Mergers & Acquisitions
Mi5 Print & Digital Communications of Markham, Ont., over the past month has purchased certain assets and intellectual capital of two well-known printing companies in the Greater Toronto Area.

On July 6, Mi5 finalized its acquisition of Magnum Fine Commercial Printing Ltd., which was controlled by John Popovski, CEO of Media-Vision in Toronto. Popovski had purchased Magnum Fine one year earlier (July 2014) for $1.5 million from Intertainment Media Inc.

Mi5, on July 6, also acquired intellectual capital of Media-Vision, which primarily amounts to its name and associated brand vehicles, and then hired approximately 17 Media-Vision employees – a combination of salespeople, CSRs and pressroom operators, who have already been integrated into Mi5. Another 12 Magnum Fine employees have joined Mi5.

On July 21, the Ontario Supreme Court of Justice approved Mi5’s auction bid for specific assets of J. F. Moore Lithographers Inc. of Scarborough. J.F. Moore first filed a Notice of Intention to Make a Proposal under the Bankruptcy and Insolvency Act (BIA) in April 2015 and was subsequently granted a couple of extensions to work through a restructuring process. Following a June 23 court extension, however, J.F. Moore, controlled by Dean Baxendale, and its trustee moved to an auction process, through the BIA, allowing third parties to bid on the company as a whole or for specific assets.

Through this process, Mi5 is acquiring JF Moore’s book of business and intellectual capital, the latter of which includes its name and related brand properties. J.F. Moore itself is being liquidated on July 31 by Asset Services Inc. (ASI), which is scheduled to hold a J.F. Moore equipment auction between late August and early September. Approximately 12 J.F. Moore employees, including Dean Baxendale, are joining Mi5 in Markham on August 1.

“Dean reached far more into his own pocket than any other owner I have ever seen and it was done out of trying his best to do the right thing,” says Derek McGeachie, Chief Vision Officer of Mi5. “He protected a lot of his suppliers more than anybody else I have ever seen in his situation and I have a lot of respect for him for doing that.

“And [Dean] is continuing on, which is the other good thing. He is joining us and his goal is to fix what wasn’t right and make it much better going forward. That is admirable as well. He is not running away,” says McGeachie.

McGeachie, who founded Mi5, stepped back as CEO earlier this year in favour of Sheryl Sauder, who now leads the Markham company, one of North America’s fastest growing printing operations, which now generates around $40 million in annual revenues. McGeachie estimates the J.F. Moore and Media-Vision assets will initially bring approximately $10 million in additional sales.

“J.F. Moore is a good company. They have been around for 30 years, basically,” says McGeachie. “They have great customer relationships that we are looking forward to building on… the second good opportunity is they have some excellent, capable people that we are thrilled to have on board and the third opportunity is that they have some strengths in direct mail and digital small-format that we are happy to bring on board as well.”

The acquisition of Magnum Fine Commercial Printing, and hiring of Media-Vision staff, also brings in some new capabilities to Mi5. “They have some expertise that we do not have in their personnel, so that is exciting,” says McGeachie. “And we have a lot of expertise they don’t have, so I think there was a good opportunity to mix the two companies together and we are stronger together than we are apart.”

The Magnum Fine purchase provides two foiling machines and a cylinder die press, but only one of Magnum’s three Heidelberg Quickmaster DI presses is being set up at Mi5. The asset purchases are primarily about obtaining book of business and acquiring the well-known names of Media-Vision and J.F. Moore, which McGeachie also acknowledges to hold some risk based on the fact that many suppliers are hurt when companies wind down through either the BIA or Companies' Creditors Arrangement Act.

“Our society over the last couple hundred of years has formulated these bankruptcy rules so that they minimize the damages essentially among all parties,” says McGeachie. “If they didn’t have this system what would the alternative be? These companies would just dissipate and become nothing and there would be no highest-bidder auction going on and there would be less money going to the creditors.”

In the J.F. Moore liquidation process, a little more than $300,000 remains owed to unsecured creditors prior to the upcoming auction process. “Unfortunately, there is a ranking of people who are owed money and banks are sophisticated entities and they secure their loans,” says McGeachie. “Then the less sophisticated guys, which includes us, essentially give unsecured loans to these companies and that is a big question in our industry. I have seen all of the suppliers tighten up and I think that is ultimately a good thing... it is dangerous when you give too much free credit.”

Canadian Bank Note Company, based in Ottawa, Ont., has acquired commerical printer Unicom Graphics of Calgary. Unicom is to be integrated into CBN's McAra Printing division, also of Calgary. The merged operation is currently being referred to as McAra Unicom.

