Mergers & Acquisitions
CCL Industries of Toronto, a global packaging power, primarily in the label sector, is spending around $500 million to purchase two business units of office products maker Avery Dennison Corporation.
CCL Industries, according to a report by Associated Press, is acquiring Avery Dennison office and consumer products, as well as its designed and engineered solutions businesses. These Avery Dennison businesses had combined revenue of approximately $910 million in 2012.
The news of CCL’s acquisition follows the cancellation of an earlier proposed deal that would have seen 3M Co. purchase Avery Dennison’s office and consumer products division for $550 million. That acquisition, announced in January 2012, was ultimately cancelled in October 2012 over anti-trust concerns, as the Associated Press reported how the U.S. Department of Justice announced it would take legal action to stop the sale.
If the new deal between CCL Industries and Avery Dennison closes by the middle of the year, as expected, CCL will introduce a significant boost for its pressure-sensitive materials and retail branding and information solutions businesses. In addition to labels, CCL also produces containers and plastic tubes.
Led by President and CEO, Geoffrey Martin, CCL Industries consists of three divisions CCL Label, CCL Container and CCL Tube with over 70 manufacturing facilities in North America, Latin America, Europe, Asia, Australia and Africa operated by approximately 6,600 dedicated employees.
Swedish firm Plockmatic International has purchased UK-based Morgana. Morgana, a supplier of document finishing technology, will become a wholly owned subsidiary of Plockmatic, which also supplies the same market.
“For a long time we’ve had enormous respect for Morgana’s people and its products,” said Jan Marstorp of CEO Plockmatic, who will head the new group. “Together, these two innovative companies add value to the printed page as part of the communications mix.”
Plockmatic International is part of Grimaldi Industri Group, a Stockholm-based holding company. The company will continue to operate its Morgana division out of Milton Keynes, UK, managed by current Morgana head Quen Baum.
“The combined companies and brands will be even stronger in the market and will better serve our customers and staff,” said Baum. “We look forward to the future and to being part of Plockmatic and the Grimaldi Industri Group.”
Xeikon NV, which is best known for developing web-fed toner presses for packaging, document and commercial printing applications, announced it is in discussions to be taken over by an external party. The company has not yet named the party it is engaged with, which could range from competing press manufacturers to private equity companies.
A short, publicly released company statement explains “[Xeikon] has engaged in discussions with a party, who has indicated to Xeikon that it may be interested in entering into a potential transaction regarding Xeikon, by way of making a public takeover bid for all shares in the capital of Xeikon.
The statement confirms, “Parties are currently engaged in initial discussions on a potential transaction. Further announcements will be made if and when circumstances so require."
In addition to its toner presses, which utilize LED-array-based imaging and robust proprietary front-end processing, Xeikon NV also develops CTP systems through its basysPrint and thermoFlexX brands.
Kodak announced in late December that it has successfully sold its patent portfolio for US$525 million to a consortium led by Intellectual Ventures.
"This monetization of patents is another major milestone toward successful emergence," Antonio Perez, Kodak's Chairman and Chief Executive Officer, said. "Our progress has accelerated over the past several weeks as we prepare to emerge as a strong, sustainable company. This proposed transaction enables Kodak to repay a substantial amount of our initial DIP loan, satisfy a key condition for our new financing facility, and position our Commercial Imaging business for further growth and success."
Kodak’s sale of these patents were a key condition to it obtaining financing worth US$793 million from bondholders. The patent sale had been announced in February 2012, but elicited little interest. Kodak originally valued the patents at between $2.2 and $2.6 billion.
The consortium purchasing the patents include major tech players such as Facebook, Google, Microsoft, Apple, Samsung, RIM, HTC, Fujifilm, Huawei, Amazon, and Shutterfly. As a result of this deal, Kodak agrees to drop patent cases against the purchasing companies, the most notable of which was a $1 billion suit against Apple last year.
After the sale of these 1,100 digital imaging patents, Eastman Kodak still retains over 9,600 patents in other business areas.
RP Graphics Group of Mississauga, Ontario, has purchased all of the outstanding shares of Data in Motion Marketing, a variable data imaging and specialty finishing company. The acquisition adds significant capacity for RP Graphics to manage and process direct mail work.
