration, the US$650 million of new Verso first lien notes, Verso common stock and the refinancing of NewPage’s US$500 million term loan.

“We believe this agreement with Verso represents the best way forward for our stakeholders,” stated George Martin, President and CEO of NewPage. “A combined Verso and NewPage will be able to achieve greater efficiencies, which will enable it to serve clients with a high level of product quality and innovation.”

Cober Evolving Solutions of Kitchener, Ontario, adds to its namesake with the purchase of CuteGecko Inc., a design agency based in the same city.

CuteGecko was founded in 2009 by Karl and Amy Allen-Muncey with a primary focus on digital design and online marketing. Cober Evolving Solutions, founded in 1916, is recognized as one of Canada’s leading operations in leveraging both print and online production.



“We are thrilled to welcome the skills and talents of Karl, Amy and the CuteGecko team,” stated Todd Cober, VP of Cober Evolving Solutions. “They are out-of-the-box thinkers, just like us, and have built quite a strong reputation for innovative social media, design and marketing solutions – a wonderful addition to the expanded services we now offer. We are also excited to grow our digital solutions and design team within the Tannery Building.”

CuteGecko is housed on the third floor of Kitchener’s 340,000-square-foot Tannery Building. Once the industrial engine for the region, the Tannery District has remodeled itself as a hub of digital and marketing innovation, much like Toronto’s Liberty Village development centred around the gentrification of the Carpet Factory. 



Cober operates out of an 86,000-square-foot facility, employing over 100 people, with eight litho presses, four digital presses, wide-format systems, full bindery and mailing, and warehousing, along with a raft of online products, including existing in-house design.


“We are extremely excited to apply our values, experience and skills to such a visionary company,” reads a joint statement from Karl and Amy Allen-Muncey about the acquisition. “Cober has taken the lead on becoming an innovative, one-stop-shop for creative, design, digital and print solutions. With Cober’s incredible resources at hand, this new venture gives our team the ability to flourish and grow.”

Harland Clarke Holdings Corp., a provider of payment and marketing services, moved to acquire Valassis, which also provides a variety of channel marketing, for approximately US$1.84 billion.


Under the terms of the agreement, Harland Clarke Holdings, a wholly owned subsidiary of MacAndrews & Forbes Holdings Inc., will acquire all of the outstanding shares of Valassis for $34.04 per share in cash, representing a transaction value of approximately $1.84 billion. The transaction has been unanimously approved by both the Valassis and Harland Clarke Holdings Boards of Directors and remains subject to normal approvals.

The combination of Harland Clarke Holdings and Valassis will create a company with approximately US$3.3 billion in combined revenues, generated from some of the largest financial, consumer products and retail institutions worldwide. MacAndrews & Forbes, a holding company with interests in public and private companies, is wholly owned by Chairman and CEO, Ronald Perelman.

“The acquisition of Valassis is transformational for Harland Clarke Holdings, enabling us to further diversify our portfolio and expand our client base of more than 15,000 client accounts,” stated Chuck Dawson, CEO of Harland Clarke. “We respect Valassis’ proven ability to effectively and intelligently deliver media campaigns for our country’s largest advertisers and marketers. This is a strong complement to Harland Clarke Holdings’ capabilities in managing customer relationships for the world’s largest financial institutions, the most respected big-box retailers, as well as educational and governmental organizations worldwide.”



Harland Clarke Holdings will finance the acquisition with cash on hand and new borrowings and has received committed financing from Credit Suisse, BofA Merrill Lynch and Citigroup Global Markets Inc. to complete the transaction. 


“Under Harland Clarke Holdings, we expect to create a company that is stronger than our individual businesses,” stated Rob Mason, President and CEO of Valassis, “which will allow us to pursue our vision of intelligent media delivery while continuing to strengthen our company’s award-winning culture.”

TC Media, a division of TC Transcontinental, reached a $75 million agreement to purchase 74 Quebec-based community newspapers and associated online properties owned by Sun Media, a subsidiary of Quebecor Media.



The agreement has been approved by the boards of both companies, but is still subject to regulatory approval.


