Mt. Royal Printing, a Baltimore, Maryland-based full-service print production company, makes two tuck-in acquisitions of Pennsylvania firms, Spectrum Printing Inc. and Shuman Heritage Printing Co. Graphic Arts Advisors (GAA), an M&A advisory and consulting firm based in New Jersey, focuses exclusively on the printing, packaging, mailing, marketing materials production, and related graphic communications industries. GAA 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 venture outside of the greater Maryland/Washington, DC/Northern Virginia market.
“Mt. Royal approached us with two distinct goals,” says 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 help Mt. Royal move into new vertical markets. “Education organizations, nonprofits, and associations comprise a large part of our customer base,” adds 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 support 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 purchase of an offset press. The Schafers decided the better answer was to transition the business to a company that had a large UV press to provide more offerings to 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,” says John, who is joining Mt. Royal and will be servicing his book of business.
“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.”
Mt. Royal’s Hare notes that GAA’s guidance on how to approach certain topics helped support ongoing and effective communications that were key in finalizing the agreement.