“This acquisition is an excellent fit for RP Graphics Group,” said Marc Fortier, who became President of RP Graphics Group in July 2012. “Data in Motion Marketing is an innovative company focused on technology; a perfect fit for our company. We have had a long standing relationship with Data in Motion Marketing and this is the logical next step for both our companies”
Data in Motion Marketing has been integrated into RP Graphics’ Mississauga facility and is a part of the security infrastructure RP Graphics has built to support its activities in the direct-marketing sector. Data in Motion Marketing will continue to operate as brand.
“Data in Motion Marketing needed scale and scope to get to the next step,” said Kareem Sesook, Founding Partner Data in Motion Marketing. “Combining our capabilities with the broad range of services available at RP Graphics benefits our clients and allows the combined sales force to develop new opportunities.”
North Plains, a digital-asset management provider based in Toronto, has purchased VYRE, a UK-based developer of marketing resource management (MRM) and brand asset management (BAM) software.
The acquisition, according to North Plains, extends its reach into the MRM space, which is to be leveraged with the company's existing expertise in digital and brand management tools to establish a full creative asset lifecycle on a single platform. North Plains focuses on helping companies effectively use their visual media content like images, photos, videos and 3D designs.
“This acquisition continues our rigorous focus on enabling North Plains customers to better connect and engage with their target audience by unleashing the power of their visual media," stated James Christopher, President and CEO, North Plains. “We’re fortunate enough to work with some of the most innovative brands in the world, helping them to create brand value and drive business growth.”
In May 2011, VYRE launched its On Brand technology as a software-as-a-service (SaaS) solution to provide management of brand guidelines, brand assets and creative workflows. VYRE also previously developed Unify, which is a Web-based marketing application platform.
With offices in Canada, the United States and Europe, North Plains claims to provide its technologies to more than 1,400 clients and 1,000,000 users, worldwide.
EFI of Foster City, California, acquired Technique, which develops management information systems (MIS) and enterprise resource planning (ERP) software products for the printing and packaging industries. Financial terms of the acquisition were not disclosed.
Technique consists of privately held Technique Business Systems Limited located in Leeds, United Kingdom, and Technique Inc. based in the state of Delaware. Techique’s technology joins an extensive set of MIS/ERP software owned by EFI, including Monarch, Pace and Radius solutions.
“We are excited to have Technique join the EFI family and our expanding portfolio of business automation technologies,” stated Marc Olin, GM of EFI’s Productivity Software business unit. “Many customers have benefited from the key technology advantages of the Technique solution, and we intend to continue to develop and support the product for many years into the future. We will also provide Technique customers an integrated workflow with our industry leading Fiery digital front ends and Inkjet portfolio including VUTEk, Jetrion and wide format devices.”
The Technique management team and employees will join EFI as part of its Productivity Software Business Unit. EFI plans to highlight Technique and its portfolio at the company’s upcoming annual user conference, EFI Connect, which takes place January 15-18, 2013, at Wynn Las Vegas.
“EFI remains committed to the business and to the long-term global market opportunity with this investment,” said Sean Whelan, EFI’s Director Productivity Software European operations. “Through our existing global operations, we are able to strengthen and expand the support network for the Technique customers now and for many years into the future.”
Presstek Inc. has finalized its acquisition by MAI Holdings, an affiliate of American Industrial Partners Capital Fund (AIP).
AIP is self-described as a middle market private equity firm that has been investing in North American industrial businesses since 1989. Since that time, AIP has completed more than 30 transactions and is currently managing more than US$1 billion in committed capital.
“I look forward to continuing to focus the company on its key growth strategies of going up market and expanding into new markets with AIP's backing,” stated Stan Freimuth, Presstek President and CEO. “I am confident that this transaction will be beneficial to Presstek and its customers."
Under the terms of the merger, Presstek's shareholders will receive $0.50 in cash for each share of Common Stock.
Presstek was founded in 1987 based upon its direct imaging laser applications. Since then the technology has found its place in presses from Ryobi, Heidelberg, Xerox, KBA and Kodak. In 2004, Presstek acquired ABDick and Precision Lithograining. Today the company holds over 400 patents relating to the printing industry.
International publishing giants Bertelsmann and Pearson have announced plans to merge their trade book publishing businesses. Their Random House and Penguin brands will be combined in most of the world by the second half of 2013, pending regulatory approval.
Bertelsmann will own 53 percent of the new entity while Pearson will take the remaining 47 percent. Random House CEO Markus Dohle will be CEO of the new organization while Penguin CEO John Makinson will be Chairman. The combined entity is expected to control over a quarter of the world's consumer publishing market.