“Acquiring Sun Media’s 74 community papers in Quebec is in line with our strategy to strengthen the core assets of TC Media and develop a local digital media offering for businesses and communities,” stated Francois Olivier, President and CEO of TC Transcontinental. “This transaction will add approximately $20 million to TC Transcontinental's operating income before amortization.”


As part of this transaction, TC Transcontinental also signed a parallel agreement with Quebecor Media to print some of its magazines and direct-marketing materials. TC Transcontinental Printing will start printing Quebecor Media products on or about February 1, 2014.

“Today’s announcement by TC Transcontinental and Quebecor Media is a historic one," continued Olivier. "On the one hand it shows the relevance of our state-of-the-art printing platform and our ability to help publishers and marketers, and on the other it demonstrates our ability to change in keeping with the new realities of the local media market."

 

Olivier also pointed to TC Transcontinental’s growing focus on building multiplatform offerings across all of Quebec. Together, the TC Media and TC Transcontinental Printing operations have more than 9,000 employees in Canada and the United States, generating revenues of $2.1 billion in 2013.


“The digital revolution has completely transformed the local print media market in recent years. Clients can now place their ads on a multitude of platforms that did not exist just over a decade ago,” stated Robert Depatie, President and CEO of Quebecor Media, parent company of Sun Media. “We are delighted that with this transaction we are ensuring Quebec ownership of these papers for the future by selling them to another major Quebec company, TC Media.”



United Precision Cutting Technologies of the Greater Toronto Area continues its expansion with the purchase of Wades Bindery Repair Service Ltd. based in Cambridge, Ontario.

Wades Bindery Repair Service has specialized in sales and service of finishing equipment since Wade and Mary Sears founded the company in 1986. Brothers Wade and Dwane Sears are to continue on with United Precision in key roles, providing years of finishing expertise in the Canadian printing industry.



“Wade is Grandpa Baum,” says Mitch Rich, President of Duracut Machine Knife Company Ltd. and majority owner of United Precision, “A true and true folder guy who will pass his knowledge on to us, as well as doing what he loves best and that is seeing his customers.”

Rich founded Duracut Machine Knife Company Ltd. in 1997 at age 27. In late-2010, in an effort to thwart economic upheaval hitting North American manufacturing, he began to merge Duracut with three other companies, first bringing in United Press & Bindery, followed by Precision Systems and then Graphic Equipment and Machinery in 2012.

Rich holds majority ownership in the combined companies, now operating as United Precision. He then started up a fifth business arm, called Master Machinery Movers Inc., to end the high costs of outsourcing tricky rigging and transportation of heavy equipment.

United Precision, because of its diverse service offerings and specialized machine shop (developed by Duracut), sits in a unique position in Greater Toronto’s large manufacturing sector. Rich says the overall company has tripled in growth since 2008. The purchase of Wades Bindery adds to United Precision’s portfolio, as Rich explains, “This gives us a full rounded service in print finishing equipment.”


Toronto-based CCL industries has just reported its financial results for the third quarter 2013 which saw it grow its sales 91.6 percent to a record $606.6 million. The majority of this growth is attributed to its acquisitions of Avery Dennison Labels and INT Autotechnik.

Operating income for the quarter was $67.8 million, an improvement of 72.5 percent compared to $39.3 million for the same period in 2012.

"We are very pleased with the performance of our newly acquired businesses, which contributed significantly to our twelfth consecutive period of year-over-year improvement in quarterly adjusted earnings per share; a record for the Company," said Geoffrey T. Martin, President and Chief Executive Officer. "CCL Label legacy operations also delivered five percent organic sales growth."

Martin went on to say that the CCL Container division posted a small drop in sales and profitability due to a slow sun care season in the U.S. and a loss in the Canadian operations. The North American label operations in general were down “single-digits” when compared to a strong quarter in 2012 while Latin America and Asia Pacific markets posted double digit sales and profit improvements.

CCL Industries employs approximately 9,600 people and operates 87 production facilities in 25 countries across five continents. They are the world's largest converter of pressure sensitive and extruded film materials.




