Mergers & Acquisitions

TC Transcontinental Inc., through its TC Media operation, finalized its approximate $75 million agreement to acquire the 74 weekly newspapers of Sun Media in Quebec, as well as their related Web properties. Transcontinental now owns all the weekly newspapers acquired from Sun Media, which is controled by Quebecor through its Quebecor Media group.

After the deal was first announced in December 2013, Canada’s Competition Bureau set a requirement for Transcontinental to put 34 of the 154 newspapers in its portfolio up for sale for a period of 60 days, including some that are part of the transaction with Sun Media.

At the time of the acquisition announcement, Francois Olivier, President and CEO of Transcontinental, stated: “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… This transaction will add approximately $20 million to TC Transcontinental's operating income before amortization.”


TC Transcontinental has more than 9,000 employees in Canada and the United States, generating revenues of $2.1 billion in 2013.

Veritiv is to be the name for a new publicly traded distribution giant once the merger between xpedx, a business of International Paper, and Unisource Worldwide, complete their merger first announced in January 2014.

The name Veritiv, according to the companies, comes from the roots of three words: Verity, Active and Connective. Common stock of the new company is expected to trade on the New York Stock Exchange under the symbol VRTV.

“Veritiv will meet and exceed our customers’ expectations by providing them with the end-to-end print, packaging, facility and logistic solutions they need to make their key business operations more efficient and more sustainable,” stated Mary Laschinger, who will serve as Veritiv’s chairman and CEO.

The company will begin operating under the name Veritiv and will introduce its new branding and logo immediately after the closing of the transaction, which is expected to occur early in the third quarter of 2014.

Upon completion of the merger, which is being facilitated through a Reverse Morris Trust structure, the new company will have projected annual revenues in the range of $9 billion to $10 billion and will have approximately 9,500 employees across more than 170 distribution centers in North America. The combination is expected to generate approximately $150 million to $225 million in annual net synergies.

Konica Minolta Business Solutions moves deeper into enterprise content management (ECM) with the purchase of AMS Imaging located in Rhode Island.

This is the second ECM company acquired by Konica Minolta, after its January 2013 purchase of DocuSource. “The acquisition of AMS Imaging expands Konica Minolta’s existing ECM practice with the addition of highly skilled solutions analysts, solutions engineers and imaging staff with extensive industry knowledge and expertise to support our customers,” stated Sam Errigo, SVP, Business Intelligence Services, Konica Minolta Business Solutions U.S.A.

AMS Imaging was established in 1971, and provides what the company describes as end-to-end ECM solutions including consulting services, software, digital scanning equipment, and production scanning services.

“We are excited to combine AMS Imaging’s extensive sales and support capabilities with the breadth of Konica Minolta’s offerings,” stated James McKenney, CEO AMS Imaging. “With this move, our newly combined teams will be able to leverage shared and proven best practices and resources to expand our ECM business while providing the highest levels of support for our customers.”

Goldman Sachs Merchant Banking Division has partnered with Koch Equity Development LLC, a subsidiary of Koch Industries Inc., to acquire shares representing 100% of Flint Group’s share capital, which is currently in the form of funds controlled by private equity firm CVC Capital Partners.

Koch Equity Development has agreed to invest with Goldman Sachs in a newly formed entity that will acquire Flint Group. “The management team of Flint Group is excited about this planned new ownership, and the opportunities this now presents,” stated Antoine Fady, CEO of Flint Group. “The investment by Goldman Sachs Merchant Banking and Koch is a clear vote of confidence in our vision, strategic plans, and can-do culture.”

Flint Group, a global supplier of inks and other print consumables such as flexographic printing plates, blankets, image transfer products and chemicals for press rooms, is described as the number one or number two supplier in most of the market segments it serves. Flint Group operates 137 sites in 40 countries and employs some 6,600 people.

“We believe Flint Group is uniquely positioned to capture growth in its attractive printed packaging markets while at the same time continuing to benefit from strong and resilient performance of its print media business,” stated Matthias Hieber, Head of Corporate Equity Investing in the German Speaking Region of Goldman Sachs Merchant Banking Division. “With a significantly improved capital structure, Flint Group is best positioned to pursue its ambitious growth plans to further strengthen its market leading positions.”

This sale remains subject to customary closing conditions and should be completed by the second half of 2014.

Quad/Graphics Inc., one of the largest printing companies in North America, signed an agreement to acquire Brown Printing for approximately $100 million.

Brown Printing, with three manufacturing facilities in Waseca (MN), Woodstock (IL), and East Greenville (PA), primarily provides printing and distribution services for publishers and catalogers. Brown Printing is wholly owned by Gruner + Jahr of Hamburg, Germany, a member of the Bertelsmann Media Worldwide family of companies, which also owns RTL Group, Random House and Arvato.