“By combining the complementary strengths of two leading Calgary-based commercial printers, we have created a single exceptional print solutions provider,” said Ronald Arends, President and CEO of Canadian Bank Note (CBN). “[We are] committed to providing McAra Unicom investment and technical support to successfully grow the business.”

Over the past six years, CBN has invested more than $10 million in printing technology alone for its McAra operation, including the December 2013 installation of a new Heidelberg XL106 10P+UV sheetfed press. Weighing around 112 tons and measuring 75 feet in length, this was the first press of its kind to be installed in Canada.

The 41-inch Heidelberg perfecting press is able to run both conventional and UV inks at up to 15,000 sheets per hour (straight or perfecting). Among a raft of modern features, the press includes automatic plate loading and Heidelberg’s Hycolor inking and dampening system, as well as two inline spectrophotometers to inspect every sheet produced on the press.

Based out of a 45,000-square-foot facility, McAra in 2011 installed what was Calgary’s largest solar array when 48 solar modules on its rooftop. These 48 photovoltaic modules hold an electrical generating capability of 11,280 watts.

“CBN is a strong parent company," said Dean McElhinney, General Manager, Unicom Graphics. "McAra Unicom is now well positioned to be the leading print solutions provider in Calgary."

The Unicom purchase provides CBN with further lithographic assets, including UV technology, as well as digital print and wide format services, finishing (binding, foiling and embossing), direct mail and fulfillment.

"Merging our two operations with strong business ethics, complementary capabilities and deep technical knowledge will significantly strengthen and extend our capabilities,” said Rodger Grant, General Manager, McAra Printing.

Established in 1897, Canadian Bank Note now has 10 locations worldwide with over 1,400 employees. The company provides integrated hardware, software, print, and systems services to organizations and governments in Canada and throughout the world. CBN focuses its security applications into four primary markets; Payment, Identification, Lottery and Shareholder Services including commercial print.

Tapp Label of Napa, California, has purchased Metro Label, headquartered in Toronto with locations also in Napa and Vancouver.

This is the fourth acquisition in less than a year for Tapp Label, led by David Bowyer, CEO and Owner, and provides the U.S. firm with an East Coast location.

Founded in 1974, Metro Label specializes in high-end decoration label, shrink/sleeve and flexible packaging markets for clients in markets like wine, spirits, pharmaceutical, health and beauty. Metro Label has clients throughout the United States, Canada, Central America and the Caribbean.

Tapp states Metro Label will continue to be known as Metro Label for Toronto-based customers and Tapp Label for West Coast customers.

Founded in 1992, Tapp Label now operates from seven facilities on the East and West Coast and employs over 300 staff.

EFI announced the purchase of two companies on July 1 extending its inkjet printing interests, including Matan Digital Printers, which focuses on grand-format printing, and Reggiani Macchine, which focuses on textiles.

EFI explains the Matan purchase fills a key spot in its product portfolio for a lower-acquisition cost line of roll-to-roll printers aimed on signage, banners, billboards and fleet graphics. Based in Rosh Ha’Ayin, Israel, Matan has developed super-wide inkjet systems, primarily with in-line cutting and slitting, for more than a decade.

Matan’s work force of approximately 70 employees has joined EFI, which the company describes as providing it with a significant presence in Israel. Yosefi becomes VP and GM of EFI Inkjet Israel.

EFI’s all-cash acquisition of Matan pays the shareholders approximately $29 million to acquire all outstanding shares. Under the purchase agreement, EFI also assumed approximately $5 million of Matan’s debt, and deposited $14 million into escrow, portions of which may be released to the sellers in 2017 and 2022.

Four days later, EFI entered the textile printing market with its acquisition of Reggiani Macchine of Bergamo, Italy, which has been active for more than 60 years. Reggiani is a provider of inkjet printers utilizing water-based inks for printing on fabric.

Reggiani’s technologies, which will be rebranded as EFI Reggiani, address a range of textile printing, with systems suitable for water-based dispersed, acid, pigment and reactive dye printing inks.

“This acquisition gives EFI an immediate leadership position in one of the world’s largest industries undergoing the transformation from analogue printing to digital,” said EFI CEO Guy Gecht. “The textile printing market is just beginning that transition.”

Reggiani has customers in more than 120 countries served by a wide distribution network and agents in over 40 countries. Its workforce of approximately 190 employees joins EFI.

To acquire all of Reggiani’s outstanding shares, EFI will repay Reggiani debt of about €20.1 million (US$22.6 million), pay the former Reggiani shareholders up to about €27.4 million (US$30.8 million) of cash, and issue the former Reggiani shareholders up to about €27.4 million (US$30.8 million) of EFI stock, and will pay up to €50 million (US$56.2 million) in the future as long as the next 30 months based on the achievement of revenue and profitability targets.