Two of the largest printing operations based in the United States are set to join forces with R. R. Donnelley & Sons Company this morning announcing plans to acquire Consolidated Graphics Inc. for approximately US$620 million.




R. R. Donnelley (RRD) signed a definitive agreement to purchase Consolidated Graphics, which has been unanimously approved by each company's Board of Directors. Joe Davis, Chairman and CEO of Consolidated Graphics, agreed to vote in favour of the merger agreement. His shares currently represent around 16.5 percent of all Consolidated Graphics outstanding shares.   
       

Under the terms of the transaction, Consolidated Graphics shareholders will receive a combination of $34.44 in cash and a fixed exchange ratio of 1.651 RRD shares for each outstanding share of Consolidated Graphics they own; or $62 per share based on RRD’s closing share price on October 23. This represents a transaction value of approximately $620 million, plus the assumption of Consolidated Graphics’ net debt.


“Consolidated Graphics is an exceptional fit with R.R. Donnelley and we are delighted to welcome them to our organization,” stated Thomas Quinlan III, President and CEO of RRD. “This strategic combination will complement the R.R. Donnelley platform and further enhance our ability to provide integrated communications solutions for our valued clients across all industry verticals.”

Consolidated Graphics primarily focuses on commercial printing, fulfillment services and print management. Headquartered in Houston, Texas, Consolidated Graphics controls 70 printing businesses located across 26 states, as well as operations in Toronto, Prague, and Japan.

The completion of the transaction is subject to customary closing conditions, including regulatory approval and approval of Consolidated Graphics’ shareholders.

EFI of California has purchased Metrix Software, which develops highly automated imposition software for print production. Financial terms of the acquisition were not disclosed, but EFI states it does not expect the move to be material to its Q4 or full-year 2013 results.



Metrix CEO and founder Rohan Holt becomes director of EFI Metrix products. He began the company in Australia as LithoTechnics, but in mid-2012 changed its named to Metrix Software with headquarters in Edmonds, Washington. The first version of Metrix was launched at drupa 2004 and, by the time of the company name change to Metrix Software, had eclipsed 1,000 installs in 22 countries.


“EFI and Metrix have had a positive working relationship for several years,” said Marc Olin, VP and GM of EFI’s Productivity Software business. “Adding the Metrix team’s exceptional talent and technical know-how helps us drive innovation even further.”

EFI plans to continue development and customer support for all of Metrix software products. Initially, the software is to be deployed as an imposition module for EFI’s Pace MIS product. EFI states over time Metrix’ technology is to become integrated with the company's other MIS and ERP workflow offerings.
 
The newest version Metrix, version 2013.0, was demonstrated in Chicago at PRINT 13 in September. The company pointed to the following new ehancements:


• Improved Layout tools, including the ability to copy and paste marks between Layouts,
• Instant assignment and reassignment of Products to Layouts,
• Ability to select multiple Products/Layouts/Components and alter multiple properties at once,
• Addition of Product Tags, for sorting and selective submission to Auto Plan,
• Enhanced intelligence built in to the Prepress Export functionality when error conditions are detected by Metrix,
• Project Reports can now be exported to PDF or a Printer. This works with Metrix Automation as well,
• A new PDF page re-ordering tool to fix improperly ordered content, and
• Support for Windows 8 and Server 2012.


MGI Digital Graphic Technology purchased a 100 percent interest in fellow French company Ceradrop, which specializes in developing inkjet systems for the printed electronics industry, including components for 3D printing.

MGI states the move is to take advantage of a growing economic sector. The market for printed electronics, according to IDTechEx market research, was estimated at US$9.4 billion in 2012, and is forecasted to grow to more than US$40 billion by 2020 and US$300 billion by 2030.

Based in Limoges, France, Ceradrop was founded in 2006 by members of the Centre National de la Recherché Scientifique (CNRS). The company’s high caliber customer list currently includes scientific laboratories like CEA and Centre National d' Etudes Spatiales in Fraunhofer, Germany, as well as industrial groups like Gemalto, DisaSolar and Thales. In North America, Ceradrop has been working closely with Northwestern University in Illinois.

