Like our previous post about 2021 M&A activity in labels and packaging, this post examines acquisitions in the commercial printing and wide-format graphics segments. Quotes from these press releases showcase the variety of circumstances and strategies for mergers and acquisitions.
Of course, the deal that grabbed most of the M&A headlines in 2021 was the Q4 bidding war that erupted for RR Donnelley (RRD), a multi-billion-dollar provider of multi-channel communications for corporate clients. That deal isn’t included in this roundup, because it hasn’t closed yet. Instead, I share my thoughts on that contentious activity on my Deal Flow Guy blog.
Here are some of the deals that affected commercial and wide-format printers in 2021.
Acquisition of Badger Group Delivers Upgrade to Thysse’s Mailing Capabilities
Thysse, of Oregon, Wisconsin, is a brand-experience provider built by three generations of visual communication specialists. To expand their range of services, Thysse acquired the Badger Group of Fort Atkinson, Wisconsin in May.
The Badger Group provides print and marketing services including targeted direct-mail campaigns with integrated digital components, marketing automation, and dashboard analytics.
Brands who use brand visuals produced by Thysse now have access to Badger’s direct mail, offset printing, and digital marketing expertise. Badger Group clients can access Thysse creative services as well as vehicle wraps, signage, large-format printing.
“Badger Group has been family owned and operated since 1975, and we’re thrilled to combine both companies’ rich history and extremely knowledgeable teams,” said Sally O’Brien, president/owner of Badger Group. “We can now offer our clients additional brand development options while continuing to deliver exceptional service.”
“Badger Group has a fantastic set of experts who will strengthen our mailing, offset, and marketing capabilities,” said Jason Thysse, president of Thysse, “We’ve long admired their business model and presence in the print industry, and couldn’t be happier to have them join our team.”
Source: Print Industry Veterans Unite Over 125 Years of Combined Expertise
Circle Graphics Completes Acquisition of Graphik Dimensions
Founded in 2000, Circle Graphics produces digital graphics for consumers, professionals, and businesses through two divisions: Online Wall Decor and Out-of-Home Visual Solutions.
Circle Graphics’ Online Wall Decor segment enables consumers and professional photographers to procure made-to-order photo and pre-designed art images via direct-to-consumer websites and reseller relationships.
The Circle Graphics Out-of-Home Visual Solutions segment is the leading large-format digital graphics provider to billboard operators. Plus, the division offers branded business signage to small and medium-sized businesses.
Graphik Dimensions, founded by the Feinsod family in 1965, is a leading provider of customized framed wall decor products.
“We are thrilled to have found a true partner in Circle,” said Geo Krieg, president of Graphik Dimensions. “We sought a strategic partner that could not only provide resources to help us scale alongside our growing customers, but also would work with us to maintain the brand we worked so hard to build and grow over the past 55 years.”
“Graphik Dimensions’ high-quality custom framed products further expands Circle’s wall decor product offerings into another highly complementary category,” commented Andrew Cousin, CEO of Circle Graphics. “The Company has a long history of category leadership and we look forward to continuing that tradition as we seek to find innovative ways to grow the combined business together.”
Circle Graphics is a platform company of H.I.G. Capital. Graphik Dimension represents the third add-on acquisition that Circle Graphics completed since H.I.G. acquired Circle Graphics in October, 2019.
“We are pleased to support Circle’s acquisition of Graphik Dimensions,” said Ryan Kaplan, Managing Director of H.I.G. Capital.” The investment further establishes Circle as a leading online wall decor provider and continues our strategy to greatly diversify Circle’s product offering. Personalized products remain a key expansion area for Circle and Graphik Dimension will help us accelerate our growth in this area.”
Source: Circle Graphics, an H.I.G. Capital Portfolio Company, Completes Acquisition of Graphik Dimensions.
Graphic Village Acquires T-Max Graphics
Graphic Village, a portfolio company of Revitalize Capital, is the largest, independent, multi-channel print solutions provider in the Greater Cincinnati region. Graphic Village provides branding, comprehensive printing services packaging, apparel decoration, direct mail and fulfillment services.
In April, Graphic Village completed the acquisition of T-Max Graphics is a graphic design and large format printing company based in Muncie, Indiana. The company specializes in producing signs, vehicle wraps, and promotional products and serves national restaurant chains such as Applebee’s, Panera Bread, and Pizza Hut.
The deal augments Graphic Village’s large format printing services, expands the company’s presence to Indiana, and broadens their reach in the restaurant industry.T-Max and its 20 employees will continue to operate out of their Muncie-based facility as a division of Graphic Village. The acquisition of T-Max Graphics is the 16th acquisition of Revitalize Capital, Graphic Village’s parent company.
Source: Graphic Village Acquires Muncie-Based T-Max Graphics
Shutterfly Acquires Spoonflower in Major Expansion
The Shutterfly family of brands is the leading online retail and manufacturing platform for photography and personalized products. Shutterfly pioneered online photo sharing more than 20 years ago. Millions of people around the world have used Shutterfly to add their photos to a wide range of personalized products, such as cards, photo books, tiles, magnets, canvas wraps, and ornaments.
