Mergers & Acquisitions: Expanding Opportunities

Diversification, growth, and expansion were just some of the exciting terms thrown about by speakers at the Knowledge Zone at The Print Show in September. Clearly, there is a need for companies to look outside of their existing remit and move into new areas if they are to continue to succeed and grow.
One way of expanding is to merge with a company or even buy out another business. Doing this allows you to link up with new, knowledgeable staff, take ownership of specialist kit, or even acquire an additional premises – all of which will support your move into new areas.

In this article, we take a closer look at some recent merger and acquisition deals in the print sector, analyse the thinking behind them, and consider how it will benefit each business moving forward.

Manufacturing a New Future

One of the largest deals in recent months saw Epson acquire Fiery, a provider of digital front ends (DFEs) and workflow solutions. Epson is purchasing Fiery from Siris Capital Group for the small matter of $591m (£443m), with the agreement set to combine Fiery’s software, server, and workflow solutions with Epson’s range of print devices and applications.

At the time of writing, the deal is yet to officially complete, though both parties expect the acquisition to go through before the end of the year. Fiery will become part of the Epson group but retain its name and organisational structure and continue to operate from its existing offices.

According to Epson, the purchase means Fiery will be “better positioned to scale, drive innovation, and continue delivering cutting-edge solutions to its customers while maintaining its independence in areas where the company excels”.

Fiery chief executive, Toby Weiss, says: “Epson’s acquisition of Fiery showcases the uniquely important role the company plays in enabling success across the entire print industry.

“Fiery has a demonstrated track record of empowering original equipment manufacturer partners to deliver the best possible results for its customers, and it looks forward to building upon this legacy with Epson and our valued partners.”

Another manufacturer making moves in recent months is Screen, which in May added CGS ORIS of Germany to its group of companies. CGS is primarily focused on the development and sales of colour technology products, including colour management and digital proofing.

Incidentally, Screen has been working with CGS since 1991, when the two companies cooperated on the development of colour technologies for scanner and recorder systems, including the provision of original equipment manufacturer (OEM) products.

Kunio Muraji, who has led the development of various flagship products created by Screen, including its Truepress JET 520HD printing system, has taken on the role of chief operating officer at CGS.

“Going forward, the partners will work to integrate CGS’s colour technologies with the core colour management systems used in Screen’s Truepress series of digital inkjet presses and workflow products,” Screen says, adding: “This is expected to drive significant new innovations in intuitive, high-function printing technologies.

Attractive Prospect

Away from equipment manufacturers, the paper sector has also seen a number of changes, such as an acquisition by Fedrigoni. The most recent was its purchase of a majority stake in BoingTech a subsidiary of Shanghai Inlay Link and a specialist in radio frequency identification (RFID) inlays and tags.

By acquiring the stake – and holding the option to purchase remaining shares in the future – Fedrigoni says this strengthens its position in the RFID sector, allowing it to bring additional value to customers across both self-adhesives and specialty papers for luxury packaging and other creative applications.

“The world of RFID is growing rapidly and is increasingly strategic for the group,” comments Fedrigoni chief executive Marco Nespolo, who adds: “This is a further step to significantly increase our size in the RFID inlay manufacturing, as well as widen our ability to partner with our customers, alike converters, printers, and system integrators, and meet their needs.”

Just a few weeks before this news broke, it was also announced that Fedrigoni had acquired a majority stake in POLI-TAPE Group, a producer of materials for graphic applications such as textile, signage, digital printing, and specialties.

POLI-TAPE’s textile graphics business includes heat-transfer vinyls for the embellishment of textiles and other substrates, with Fedrigoni’s Nespolo saying this also further extends the reach of its product offering.

Building a Legacy

Of course, it is not only giant corporations, manufacturers, and suppliers that can benefit from M&A activity. Earlier this year, Whitstable-based, print business PressOn launched a new vehicle wrapping venture after a recent acquisition.

The company took ownership of wrapping business VSM, with PressOn managing director Andrew Wilson opting to use this as a catalyst to launch PressOn Automotive just after the turn of the year. Speaking at The Print Show in September, Wilson said that he saw this as the ideal time to capitalise on rising demand for vehicle wraps and graphics.

James Tilley, the former owner of VSM, is overseeing the new venture, which is now 100% owned by PressOn, with Wilson leading the parent company.

While still in its infancy, Wilson says he has high hopes for the new business moving forward, with plans to use PressOn’s existing relationship with leading brands such as Harrods and Harvey Nicholls to bring in new, vehicle-based work.

On top of this, ARC-UK Technologies, part of ARC Document Solutions, which provides digital printing and document-related services to more than 90,000 customers worldwide, recently revealed it is looking for new acquisition opportunities in the UK.

The aim of this, ARC-UK says, is to strengthen its geographical reach and help establish itself as a leading carbon neutral printer in the UK for digital print and document imaging.

Darren Moorhouse, head of sales for UK & Europe, says: “To continue on our upward trajectory, we are looking to expand through acquiring other businesses with shared visions and values, aligned with our aims, for what we wish to provide to our customers.”

Is an MBO Right For You?

Of course, any deal needs to be right for you and your business. Working with specialists in this area can keep you on the straight and narrow when completing deals. Close Brothers fits in this category, says Paul Philbrick, managing director of the Close Brothers Asset Finance print team, who believes management buyouts (MBOs) are a popular option in print.

“Handing over the reins of the business to people that may have been involved with in it for many years is a natural progression and allows the current management team to finally have a stake in the business,” Philbrick says, adding: “Invariably, the outgoing directors will remain involved for a period of time and this way there isn’t any friction during the changeover period.

Handing over the reins of the business to people that may have been involved with it for many years is a natural progression

“The biggest mistake is not opening conversations with a specialist finance company like Close Brothers early enough. We can offer guidance and speed of turnaround that could be pivotal to the right deal being done and help set a realistic outcome. A clear vision of the future with projections that demonstrate the business will be sustainable going forward.

“It’s important to assess and identify the steps required to complete and attributing realistic timescales to each. Then both parties can agree to a target completion date.”

It is pretty clear that acquisitions, mergers, and MBOs present businesses in print – both small and large – with exciting opportunities for long-term growth. Could this be an option for your company, too?