The transaction is subject to customary regulatory clearances and is expected to close in the second half of 2014. Both Quad/Graphics’ board of directors and Brown’s parent company Gruner + Jahr and its shareholders have approved the transaction.

“This acquisition will enhance the many ways we help publishers and marketers drive top-line revenues while better controlling their overall total cost of production and distribution,” stated Joel Quadracci, Quad/Graphics Chairman, President & CEO. “With print as our foundation, we will continue to find innovative ways to connect and integrate print with other media channels to increase reach, response and return on investment.”

Brown expects to generate approximately $350 million in revenues during fiscal year 2014.

Matthews International Corporation signed a definitive agreement to acquire Schawk Inc., which describes itself as a global brand development, activation and deployment company.

Under the terms of the transaction, SGK stockholders will receive $11.80 cash and 0.20582 shares of Matthews’ common stock for each Schawk (SGK) share held. Based on the closing price of Matthews’ stock on March 14, 2014, the transaction represents a price of $20.00 for each SGK share and a total value of approximately $577 million.

The transaction is expected to close in the quarter ending September 30, 2014, subject to approval by the shareholders of SGK, the receipt of regulatory approvals, and other customary closing conditions.

Members of the Schawk family and various Schawk family trusts, who collectively own
Approximately 61 percent of the common SGK stock, have agreed to vote in favour of the merger.

Matthews International traces its roots back to 1850 when John Matthews began to sell identification products and services. Today, Matthews International is comprised of two business groups, Memorialization and Brand Solutions, and generates approximately US$900 million in revenues. Led by Joseph C. Bartolacci, President and CEO, the company employs around 5,700 people in more than 20 countries on four continents.

Over its 2013 financial year, Schawk, with approximately 3,600 employees in over 20 countries, including a major facility in Mississauga, Ontario, reported sales of US$443 million. The company was founded in 1953 by Clarence Schawk.

UPDATED MARCH 4: Cober Evolving Solutions, recognized as one of Canada’s most dynamic printing and media-production companies, has acquired Kempenfelt Group and Kempenfelt Wideformat, which resides in a nearby city and is also well-known for product innovation.



“We are thrilled to welcome the skills and services of the Kempenfelt Group to our team,” stated Peter Cober, President of Cober Evolving Solutions. “They have very similar team cultures and pride when it comes to innovation, just like us. Over the past 40 years, the Kempenfelt team has built a great company and a great reputation and we are very proud to have them join the Cober team – a wonderful addition to the expanded geography of services which we are now able to offer.”

In speaking with PrintAction yesterday about the purchase, Peter Cober noted, that while this was an asset purchase, there are no immediate plans for dramatic change at Kempenfelt in terms of equipment, personnel or location. Kempenfelt, however, will take on the Cober Evolving Solutions name, which is well known in the region.

“We are committed to make it work up there. We are not going to close it down and we are not moving it back to Kitchener,” says Cober. “We do well in the Kitchener-Waterloo region and we need to expand our offering to larger geographical areas and this is a start toward doing that.”

Kempenfelt Group of Barrie, Ontario, had been running a couple of 40-inch Heidelberg sheetfed presses (seven-colour and six-colour machines) in addition to a couple of Xerox iGen3 toner presses and Agfa large-format inkjet technology. Cober Evolving Solutions of nearby Kitchener, Ontario, is also rooted in 40-inch Heidelberg presses, but with an emphasis on perfecting, including a couple of 10-colour perfectors and a 5-colour perfector, among other sheetfed offset presses. Cober was also an early adopter of HP Indigo technology, running several such presses for more than a decade.


“They have iGens, we have Indigos, so it is too early to tell where we are headed equipment-wise until we get deeper into the analysis of the mix,” says Cober, who also notes both companies have been diving deeper into large-format inkjet production over the past couple of years, albeit with two different approaches.

In addition to its large HP flatbed inkjet device, Cober recently installed a Kongsberg cutting system and a new 10 ½-foot roll-fed HP inkjet system a little more than six months ago. “We bought the [large-format-inkjet] equipment, moved some internal people around, and relied on our suppliers to help educate us and bring us along,” says Cober. “It has gone well. In terms of sales dollars, we probably do a similar amount to what [Kempenfelt’s] separate company does.”



Taking another route into large-format inkjet production, Kempenfelt in early 2013 purchased a majority interest of a local signage company in Barrie, called JD Print and Display. Kempenfelt then installed a new Agfa :Jeti 3020 Titan UV inkjet system, which Cober notes as being a much faster production system than the larger format HP machines in Kitchener.