 

Taylor Corp. of Minnesota, one of the largest private graphics communications companies in North America, announced it will acquire the assets of Dayton, Ohio-based Standard Register Co., pending court approval. The news was quickly followed by a report on Daytondailynews.com that Joseph Morgan Jr. had resigned from his position as President and CEO of Standard Register to accept a leadership role with another company.

The acquisition is the result of Taylor’s successful bid for the company through a bankruptcy auction held last week. Final approval of the sale is subject to resolution of outstanding objections before the U.S. Bankruptcy Court in the District of Delaware. Pending that approval, the parties expect to complete the transaction within 45 to 60 days.

With this acquisition, Taylor expects to add over 3,000 employees from Standard Register locations around the United States and Mexico. “While Standard Register has encountered financial challenges, I have no doubt its best days are ahead,” said Deb Taylor, CEO of Taylor Corp. “The acquisition by Taylor Corp. is the best possible outcome for all involved – and most of all Standard Register’s customers. Taylor Corp. provides the strong and reliable financial foundation that will allow the company to turn the page and focus on the future.”

Standard Register Co. on March 12 announced that it and its subsidiaries filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the United States.

The company also announced that it is pursuing a sale process and has entered into an acquisition agreement with an affiliate of Silver Point Capital L.P., a private investment firm managing approximately US$8.5 billion in combined assets. Under the proposed purchase agreement, Standard Register’s assets will be sold for approximately US$275 million plus the assumption of certain liabilities.
Grimco, a distributor of printing systems and medias for the signage industry, continues its investment in the Canadian market with purchase of the Access Imaging, a division of Access Group, which took place in April 2015.

Based in St. Louis, Missouri, Grimco made a significant move into the marketplace one year ago, in July 2014, purchasing the Canadian operations of Proveer Sign and Graphics, which had five locations across the country – Toronto, ON, Montreal, QC, Dartmouth, NS, Calgary, AB, and Vancouver, BC. Grimco previously bought the United States interests of Proveer in May 2012, bringing its scope south of the border to more than 40 locations.

A spokesperson from Grimco indicated the company plans to maintain its existing five locations in Canada, while the Access Imaging purchase expands its wide format sales and technical expertise in multiple markets.

“The Canadian sign industry is growing and expanding in exciting ways,” explained the spokesperson. “The knowledge and creativity of the customers is what really attracted us to the market. We are excited about the ability to offer our customers the benefits of our North American purchasing power while maintaining a local presence in each market.”

Brother Industries formally completed the acquisition of Domino Printing Sciences plc, having met all the conditions of the offer first announced on March 11, 2015.

Domino is a global developer and manufacturer of inkjet-based coding, marking and printing equipment, as well as the supply of aftermarket products and customer services. Brother Industries noted its desire to delve deeper into the inkjet printing sector as a key reason for the purchase.

Brother Industries indicates the Domino brand and management structure is to remain unaltered, with Domino Printing Sciences operating as an autonomous division within Brother.

“Brother respects and values Domino’s brand equity, technologies and strategic vision for the business and the markets it serves,” said Nigel Bond, CEO of Domino Printing Sciences. “As such, the companies will be working closely together on natural growth opportunities, as well as explore collaborative possibilities to develop new products.”

Founded in 1978, Domino now employs 2,600 people worldwide and sells to more than 120 countries through a global network of 25 subsidiary offices and more than 200 distributors. Domino’s manufacturing facilities are situated in China, Germany, India, Sweden, Switzerland, U.K. and U.S.

Brother Industries, based out of Japan, has more than 34,988 employees and generated just over $5 billion in revenues last year.

MET Fine Printers of Vancouver, BC, led by President Nikos Kallas, purchased certain assets and business activities of Rhino Print Solutions, including its Calgary facility, which will be integrated into MET’s operations. Full terms of the arrangement between the two private companies are not being disclosed.

Senior members of the Rhino team are joining MET and all business will operate exclusively under MET Fine Printers. MET’s President Nikos Kallas and the senior management group will lead the expanded company.

“We’re excited about the opportunities and benefits made possible through combining the talents, resources and experience of our companies,” said Kallas.

In August 2014, RP Graphics Group Ltd. announced it had acquired and integrated Rhino's Toronto facility, formerly Marcam Cross Media Limited. David Allen, CEO and President of Rhino, acquired Marcam two years ago in May 2013.
Esko has acquired Minneapolis, Minnesota’s MediaBeacon Inc., which develops Digital Asset Management (DAM) software. MediaBeacon’s DAM tools, currently sold primarily in the United States through direct distribution and OEM partnerships, are applied in a range of industries from retail and consumer packaged goods to media, print and the public sector.