"With this planned combination, Bertelsmann and Pearson create the best course for the future of our world-renowned trade-book publishers, Random House and Penguin, by enabling them to publish even more effectively across traditional and emerging formats and distribution channels," said Bertelsmann Chairman and CEO Thomas Rabe. "It will build on our publishing tradition, offering an extraordinary diversity of publishing opportunities for authors, agents, booksellers, and readers, together with unequaled support and resources."
Bertelsmann will be retaining control of Verlagsgruppe Random House, its Munich-based German-language publishing division. According to a press release about the merger, the two companies' publishing imprints will retain their current autonomy with "distinct editorial identities."
Gütersloh, Germany-based Bertelsmann has 100,000 employees worldwide through its media divisions and in 2011 earned over €15.3 billion in revenues. The company was founded in 1835 as a publishing house and print shop. London-based Pearson had revenues of £5,862 million in 2011 with over 37,000 employees.
Quad/Graphics Inc. of Sussex, Wisconsin, signed an agreement to purchase substantially all of the assets of Vertis Holdings for US$258.5 million. The move comes shortly after Vertis filed for Chapter 11 bankruptcy protection in the United States. The US$258.5 million purchase would include a payment of around US$88.5 million for current assets that are in excess of normalized working capital requirements.
Vertis Holdings, Inc., through its subsidiaries, produces insert advertising programs, television listing magazines, comics, and special supplements for newspapers, as well as the design and production of direct mail and related marketing services.
“Quad/Graphics believes in the power of print in today’s multichannel media world and this acquisition further strengthens our ability to help retailers and direct marketers drive meaningful business results,” said Joel Quadracci, chairman, president and CEO of Quad/Graphics. “The combination of Quad/Graphics and Vertis is a natural and strategic fit.”
Following the pending acquisition announcement, Reuters reported that Standard & Poor’s Ratings Services placed Quad/Graphics Inc. on its CreditWatch list, with a BB+ rating. Standard & Poor stated: “We believe the acquisition will weaken Quad's business risk profile by increasing its exposure to a poorly performing company in a sector already under secular decline. Vertis will require significant management attention to be integrated efficiently with Quad. As a result, we expect Quad's EBITDA margin to be negatively affected over the next two years.”
Quad/Graphics announced that it intends to use cash on hand and draw on its revolving credit facility to finance the acquisition of Vertis, which it expects to generate approximately $1.1 billion in revenues during fiscal year 2012.
“The complementary capabilities of our two businesses in retail advertising inserts, direct marketing and in-store marketing will further strengthen and expand our offerings,” added Quadracci, “and will allow us to even better serve our clients, achieve additional efficiencies and build long-term value for our shareholders.”
EFI of Foster City, California, purchased Online Print Solutions (OPS), which develops software for Web-to-print, publishing and cross-media marketing. OPS software is to become part of EFI’s Productivity Software portfolio.
EFI states it will continue offering its Digital StoreFront software along with the newly acquired OPS products, with future plans to integrate OPS features into Digital StoreFront. Ultimately, this will result in a single new platform as the two product groups are combined over the coming years.
“We are very pleased to bring OPS into our growing Web-to-print customer community and combine our world-class offerings in the market,” stated Marc Olin, Senior VP and GM of EFI’s Productivity Software division. “With our track-record of providing the industry’s largest and most comprehensive cloud offering, EFI has seen Web-to-print expand and become a standard way of doing business around the world.”
OPS, consisting of a privately held Australian company called DataCreation Pty Ltd. and an Irish company called Online Print Marketing Ltd., has offices in Dublin, Boston, and Sydney, Australia.
“The OPS team and I are very excited about joining EFI, a clear leader in MIS/ERP and e-commerce software for print,” stated Mark McGowan, founder of OPS. “We look forward to sharing our expertise in the areas of Web-to-print, cross-media marketing, and variable data printing to enhance EFI products.”
Fujifilm Holdings Corporation of Tokyo signed a definitive agreement with Salmat Limited, described as Australia's largest business service provider, to acquire Salmat's Business Process Outsourcing (BPO) division.
The pending AU$375 million acquisition ($387 million in Canadian dollars) covers all the shares of Salmat Document Management Solutions Pty. Limited (SDMS), which holds 11 subsidiaries, as well as Salmat Asia Limited.
The consolidated sales and underlying EBITA of SDMS and Salmat Asia were AU$316 million and AU$49.5 million, respectively, for the June 2012 term. Established in 1979, Salmat Limited has approximately 5,000 employees with 54 operation bases in Australia, New Zealand, Hong Kong, Singapore, the Philippines, Malaysia, the United States and the United Kingdom.