“They also have some expertise up there that we lack with regards to fabricating and installation, and they have a screen press there,” says Cober. “They have some different [equipment], but probably the biggest advantage is the knowledge base.”


Chris Peacock, who was President of Kempenfelt Group, will continue to manage the Cober operation in Barrie. In a statement about the purchase, he said, “We truly are excited for this new phase… Cober has taken the lead on becoming an innovative, all encompassing communications provider in Canada. With Cober's incredible resources at hand, this new venture gives our clients the ability to be able to do so much more.”

Cober Evolving Solutions, for example, has been at the forefront of developing Web portals to drive work onto its offset and digital (toner) presses, which currently amounts to about 90 percent of the job traffic reaching Cober's HP Indigo machines. In late-summer 2013, Cober Evolving Solutions became the first operation in Canada to install HP’s new B2-size Indigo 10000 press, which Peter Cober indicates has not yet been fully applied to the company's Web portal workflow.

Cober Evolving Solutions is a fourth-generation printing company founded in 1916. In 2012, the company, employing over 120 people, expanded into an 86,000-square-foot facility. In January 2014, Cober Evolving Solutions also purchased CuteGecko Inc., a design agency based Kitchener, with significant expertise in social media.

Vistaprint N.V. has reached an agreement to acquire People & Print Group B.V., based in Deventer, the Netherlands, which is described as an online provider of a range of marketing products (primarily printing) and services to micro businesses and households.

People & Print Group is actually comprised of several online printing sites primarily focused in the Dutch and Belgian markets, including what is described as its best-known site, Drukwerkdeal.nl. The company states its customers consist of local printers, design agencies and resellers, as well as small businesses.

Clients have the ability to create and upload graphic design files (as opposed to Vistaprint’s customers, who typically use online graphic templates). People & Print Group states it is also differentiated by its attention on “personalized customer service levels.”



People & Print Group operates in the Netherlands and Belgium, with approximately 175 employees. Vistaprint is a global template-driven printing operation with a main production facility located in Windsor, Ontario.

“We are excited to welcome the People & Print Group team into the Vistaprint family,” stated Robert Keane, President and CEO of Vistaprint. “People & Print Group has built a model that focuses primarily on small businesses, but through a higher-touch approach that addresses customers with more sophisticated marketing and design needs. The small business market is large and fragmented. Different customer segments have varied needs, and we view the addition of People & Print Group to our portfolio of companies as a way for Vistaprint to enhance its ability to serve customers outside of Vistaprint’s target customers.”

Vistaprint currently plans to continue on with the People & Print Group brands as an independent set of brands, noting it will be a “multiyear period” before the products are fully integrated. The transaction is expected to close during Vistaprint's fourth fiscal quarter of 2014.

International Paper today announced its distribution businesses xpedx and Unisource Worldwide Inc. will merge, under the terms of a definitive agreement, that is to result in the creation of a new publicly traded company.


The agreements were signed by International Paper, parent company of xpedx, and by UWW Holdings LLC, the holding company that owns Unisource and is owned by an affiliate of Bain Capital and by Georgia-Pacific, as well as certain of their affiliates.


Following the merger, approximately 51 percent of the shares of the new public company will be owned by International Paper shareholders, with the remaining approximately 49 percent of shares held by UWW Holdings.


If and when the merger is completed, expected by mid-2014 subject to certain closing conditions, the new company will have projected annual revenue in the range of US$9 billion to US$10 billion, and will have around 9,500 employees across more than 170 distribution centres in North America.

“This transaction provides excellent value for International Paper shareholders and is a unique opportunity for xpedx and Unisource to create a new company that is stronger, more competitive and able to provide even greater value to customers,” stated John Faraci, Chairman and CEO of International Paper. "We anticipate the new company will generate synergies of about $200 million.”

The xpedx and Unisource merger is to be done through what is called a Reverse Morris Trust structure, which means International Paper will indirectly contribute the assets of xpedx to a newly formed wholly owned subsidiary, xpedx Holding Company. In exchange, International Paper will receive stock of the subsidiary, as well as a cash payment of approximately US$400 million that is expected to be financed with new debt in the new company's capital structure, as well as the potential for an additional cash payment pursuant to an earn-out provision. 


International Paper will distribute shares of the new company to International Paper shareholders on a pro rata basis. Following the spinoff of the new company to International Paper shareholders, Unisource will immediately merge with and into the new company.

The new company's executive offices will be located in the greater Atlanta area, while retaining two existing operational headquarters of the legacy companies in Loveland, Ohio, and Norcross, Georgia.

Mary Laschinger is to be CEO of the new company and Chairman of its board of directors. Allan Dragone, currently president and CEO, Unisource Worldwide, will serve as a director of the new company and will advise on integration activities.


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.”

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