Ceradrop develops systems for printing both 2D and 3D-ceramic and organic electronic components like antennas, Organic Light Emitting Diode (OLED) display screens, electronic chip cards, solar cells, RFID tags, printed batteries, and biomedical sensors. These components can be printed onto a range of materials like glass, metals, polymers, plastics and paper.

The company’s 15-member development team in Limoges is currently involved in major research programs, including work with SPrinTronics to produce disruptive solar technologies in sectors like medical, aerospace, digital security and electric vehicles. ASTRIJE, managed by CEA, is working with Ceradrop on the implementation of printed fuel cells using inkjet printing. Ceradrop is also working with DGA to develop CerMJet for printed ceramic magnetic components.


The Postmedia Network Corporation has announced it will sell two of its real estate holdings, responsible for the production of three of its newspapers: the Calgary Herald, the Vancouver Province and Vancouver Sun.

The company will sell its Kennedy Heights printing facility in Surrey, BC, and the Calgary Herald building in Calgary in order to pay down debt.  The Calgary Herald will be produced at TC Transcontinental beginning in November 2013. The company says it has invited union representatives in Vancouver to look at alternatives in producing the Vancouver papers.

According to a report by the CBC, one option for Vancouver is the opening of a new plant, but only if costs can be cut upwards of 70 to 75 percent. Otherwise, the papers produced at Kennedy Heights would also be outsourced to Transcontinental.

Postmedia Network announced last August the closure of its Eastgate plant in Edmonton, which produces the Edmonton Journal. That move eliminated 70 positions, with printing outsourced to nearby Great West newspapers.

In July, when it announced its quarterly results, the company posted a $112.2 million loss, primarily due to a non-cash impairment charge of $93.9 million. Print circulation revenue decreased 7.2 percent in the company’s first nine financial months while print advertising revenue decreased 12.7 percent.


Packaging Corporation of America (PCA) entered an agreement to acquire all outstanding common shares of Boise Inc. for an aggregate transaction value of US$1.995 billion. The move will increase PCA’s containerboard capacity by 42 percent.

The $2 billion transaction (all dollar figures are in U.S. currency) includes PCA taking on $714 million of Boise’s outstanding debt. The deal is expected to close in PCA’s fourth quarter of 2013, subject to regulatory approvals.

The combined companies generated $5.5 billion in sales and $879 million in EBITDA (excluding special items) in the last 12 months ended June 30, 2013. The combined packaging business generated 75 percent of sales and 83 percent of EBITDA over the period, with the remainder generated by Boise's paper business.

PCA's containerboard capacity will increase to 3.7 million tons from its current level of 2.6 million tons (a 42 percent increase), including the announced expansion of paper machine number 2 (D2) at Boise's DeRidder mill. PCA's corrugated products volume will increase by about 30 percent as a result of the acquisition. The move will also increase PCA's market presence into the Pacific Northwest.

“The acquisition is an excellent fit, both geographically and strategically, with unique and substantial synergies,” said Paul Stecko, Executive Chairman of PCA. “It provides the containerboard that PCA needs to support our strong corrugated products growth. The DeRidder containerboard mill is low cost, located in a very good wood basket and, after the D2 machine conversion, provides almost one million tons of primarily lightweight containerboard.”

PCA, headquartered in Lake Forest, Illinois, is the fourth largest producer of containerboard and corrugated packaging products in the United States with sales of $2.8 billion in 2012. PCA operates four paper mills and 71 corrugated product plants in 26 states across the country.


The boards of directors of both Boise and PCA have unanimously approved the agreement. Boise's board of directors expects to recommend that shareholders tender their shares into the offer once it is launched. The tender offer is required to be commenced within 10 calendar days and to remain open for at least 20 business days after launch. Any shares not tendered in the offer will be acquired in a second step merger at the same cash price as in the tender offer.

Boise Inc., headquartered in Boise, Idaho, manufactures a variety of packaging and paper products. Boise’s range of packaging products includes linerboard and corrugating medium, corrugated containers and sheets, and protective packaging products. Boise’s paper products include imaging papers for the office and home, printing and converting papers, and papers used in packaging, such as label and release papers.

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