How Will RR Donnelley’s Recent Acquisitions Affect Book Publishers?

“Von Hoffman just extends [Donnnelly] down in run length into shorter run lengths, which will encroach on any of the smaller printers,” DeWese says. “The move by Donnelley to buy something as big as Von Hoffman will really put more pressure on. You may see consolidation among lesser companies or you may see the companies’ profits begin to decline. What’s happening in a lot of the printing segments is almost a natural evolution. It’s Darwinian—the strong get stronger, and the weak disappear and die. It’s an inevitable force, almost immutable, that is leading to these specialized acquisitions. A handful of very large companies will control printing.”

Last week, two other top printers merged. Cadmus Communications was acquired by Cenveo for $430 million.

Industry analyst Steven W. Frye, owner of Frye Publication Consulting and Book Business columnist, is less apprehensive the recent deals will have an industrywide impact. Those who will encounter the most changes will be the companies being purchased and those who use their services.

“Conventional wisdom says the less vendors we have to go to the less deals we’ll get because there are less options,” he says. “But historically, no matter who owns the plants, it doesn’t seem to impact the overall marketplace. We’re paying less now than we ever did. That savings has been coming from technology.”

According to Frye, previous Donnelley mergers were initially met with an exodus of clients, many used to more “personable service from smaller printers,” but that Donnelley proved itself with successful management of the new acquisitions.

“[Donnelley] has one of the [least] customer-friendly contracts,” he says. “You have to deal with a lot of lawyers. It’s very frustrating and intimidating. What’s happening, in my opinion, is the plants in Banta and Perry Judd’s will continue to run with a new owner. How are they going to be affected by that owner? I think we’ll see a shaking out of people that don’t want to be Donnelley customers. Those who don’t panic will be in a better situation.”