How Will RR Donnelley’s Recent Acquisitions Affect Book Publishers?
Whether it’s an example of survival of the fittest for printers or merely another entry in a long line of acquisitions, RR Donnelley & Sons put the publishing industry on notice as it completed its “trilogy of transactions” this week, a course of action the industry’s top commercial printer says will help offer its customers greater capacity and flexibility.
The Chicago-based printer announced it would make an all-cash purchase of educational-book printer Von Hoffmann from Visant Corp., in a deal valued at $412.5 million, RR Donnelley officials said Wednesday.
“In concert with our fully integrated international production platform, the addition of Von Hoffmann’s facilities will offer our customers enhanced responsiveness as well as the ability to leverage our leading catalog, premedia, logistics and other production and service resources,” said John Paloian, RR Donnelley group president, publishing & retail services, in a statement.
During the past two months, Donnelley has gone on a spending spree of nearly $2 billion by also buying Menasha, Wis.-based Banta Corp. and Waterloo, Wis.-based magazine and catalog printer Perry Judd’s Holdings. All three of the deals are expected to close during the first quarter of the year.
Harris DeWese, chairman and CEO of Compass Capital Partners and longtime columnist for Book Business’ sister publication Printing Impressions, says the recent deals are a sign the pendulum may be swinging in favor of printers. Expect prices to rise throughout the printing industry in a short time, he said.
“The customers have been in charge for too long,” DeWese said. “By pitting one printer against another, they’ve gotten the price they wanted. As these bigger printers grow larger. ... you have a market, i.e. books, that’s driving toward price equilibrium.”
DeWese says other printers, especially smaller one, and those who use them for their services, will take heed of the latest Donnelley acquisition. He believes as long as “the big guys” can get by the Hart-Scott-Rodino Antitrust Improvements Act requirements, expect to see further consolidation of printers.