In today’s highly competitive and fast paced buyout market, Huron Capital Partners LLC did not waste any time adding on to its recently purchased portfolio company, Printegra Corp.
Printegra bought National Imprint Corp. (NIC), a division of the Deer Park, N.Y.-based Commercial Envelope Manufacturing Co. Inc. that boasts more than $20 million in revenue. The involved parties did not disclose the value of the transaction, but Huron confirmed that the purchase price was in the $10 million to $20 million range. The debt portion was 3.5x senior and the balance was equity.
A manufacturer of short-run print documents, Printegra’s product line includes custom and software compatible checks and forms, pressure seal mailers, integrated form cards and labels, custom flexographic labels and print shop products. The acquisition of imprinter NIC will add custom envelopes and other stationary products to that repertoire. Both Printegra and NIC sell their products through distributors.
According to John Higgins, a partner at Huron Capital and the director of Printegra Corp., the prospect of expanding Printegra’s product line and national scope motivated the purchase.
“When we made our initial investment in Printegra, we set out on a strategy to build the business through a number of different initiatives, one of which was expanding our geographic footprint,” Higgins said. “The second is expanding our product lines and the NIC acquisition really is aimed at expanding our business into new product lines- specifically product lines that have favorable growth characteristics.”
Printegra, which operates 10 plants of its own, will continue to operate NIC’s plants while working to develop the company. “Printegra has three plants west of the Mississippi and so we are hopeful that that will give us some good cross selling opportunities, to sell NIC products to Printegra’s customer base,” he said.
Printegra does not plan on making any changes to the plant level management team or employee base, but the people who oversaw NIC at the Commercial Envelope level will not be retained.
This recent add-on will most likely not be the last for Printegra. “We just made our first investment in Printegra in December 2004, so it’s very new,” Higgins said. “We plan to continue building the business both organically as well as through acquisition.”
While Higgins said that Printegra’s management team does not have any other companies in their sights at this time, they hope those opportunities arise, and he did not rule out the possibility of acquiring NIC’s competitors. NIC’s competition includes companies like Wisco Trade Envelope and Ennis Tag and Label.
The NIC acquisition should boost Printegra’s revenue to over $90 million-a figure Higgins expects to continue to escalate. “We’re hopeful that we can build Printegra to be $150 to $200 million of annual revenue over five years and we’ll consider our exit then,” he said.
Wachovia Bank provided the debt financing for the transaction and Honigman, Miller, Schwartz & Cohn, a law firm based out of Detroit, MI., served as the buyer’s legal counsel.
The Open Approach, a Westmont, Ill.-based firm that provides consulting, mergers-and-acquisitions and recruiting services to printing firms, advised the seller.
The equity for the NIC purchase was funneled into Printegra from Huron Fund I, which was raised in 2000 and is fully invested with the exception of some capital reserves to support portfolio companies, Higgins said.
The investment marks Huron’s seventh in the past 12 months, bringing its total level of commitments up to $75 million. The firm will continue to actively invest its latest fund-Huron Fund II-which is valued at $185 million. So far, Huron has only invested $40 to $50 million in equity from that fund.
Huron is currently interested in a number of sectors including specialty chemicals, education, foods, building projects, publishing and general niche industrial manufacturing. Despite these varied interests, Higgins doubts Huron will be able to maintain the rate of investment it has sustained over the past year.
“It’s hard to imagine that the pace of investments over the next 12 months will be what it was in the last 12, but we are absolutely committed to the market and we are committed to making new investments so we’re spending a lot of time looking into new opportunities.”