Wall Street is not impressed, but the Brown Printing acquisition is huge news for our industry.
“Although Wall Street mostly yawned when Quad/Graphics announced this week it is acquiring Brown Printing, the pending transaction is a big deal for many major publishers,” says the Dead Tree Edition blog. “And it provides some interesting insights into the U.S. printing and publishing industries.”
As the former rivals join forces to create a new megalithic company, Quad/Graphics continues the buying binge they started in 2010, when they bought up Worldcolor. At that time, “Brown’s business reportedly surged as the big publishers worried about being at the mercy of printing giants Quad and R.R. Donnelley.”
Now, the tables have turned, and Quad expects the bump.
“Brown helps cement Quad’s status as a leading national commercial printer, industry observers say,” according to Dead Tree Edition. And it seems like a pretty good bargain, as Quad reports they paid $100 million for Brown, with expected revenue for 2014 of $350 million.
With this deal, “Quad is second only to Chicago-based R.R. Donnelley & Sons Co., the biggest printer in North America,” according to John Schmid of the Milwaukee-Wisconsin Journal Sentinel.
What does this latest acquisition say about the state of the printing industry?
“Printing companies around the world are consolidating, as printers absorb competitors or go out of business. The proliferation of digital technologies such as e-readers and touch screens, which erode demand for ink-on-paper magazines and books, is driving change in the printing industry,” says Schmid.
But what does it mean for the publishers and catalogers that use them? Are they at Quad’s mercy with no alternatives?
“When every printer in a market has the same or similar presses and bindery lines, the ability to provide co-mailing, dropshipping, and other distribution options tends to become the chief differentiator. In fact, much of Quad’s growth in its early days came from focusing more on distribution than the competition did,” says Dead Tree Edition.
Without competition in that high run space, what will their differentiator be? We can only hope the competitive and innovative spirit doesn’t suffer from “too big” syndrome.
Comments are closed.