In August, 2021, Shutterfly acquired Spoonflower, a global design-to-print marketplace for custom fabric, wallpaper and home decor. Spoonflower was founded more than 10 years ago to provide print-on-demand fabric. It has grown the product offering to include wallpaper and decor items such as throw pillows, tablecloths, sheet sets, and curtains. Spoonflower powers a diverse community of more than 3.3 million unique artists, creators, and businesses. On average, more than 4,000 new designs are uploaded to Spoonflower each day.
Shutterfly’s acquisition of Spoonflower increases the depth and breadth of what people can create, customize, and buy on the Shutterfly platform. The merger also connects 21 million active Shutterfly users to more than 1 million designs by independent artists in the Spoonflower global marketplace.
“At Shutterfly, we believe that anyone can be a creator. That’s why we’re expanding the aperture of what you can discover, make, or buy on our platform,” said Hillary Scheider, CEO of Shutterfly. “This strategic acquisition helps us expand our lens on creativity to include not only photo personalization but also custom designs created by independent artists.” She said the company plans to make it easier for individual creators and small businesses to access high-quality manufacturing that can grow as demand for the creator’s products grows. .
Shutterfly’s strategic vertical integration of its supply chain, manufacturing, and technology engine powers a diverse collection of high-quality products. Its world-class production sites facilities and established network of fulfillment sites provide Shutterfly with unparalleled personalization and customization capabilities at scale.
“We’re thrilled to join the Shutterfly family because we found the perfect fit for our business, products, team, and community as we work together to address the growing market opportunity,” said Michael Jones, General Manager of Spoonflower. “We are excited to offer Shutterfly customers a wider assortment of custom-designed products and to connect them with Spoonflower’s community of artists.Spoonflower’s community of artists and makers will be able to scale their businesses as a direct result of Shutterfly’s vast manufacturing capabilities and expertise.”
Spoonflower is based in the tech hub Research Triangle Park (RTP) area in Durham, North Carolina with an international office in Berlin. Spoonflower’s lead investors include Guidepost Growth Equity and Bull City Venture Partners.
Shutterfly is majority-owned by certain investment funds managed directly or indirectly by Apollo Global Management, Inc. and its subsidiaries and affiliates.
Source: Shutterfly Acquires Spoonflower in Major Expansion Beyond Photo Personalization
AlphaGraphics Kansas City Acquires Priority Printing and Marketing
Alpha Graphics Kansas City is a print-marketing firm located in the creative Crossroads Art District of Kansas City. The certified Women-Owned business specializes in helping businesses solve marketing problems, with custom digital color and large-format printing and a mix of print direct-mail and digital marketing services.
In June, AlphaGraphics acquired Priority Printing and Marketing, a Kansas City-based company that provided quality printing, promotional and creative services. Priority Printing was put for sale after the passing of its owner Linda Winter.
“I have admired Linda’s passion for printing and her clients for many years,” said Haley Haar, president of AlphaGraphics Kansas City. “She was more than a vendor, and really a friend to so many of her customers. It takes a very special person to have the loyalty and respect that Linda’s clients feel for her.”
The team at AlphaGraphics will support new customers with capabilities such as online ordering portals, variable data printing, and additional printing options. AlphaGraphics will also incorporate additional apparel and promotional product capabilities
Source: AlphaGraphics Kansas City Acquires Priority Printing and Marketing.
Phoenix Lithographing Merges with ICS Corp
Phoenix Lithographing in Philadelphia, PA (part of the Phoenix Group of Companies), merged with ICS Group to form the Phoenix-ICS Group of Companies.
Phoenix Lithographing is a full-service provider of printing, packaging, mailing, and fulfillment solutions.
ICS is a direct-mail organization that offers a complete suite of creative development and production services — from strategic planning through the creative process and into project execution. ICS manages multi-platform marketing campaigns with agency-like precision..
The combined company provides web offset, sheetfed offset, toner and inkjet digital printing, direct mail printing services along with data solutions, fulfillment, and wide-format display and package printing.
“We are truly a single-source provider for Fortune 500 companies and middle-market enterprises,” said Dean Baker, CEO of Phoenix and President of the Phoenix-ICS Group.
“This union will allow ICS corporate clients to experience the diversity that the Phoenix Group of Companies offers through our minority-owned businesses,” said vice-chairman Steve Anello. “More and more companies are looking for easy-to-use, turnkey solutions, and very few suppliers can provide the resources and certifications we can to meet their Tier 1 diversity procurement goals.” Businesses within the Phoenix-ICS Group of Companies umbrella meet several diversity classifications, including Minority-Owned Business (NMSDC), Disabled Combat Veteran-Owned Business, Woman-Owned Business (WBENC).
