The Target: On Demand Everything report – May 2021 M&A activity
Print any quantity of one, available anywhere, anytime, on anything. The vision of print on demand, personalized for each unique recipient, is no longer limited to paper. Digital printing technologies have created opportunities to efficiently and cost-effectively customize and uniquely decorate the full range of products we use every day, including the clothes we wear. Printful, based in Charlotte, NC, has combined digital fabric printing with robust order fulfillment systems and white label storefront software, all designed and implemented for production and shipping to demand on behalf of brands and designers globally.
The eight-year-old company was perfectly positioned to take advantage of the surge in online orders over the past year during pandemic lockdowns. Revenues in 2020 increased 80% from the previous year and exceeded $ 200 million. New York-based private equity firm Bregal Sagemount took note and invested $ 130 million for an uncontrolled minority position in Printful. Although the exact proportion of the capital acquired was not disclosed, the founder of the company was rightly proud to announce that the investment implies that the total value of the company exceeds $ 1 billion, thus obtaining âunicornâ status for on-demand clothing and promotional items printing. business.
This is not the first investment in digital printing for the Bregal family of global investment funds. The German branch, Bregal Unternehmerkapital, acquired the commercial printing company OnlinePrinters in 2016. With a presence throughout Europe, the company mainly produces printed products on paper, ordered through several branded online websites in the countries of Europe. ‘EU. Bregal was the second institutional investor in OnlinePrinters, which was founded in 2004 and had 600 employees under the former ownership of private equity firm TA Associates. With advice and financial support from Bregal, OnlinePrinters has now more than doubled in size, with more than 1,400 employees and a fleet of nearly 200 printing units, including Heidelberg offset and HP digital presses. We expect the New York team at Bregal to envision Printful to follow a similar path, carving out a growing share of the growing market for digitally printed custom apparel.
Commercial print communications and news printing (such as newspapers) have been hit hard over the past year. The conversion to online communications accelerated out of necessity during the lockdown. Companies like Printful know that while we may not need brochures or printed newspapers in the future, almost everything else will still be printed and decorated. As we wrote several years ago, companies like EFI and others weren’t waiting and hoping paper would remain dominant; Forward-looking, printing-oriented equipment makers were aggressively buying innovative companies that had adopted digital fabric printing technologies (see Target Report: EFI Walks the Digital Fashion Runway â July 2015). The future of printing will increasingly be personalized with the images we want, delivered where we want, printed on demand when we want and applied to any product we choose.
Commercial printing and diversified services
As signaled by the return to normal in the United States, mergers and acquisitions have returned to the commercial printing segment. During the pandemic period (March 2020 to April 2021), we noted an average of 1.6 transactions per month, compared to the average of 3.4 commercial print M&A transactions per month over the four years. previous ones. If it is too early to declare that the trend in May is a return to the norm, it may be an indication that owners of commercial printing houses are back in the market, to buy or sell.
Prisma, the Phoenix, Arizona-based printing and marketing production services company, announced a duo transaction in Music City USA, with the concurrent acquisition of Parris Printing and TruColor Litho. Both companies were renamed Prisma Nashville. TruColor Litho has moved into the Parris printing plant and plans have already been announced to establish a new permanent campus in Nashville for the combined companies in early 2022.
Thysse, located in Oregon, Wisconsin, which markets itself as a design, printing, specialty graphics and manufacturing company, purchased the Badger Group located near Fort Atkinson. The acquired company brings a tradition of expertise in direct mail and commercial printing and has been integrated into the Thysse site. Effectively framing the pandemic period with bookend acquisitions, Thysse announced its latest acquisition, the purchase of large-format printing company Sign Edge, in the first week of March 2020.
All Service Graphics, a printing and courier company located on the Space Coast in Florida, was acquired by Orlando-based Superior Press. * The transaction was a reverse transaction; Superior Press had outgrown its facilities and moved its operations to the production facilities of the acquired company. Superior Press plans to continue to grow using the acquired larger, plug-and-play factory, with the added bonus of an acquired customer base. The sellers, who own the facility, will eventually step out of their operational responsibilities altogether, but will retain the real estate assets currently leased to Superior.
Heeter, a commercial printing company that has successfully grown into a full-service marketing production company with direct mail expertise, has acquired commercial printing company Duke Print & Mail. Heeter, located just outside of Pittsburgh, Pa., Announced that it will maintain the Duke brand and its operations in Cleveland, Ohio. Heeter has joined a number of other printing companies in acquiring and strategically operating satellite production facilities, in line with the trend we have seen over the past two years. This contrasts with the wave of national roll-ups of yesteryear (see The Target Report: Commercial Printing: Consolidation or Regional Expansion? November 2019).
Unlike mergers and acquisitions in the commercial printing segment, transactions in packaging continued at a constant average rate of 3.9 transactions per month during the pandemic period, exceeding the pre-pandemic average of 3. 3 transactions announced per month over the previous four years. Despite the abnormal drop in February 2021, all indications are that packaging segments, especially labels and flexible packaging, will remain hot and folding box manufacturers will receive more and more attention.
PPC Flexible Packaging, a Morgan Stanley Capital holding company, announced its second deal during the pandemic period, acquiring Target Labels & Packaging in North Salt Lake, Utah. The acquired company strengthens PPC’s presence in the western United States and produces flexo and digital printing labels, rolls and pouches for the nutraceutical, snack, confectionery and specialty consumer products markets. PPC’s other deal during the lockdown was the purchase of the Custom Poly Bag in December, one of the deals we noted as indicative of the renewed interest in making the simple bag (see The Target Report: Bags , Pouches, Trays & Bowlsâ December 2020).
Novolex has entered into an agreement to acquire Flexo Converters USA, a manufacturer of paper bags and bags headquartered in Meriden, Connecticut, with an additional plant in Monroe, Georgia. Novolex, with the financial support of the Carlyle Group, now has 55 manufacturing plants and more than 10,000 employees. The company operates its own plastic recycling centers, but noted that this latest acquisition responds to an increase in consumer demand for paper bags.
Resource Label Group, a holding company of First Atlantic Capital, and a serial acquirer of label manufacturing companies, has announced its fourth deal since the COVID-19 outbreak, bringing in Tinley Park-based Cypress Multigraphics, in Illinois, with his family. Cypress Multigraphics was founded as an industrial printing company, using letterpress to manufacture durable labels and nameplates used in product identification. The company added screen printing, flexography and digital printing and expanded to the production of roll labels. The transaction suggests another trend we noted, increased interest in US-based industrial printing capability.
* Graphic Arts Consultants, editor of The target report, served as exclusive advisers to All Service Graphics in this transaction.
View the Target report online, with transaction logs and source links for May 2021