“It is Esko’s strategy to digitize and integrate the entire packaging production workflow from design all the way to finished packs and displays in the store. With this acquisition, we further our transformation from a prepress solution provider to an end-to-end supplier in the packaging world,” said Udo Panenka, Esko President.

Headquartered in Gent, Belgium, Esko employs around 1,400 people worldwide with direct sales and service organizations in Europe, Middle East and Africa, the Americas and the Asia Pacific, Japan and China regions. It has a network of distribution partners in more than 50 countries.

Jason Bright, CEO and founder of MediaBeacon, is assume the role of Chief Technology Officer to work with the Esko R&D teams to drive software integration between the a range of platforms.

Heidelberger Druckmaschinen AG today signed an agreement with investment company CoBe Capital for Heidelberg to acquire the European Printing Systems Group (PSG) headquartered in the Netherlands. Through this acquisition, for which the purchase price is to remain undisclosed, Heidelberg would expand its services and consumables business.

Heidelberg expects the acquisition of the PSG Group, which is subject to regulatory approval, to result in additional sales of around €130 million for the Heidelberg Group, primarily through services and consumables business. The medium-term goal at Heidelberg is for services and consumables to account for over 50 percent of total Group sales. The figure currently stands at around 40 percent.

PSG has approximately 400 employees in the Benelux countries (Belgium, the Netherlands, and Luxembourg) and southern Europe. It has worked closely with Heidelberg for several decades. PSG currently generates over half of its revenue through the sale of services and consumables, with Heidelberg products accounting for the majority of the company’s equipment sales.

“PSG’s strength in the services and consumables business and its outstanding access to customers are very attractive to us,” said Gerold Linzbach, CEO of Heidelberg. “Having eliminated unprofitable portfolio items, we’re now starting to actively expand our portfolio in order to return the company to growth."

Grenville Management and Printing of Toronto, led by President Michael Burke, has purchased NCO Technologies, resulting in a combined company now operating as NCOGrenville. NCO Technologies is described as the largest dealer of Canon Imaging Systems in Ontario.

NCO has been serving thousands of private and public sector clients for over 40 years. Previously based out of Newmarket, NCO Technologies, while retaining its management, sales and support teams, is moving to its downtown Toronto and Markham facilities.

As a combined company, NCOGrenville will be able to provide both hardware and software solutions for building document workflows, offering a suite of on-site and off-site services to private and public sectors across Canada.

 

Cimpress entered into a definitive agreement to acquire Exagroup SAS, a Web-to-print business in Europe that focuses on serving French-language graphic arts professionals and printers. Exagroup was founded in 1999. Cimpress is the newly named holding company for Vistaprint, which now holds several European Web-to-print assets in addition to its well-known North American entity.

Under the terms of the agreement, Cimpress will acquire 70 percent of the shares of Exagroup for a purchase price of approximately €91.5 million with an option to acquire the remaining 30 percent of the shares in 2019 for a price between €39 million and €47 million, subject to the achievement of financial performance targets for calendar year 2017.

The acquisition, according to Cimpress, supports its strategy of building an operational platform for producing mass customizable products like signage, printing, apparel and promotional products. Cimpress produces more than 80 million unique products a year via its network of computer integrated manufacturing facilities. Exagroup provides an existing network of outsourcing partners.

Exagroup’s largest brand, Exaprint, follows a trade-printing model in that it serves graphic arts professionals and offline printers who, in turn, resell to end customers. Exagroup also goes to market via a network of almost 1,000 Web-to-store retail partners under the PrintyShop brand and via the Pure Impression brand.

“Over the past 15 years, Exagroup has earned the loyalty of local printers, copy shops and graphic arts professionals by delivering a wide array of innovative, creative and high-quality products via a simple-to-use extranet," said Robert Keane, President and CEO of Cimpress, "Complemented by white-label marketing tools that enable resellers to fully control and own the relationship with the end customer.”

Keene continued to explain Cimpress plans to continue to invest in what he refers to as a reseller-focused value proposition – “to bring even more value to Exagroup resellers.”

In calendar year 2014, Exagroup’s revenue was approximately €76 million, reflecting year-over-year growth of 17 percent. Exagroup’s free cash flow in calendar year 2014 was approximately €5 million and its EBITDA was approximately €14 million.

Subject to satisfaction of various closing conditions, including antitrust clearance, Cimpress expects the transaction to close during its fourth fiscal quarter of 2015. Cimpress’ portfolio of brands includes Vistaprint, Albelli, Drukwerkdeal, Pixartprinting, among others.

