Cadmus Gobbles Up Mack Printing Group

EASTON, PA—Richmond, VA-based Cadmus Communications has acquired The Mack Printing Group, based here, and its subsidiaries. Mack is a $165 million producer of journals, magazines and periodicals. The purchase price was approximately $200 million in cash, seller-provided subordinated debt and Cadmus common stock.

Cadmus officials say this acquisition continues its strategy of creating leadership positions in select, niche markets. The addition of Mack increases Cadmus' annual revenues by more than 40 percent and solidifies its position as the world's leading producer of scientific, technical and medical (STM) journals.

The acquisition brings to Cadmus new capabilities to better serve the fast-growing "short-run" segment of the STM market, and strengthens Cadmus' magazine business by adding new production and distribution capabilities.

C. Stephenson Gillispie Jr., Cadmus' chairman, president and CEO, notes, "This acquisition is a giant step forward both operationally and financially. Cadmus is now one of North America's five largest periodical printers. With our increased size, we will capture operating benefits from enhanced synergies and economies of scale. Financially, we are strengthening Cadmus by adding a business with a solid track record of consistent growth, double-digit operating margins and strong cash flows. We will increase cash flow per share, significantly expand our operating margins and, coupled with other recent organizational changes, further stabilize the earnings performance of our business. We are excited about the short- and long-term opportunities this acquisition creates."

Joseph J. Ward, executive vice president of Cadmus' Professional Communications sector, adds, "Mack's strengths in 'short-run' printing and directory production add vital, new competencies to our Professional Communications sector. Coupled with our recently announced acquisition of Dynamic Diagrams—a Web-based architecture firm—we can now provide an unmatched spectrum of end-to-end solutions to our customers."

Commenting on the transaction, Paul Mack, Mack's chairman, states, "We are delighted to be joining forces with a market leader that has a well-established reputation for offering world-class, digital solutions to journal and specialty magazine publishers. Cadmus has an outstanding track record of acquiring and integrating periodical production companies. As a part of Cadmus, we will be able to deliver a broader range of integrated, professional communications services to our existing customers."

Initially, Mack Printing will operate under the name CadmusMack and will remain headquartered in Easton, PA, with manufacturing facilities located there, in Ephrata, PA, East Stroudsburg, PA, and Baltimore. Mack will operate under Cadmus' Professional Communications sector, headed by Ward. Mack's current management team, including Mark Ploucha, executive vice president of operations, and Steve Smith, executive vice president of finance and administration, will remain with the company in their current capacities.

Cadmus also announced that N.R. Puri, the former majority owner of The Mack Printing Group, has joined Cadmus' board of directors. Puri's business interests include investments in U.S., UK, German, Chinese and Hungarian companies, which collectively employ more than 5,000 people.

"We are very fortunate that Nat has agreed to join our board," says Gillispie. "His well-rounded, international expertise in a wide range of fields will be a great asset to Cadmus."