This BPO business includes printing and delivering electricity, gas, water, and communications invoices and bank account statements to end users. The BPO operations also focus on the digitizing and automatic processing of corporate clients' invoicing work to reduce costs, delivering information by email, as well as compiling a database of scanned paper documents and their management/storage.
The BPO market, according to Fujifilm, is predicted to grow by an average of five to seven percent per year, worldwide. The company describes BPO as the outsourcing of specific operations of corporate activities, including planning, designing and administration, to a dedicated contractor.
Noting document solutions as one of its key growth areas, Fujifilm Holdings points to what it sees as a business shift from the hardware-centric business offering multifunction devices and printers to the solutions and services business.
Lexmark International has announced restructuring actions which will see the elimination of 1,700 jobs worldwide, as well as the end of its inkjet hardware production. The company will instead focus on "higher value imaging and software."
"Today's announcement represents difficult decisions, which are necessary to drive improved profitability and significant savings," said Paul Rooke, Lexmark Chairman and Chief Executive Officer. "Our investments are focused on higher value imaging and software solutions, and we believe the synergies between imaging and the emerging software elements of our business will continue to drive growth across the organization."
Lexmark will close its Cebu, Philippines, inkjet supplies manufacturing facility by the end of 2015. Inkjet development will also cease by the end of 2013 and its inkjet technology holdings will be put on sale.
According to Lexmark, these cuts are expected to generate $85 million in savings in 2013, growing to annualized savings of $95 million by 2015. The total program pre-tax cost for these actions is expected to be $160 million, with $110 million incurred in 2012, $30 million incurred in 2013, and the remaining $20 million incurred in 2014 and 2015. The total program cash flow impact for these actions is expected to be $75 million.
Eastman Kodak last week announced its next step towards emergence from Chapter 11 reorganization, which will see the company sell its Personalized Imaging and Document Imaging businesses.
“We are reshaping Kodak," said company Chairman and CEO Antonio Perez. “We continue to re-balance our company toward commercial, packaging and functional printing – in which we have the broadest portfolio solutions – and enterprise services. These businesses have substantial long-term growth prospects worldwide and are core to the future of Kodak. We are confident that our competitive advantages in materials science and deposition technologies, as well as our know-how in digital imaging, will enable us to capitalize on those opportunities and extend our leadership in key growth markets.”
The Personalized Imaging business consists of its Retail Systems Solutions (RSS), Paper & Output Systems (P&OS) and Event Imaging Solutions (EIS) divisions. RSS contains the company's retail print solutions for its 105,000 Kodak Picture Kiosks; P&OS is the company's portfolio of photographic paper and still camera film products; EIS provides souvenir photo products at theme parks and other venues. The Document Imaging business produces scanners, capture software and services to enterprise customers.
Kodak has announced it will continue to operate, in addition to its commercial, packaging and functional printing businesses, its Consumer Inkjet, Entertainment Imaging, Commercial Film and specialty chemicals businesses.
“As we move forward with the Chapter 11 process, we are focused on delivering the highest value to our creditors so that we can emerge as a sustainable, profitable company that continues to meet the needs of our customers,” Perez concluded.
Kodak says it aims to sell the announced divisions in the first half of 2013. The company is aiming to emergence from Chapter 11 by the end of next year.
Presstek, a longtime vendor of printing equipment has announced its sale to MAI Holdings, an entity affiliated with American Industrial Partners Capital Fund. AIP's portfolio includes flexographic machinery manufacturer Mark Andy.
"We are excited to combine the financial resources of AIP with the strong product portfolio of Presstek," said Stanley E. Freimuth, Presstek's Chairman, President and CEO. "We believe that this combination will help to fuel the growth of the company, which has been challenging over the past few years as a result of the worldwide economic downturn."
Presstek's shareholders will receive $0.50 in cash for each share of the company's common stock, a premium of 16.3 percent over the closing share price on August 22. While the sale has been unanimously approved by Presstek's Board of Directors, the deal still needs to be approved by shareholders. The company says the deal is expected to be completed during the fourth quarter.
Presstek was founded in 1987 based upon its direct imaging laser applications. Since then the technology has found its place in presses from Ryobi, Heidelberg, Xerox, KBA and Kodak. The company also developed and released its "chemistry-free" CTP devices. In 2004, Presstek acquired ABDick and Precision Lithograining. Today the company holds over 400 patents relating to the printing industry.
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