 

Central National-Gottesman Inc., a U.S.-based distributor of pulp, paper and forestry products, announced today its purchase of Spicers Canada, adding to the company’s portfolio of regional paper merchants.

 

Headquartered in Vaughan, Ontario, Spicers Canada is one of the country’s largest distributors of fine paper, sign and display media, industrial packaging and graphic arts supplies. The company operates 15 warehouse locations throughout Canada, as well as sheeting facilities and cash-and-carry stores serving local markets.

“Spicers Canada has a very strong competitive position in the market, reflecting its scale, deep set of service capabilities and exceptional leadership,” said Andrew Wallach, President and CEO, Central National-Gottesman (CNG). “We are looking forward to working with [President] Cory Turner and his team to build upon the company’s excellent reputation and market leadership.”

Spicers Canada is a subsidiary of Australia-based PaperlinX Limited and ties its history back 70 years in Canada. CNG states Spicers Canada and its nearly 500 employees will continue to operate independently.

Spicers Canada represents the eighth acquisition of a regional paper merchant since 2010 for CNG’s North American distribution division and is expected to add approximately $400 million in annual sales.

“This transaction is an excellent fit with our existing strategy to grow organically and through strategic acquisitions,” added Ken Wallach, CNG’s Executive Chairman. “We believe it demonstrates our enduring commitment to the paper distribution business in North America.”


Spicers Canada joins CNG merchants Lindenmeyr Munroe, Spicers Paper (US) and Kelly Paper in the company’s Distribution Group. The deal is expected to close at the end of February pending approval by the Competition Bureau of Canada.

CNG is a $5 billion, global marketer of pulp, paper, tissue, packaging and plywood. The company was founded in 1886 and headquartered in Purchase, NY.

RR Donnelley & Sons of Chicago signs an agreement to purchase book manufacturer Courier Corp., which terminated an earlier US$260 million merger agreement with Quad/Graphics.

RockTenn Co. and MeadWestvaco Corp. agree to merge and create a nearly US$16 billion packaging powerhouse supplying a vast range of consumer and food product containers, supported by a network of forest resources, mills and printing facilities.

Headquartered in Norcross, Georgia, RockTenn alone has around 27,000 employees throughout the United States, Canada, Mexico, Chile, Argentina and China. The company is involved with corrugated packaging, merchandising displays, consumer packaging and related recycling.

MeadWestvaco is also a global company that operates in the healthcare, beauty and personal care, food, beverage, home and garden, tobacco, and agricultural industries. It has a network of 125 facilities and 15,000 employees in North America, South America, Europe and Asia.

“This transaction brings together two highly complementary organizations to create a new, more powerful company with leadership positions in the global consumer and corrugated packaging markets,” said Steven Voorhees, CEO of RockTenn. Voorhees is to serve as CEO and President of the newly combined company. John Luke Jr., current Chairman and CEO of MeadWestVaco is to become Non-executive Chairman of the Board of Directors, comprised of eight directors from RockTenn and six directors from MeadWestVaco.

The transaction requires the approval of shareholders of both companies and is subject to regulatory approvals. If approved, the merger will create a company, to be named prior to closing, with a combined equity value of US$16 billion – based on net sales of US$15.7 billion and adjusted EBITDA of US$2.9 billion, including the impact of $300 million in estimated annual synergies to be achieved over three years.

Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, MeadWestvaco stockholders will receive 0.78 shares of the new company for each share they currently hold. RockTenn shareholders will be entitled to elect to receive either 1.00 shares of the new company or cash in an amount equal to the average price of RockTenn common stock during a five-day period before closing.

The resulting ownership of the new company will be approximately 50.1 percent by MeadWestvaco shareholders and 49.9 percent by RockTenn shareholders. Based on the shares outstanding today, approximately seven percent of RockTenn shares will receive cash in lieu of stock. The parties also plan to spin-off of MeadWestvaco’s specialty chemicals business after completing the merger. The specialty chemicals are produced for the automotive, energy and infrastructure industries.

In Canada, RockTenn’s current presence includes containerboard mills in La Tuque, Quebec, as well as container plants in Calgary, Alberta; Guelph, Ontario; Milton, Ontario; and Regina, Saskatchewan. It has display merchandising locations in Etobicoke (manufacturing), Montreal (assembly) and Toronto (assembly), as well as prepress facilities in Mississauga, Ontario, and Richmond, British Columbia. RockTenn also has a food-board plant in Montreal, QC, folding carton facilities in Candiac and Ste-Marie, QC, as well as a partitions operation in Pickering, Ontario.

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