Tuck-ins represent Mt. Royal’s first expansion outside of the greater Maryland / Washington, DC / Northern Virginia market.
Mt. Royal Printing, Baltimore, MD-based full-service print production company, has made tuck-in acquisitions of two Pennsylvania firms, Spectrum Printing, Inc., East Petersburg, and Shuman Heritage Printing Co., LLC, York. Graphic Arts Advisors, LLC (GAA), Mountain Lakes, NJ, an M&A advisory and consulting firm focused exclusively on the printing, packaging, mailing, marketing materials production, and related graphic communications industries, represented Mt. Royal in the transactions.
Spectrum and Shuman represent the latest strategic transactions by the fourth-generation, family-owned Mt. Royal, which has used acquisition as a growth strategy for the past 15 years. The acquisitions represent Mt. Royal’s first foray outside of the greater Maryland / Washington, DC / Northern Virginia market.
“Mt. Royal approached us with two distinct goals,” said Mark Hahn, GAA Senior Managing Director Mark Hahn, who identified Spectrum and Shuman as worthwhile candidates for acquisition by Mount Royal. “Mt. Royal sought to add an additional facility for expanded fulfillment and other services and to take on additional business for its offset and digital printing operation at its highly efficient Baltimore plant. By incorporating the books of business of both Spectrum Printing and Shuman Heritage Printing and retaining Spectrum’s East Petersburg plant for fulfillment, these transactions fulfilled both goals.”
The tuck-ins also helped Mt. Royal move into new vertical markets. “Education organizations, nonprofits, and associations comprise a large part of our customer base,” said Liz Hare, daughter of company owner and president Gary Cayce. Cayce serves as the firm’s chief strategist, while Hare oversees day-to-day operations. “The COVID-19 pandemic hit these market segments hard, resulting in a drop in sales volume for us,” Hare recalls “Spectrum and Shuman Heritage serve different industries, including corporate and food service, which adds new markets to our revenue stream.”
The transactions also supported the objectives of Spectrum and Shuman Heritage, both owned by John Schafer and his father, Nick Schafer. Remaining competitive would have required the owners to make a significant capital outlay for the next-generation offset press. The Schafers decided a better route would be to transition the business to a company that had a modern 8-color, 40-in. perfecting UV press so they could provide more offerings for their customers. “Mt. Royal was in a good position to not only efficiently produce the work that we currently provide our customers but to also offer more options, such as wide-format and digital printing,” said John Schafer, who is joining Mt. Royal and will be servicing his book of business.
Mutual trust is a key component of any successful M&A transaction. In this case, “the principals developed a strong sense of trust and chemistry in the courtship stage through in-person meetings and by sending work to each other,” notes John Hyde, Esq., GAA Managing Director, Special Situations, who came up with the last-minute creative M&A structure that got the parties to agree on the details of the transaction “Mutual trust had already kicked in, making the parties more receptive to closing the deal in the face of impediments that could have derailed the closing.”
“GAA leveraged its expertise in M&A to provide us with good advice and recommendations, helping steer all parties involved to a fair and equitable agreement,” said John Schafer.
Mt. Royal’s Liz Hare noted that GAA’s guidance on how to approach certain topics helped support ongoing and effective communications that were key in finalizing the agreement.
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