Source: Phoenix Lithographing & ICS Corporation Announce New Group
Landaal Packaging Systems Acquires Westcott Displays through Asset Purchase
Landaal Packaging Systems is a third-generation family-owned and operated multi-site business that offers corrugated packaging, third-party packaging, point-of-purchase displays, and design services.
In February, they completed the acquisition of Westcott Displays, one of the country’s oldest and largest manufacturers of point-of-purchase displays, corrugated boxes, folding cartons, and design services.
The Westcott Displays team continues to service their customers under the Westcott Displays name and is being integrated into the Landaal Packaging Systems service model.
“We are excited that Landaal will be servicing our valued client list,” said Westcott CEO Greg Campbell. “We have worked with them over the past 10 years, so we know from experience that they are an innovative, forward-thinking company with an emphasis on uncompromising customer service.
The acquisition of Westcott Displays is a cornerstone step in the next evolution of Landaal’s evolution of their Point-of-Purchase Display division.
“POP is one of our core businesses, and with the acquisition of Westcott Displays’ assets, Landaal is poised for even greater growth in this important segment,” said Landaal company president Robert B. Landaal.“Westcott Display customers will now have access to a wider range of value-add services, printing, and finishing capabilities to meet the ever-changing needs for nationwide and regional POP program execution.”
Source: Landaal Packaging Systems Acquires Westcott Displays through Asset Purchase
Heeter Acquired Duke Print & Mail Solutions
Heeter, based in Canonsburg, Pennsylvania, is a full-service provider of secure print, direct mail, and fulfillment solutions.
The company acquired Duke Print & Mail Solutions of Cleveland, Ohio. The combined company will offer one of the largest assortments of print and digital solutions in the Mid-Atlantic region. It is one of a select group of companies that offer HITRUST CSF certification and SOC2 Type 2 audited processes for clients who require data privacy and security safeguards.
Like Heeter, “Duke has a history of innovation and implementing the latest technologies in order to deliver high-quality products, on time every time. This high bar for both companies is a critically important factor to continue to deliver on both of our brand promises.”
Blake Leduc, president of Duke, said, “We found that our roadmap for a successful future of serving our customers looked a lot like Heeter’s. It made sense for us to join forces to serve a fast-changing marketplace.”
Duke will continue to serve customers in Ohio, operating under its own name as a division of Heeter. Duke is also expanding its use of their trademarks. customized web-based dashboard that simplifies workflow for clients.
Source: Heeter Acquires Duke Print Mail Solutions, Printing News
Other Deals
- Allegra Winston-Salem Acquires Goslen Printing
- Mittera Acquires Assets of Trend Offset Printing
- Mittera Expands West Coast Presence with Acquisition of Creel Printing
- Freedom Acquires Suncraft Technologies
- Marek Group Acquires Ecker Envelope
- Moore Acquires Worcester Envelope
Lessons Learned and Questions Raised
Reflecting on deals that closed during the past year is always useful. Every press release expresses so much optimism about the future. But from behind-the-scenes chatter, I know that these press releases often skim over the major headaches and messy conflicts that occur before a deal crosses the finish line.
As I review the M&A deals that closed in commercial and wide-format printing businesses in 2021, here are some questions I would like to ask.
How did the deal originate? Did the owner of the company agree to pay a hefty fee to a business broker to help find a buyer? Or did the seller strive to avoid these fees?
Did the seller find the buyer? Or did the buyer approach the business owner? Perhaps the owner of one business already knew the owner of another business through past connections at association events or manufacturer-hosted user groups (e.g. Dscoop, Canon Think, or EFI Connect)
How long was the business on the market? Was the owner motivated to sell because the business was financially stressed? Or was the sale prompted by a life transition, such as an illness, divorce, or death? Did the owner eventually agree to sell for a lower price than he or she initially expected?
Did the buyer insist on getting an independent third-party valuation? Maybe not, if it was a relatively small owner-to-owner deal. But the owners of portfolio businesses acquired by private-equity groups to make additional acquisitions within an industry know that private equity groups insist on using data-driven processes to evaluate potential deals.
How many M&A deals fell through in 2021? How many sellers walked away from a deal because they felt insulted by the offer? How many buyers withdrew from a deal because the owner wasn’t honest about the business?
How many of these deals will meet their goals? Roughly 70% of announced deals never meet their goals, in part because plans to integrate the two workplace cultures were overlooked during the due diligence phase of the deal-making.
Will the acquirer be able to hang on to the experienced leadership team they were hoping would stay with the company? In a period when many valued employees are already choosing to resign and pursue more independent work, a change in ownership might give the most talented people yet another reason to seek employment elsewhere.
For More Information
Growth through acquisition can be an excellent strategy for well-managed printing companies. To learn more about how to get an M&A deal started, download our white paper: Acquisition Criteria for Printing Companies.
Then, call me at 561-543-2323 with any questions and a confidential discussion about the types of companies you might be looking for.