Industry Consolidation: Not as Simple as it Looks

Cadmus was bought by Cenveo. Cenveo chased Banta, and then R.R. Donnelley outbid them. Donnelley then bought Von Hoffman. Cenveo is a product of mergers. Donnelley is becoming one as well. There’s more to come. The fact that mergers and acquisitions exist in the printing business should not be a surprise: they have been going on for decades. The 1980s had their “greying of the industry” wave, as owners sold because their grown children had careers of their own, many deciding that printing was not for them. The 1990s had a growing stock market and Wall Street analysts who saw commercial printing as a growing business (remember how the Internet was stimulating print volume and that it would never end?), filled with inefficiencies, easy money, and a great opportunity for fees for managing whatever deals they could, even if they didn’t make sense. Investment bankers don’t make money on the stocks...they make on the fees for handling the deal, especially when the companies are public. When the deal is done, they’re usually out of the picture.