The Target Report: The Box is Back—January 2023 M&A Activity

It was a simple box. It was inevitable. The market for box manufacturing has heated up and in the most recent month the purchase of box printing companies has outpaced the number of deals involving label printing companies for the first time in our eleven?plus years of tracking and commenting on M&A activity in the printing, packaging, and related industries. (See Label Roll-Ups are Red Hot; Are Folding Cartons Next? – March 2022.)

Rigid Box

A set-up box is the original, fiber-based, box. These boxes, as the name implies, are made by wrapping and glueing stiff cardboard around rigid cardboard. They can be shipped ready-to-pack and packed in a box. Although it’s difficult to trace the origin of this rigid box, there are several references that point to a German firm who produced the box in 1817. The Game of BesiegingAn early war strategy boardgame. An alternate history credits the creation of the first commercial paperboard box to an English firm, M. Treverton & Son, curiously asserting that production began in the same year as the German claim, 1817. For almost 100 years, the rigid box was dominant as the fiber-based container. Around 1900 saw the development of better methods for box production. The rigid box became less popular as a volume-utilitarian option. Today, rigid boxes are used most commonly to pack luxury or specialty items. They can be decorated with foils and coated with gloss or soft-touch finishes.

Corrugated box 

The tall top hat was the fashion trend for 1856. Edward G. Healy (Hater trade) and Edward E. Allen (Hater trade), set out to create a material which would fit the individual noggins while maintaining the height. Their solution was to fold paper in pleats. This gave it strength and wavy texture. Although they patented their invention in England, the idea was never used to make a shipping container. American ingenuity was behind the next step forward in the form of a US patent filed in 1871 by Albert L. Lyons for “an improvement in paper for packing” which described the use of corrugated, crimped, or bossed forming of paper to create an effective cushion for the contents being packed. A machine could be made to produce large amounts of corrugated materials three years later. Oliver Long was another inventor who added the liner sheets on the second side. This trapped the corrugation and created the corrugated paper we now know. The first US corrugated box, which replaced the wooden boxes and crates used for shipping products, was produced in 1895.

The Folding Carton

Robert Gair, an immigrant from Scotland who was born in Brooklyn, worked at his Brooklyn printing business on small seed bags. Gair claimed that the diemaker who worked for him did not properly set his creasing rule, and the blade was too high. This miscreant saw the error and cut thousands of seeds packets. Gair was able to cut and fold paper simultaneously. This may sound obvious, but at that time scoring was done using a presse and cutting on a guillotine. Gair was able to apply his entrepreneurial insight to heavy paperboard. This led to an exponential rise in productivity. It was easier to make the new product and it could also be packed flat for shipping. The final assembly and construction of the box took place at the factory. Once the product was assembled, it was placed into the box. Early converts to the new mass-produced foldable cartons included the Great Atlantic & Pacific Tea Company, Colgate, Ponds, and tobacco manufacturer P. Lorillard. Gair received a two-million order in 1896 for his precut and pre-creased cardboard boxes. These were to be used for Uneeda Biscuits, a Nabisco company. It quickly replaced traditional wooden cracker or tin boxes with the folding carton. Eventually further popularized by Kellogg’s for the sale of cereals to the masses, the folding carton had arrived. Gair was a great success and built seven factories in Brooklyn’s Dumbo area. His name is still visible on many of the factory facades.

You will find boxes of all kinds 

Italian packaging printing company Pusterla 1880 produces high-end packaging for luxury brands in the fragrance, cosmetics, wine & spirits, and gourmet food markets. The company, which has factories in Italy and the UK as well as molds, Moldova, Tunisia, is now entering the US market through the acquisition of two rigid-box packaging manufacturers. Pusterla has announced that it acquired Taylor Box Company in Warren, Rhode Island and Burt Rigid Box, Oneonta. 

SupremeX, a publicly traded Canadian company, started in the envelope business. It has now expanded its footprint into box manufacturing with the purchase of Impression Paragraph. Impression Paragraph is a Quebec-based folding carton printing company and manufacturer. The acquired company produces point-of sale displays for cosmetic, pharmaceutical and food confectionary markets. The acquisition marks Supremex’s fifth move into the folding carton business, following the 2021 acquisition of Vista Graphic Communications in Indianapolis, Indiana,* both acquisitions examples of the company’s laser-focused execution of its strategic diversification plan to acquire packaging companies and supplement its legacy core envelope business. Supremex has recently acquired Royal Envelope, which is a business with two facilities in Chicago. This acquisition will allow Supremex to focus on high-end envelopes that are highly decorated for direct mail.

Oliver Packaging acquired Tap Packaging + Design as its first business under new Tenex Capital sponsorship. Oliver Packaging acquired Tap Packaging + Design, a company that produces folding cartons. The acquisition is a slight departure from the core business of folding cartons. Tenex Capital acquired Oliver from Pfingsten Partners, in what PE professionals call a secondary purchase. Pfingsten bought Oliver in 2016 from Pfingsten Partners. Oliver was previously privately owned and operated in the Cleveland region by the Oliver families. Oliver Printing had been known as before. It was primarily a commercial printer and has now become a folding carton maker. Pfingsten was the original institutional owner of Oliver Printing. He rebranded the company, and added four more acquisitions that have made Oliver a major player in the folding-cart segment. Among those acquisitions was the renowned Disc Graphics, Long Island, New York. This is where Oliver Packaging now resides. 

GPA Global has announced that it acquired the Cosfibel Group, which is based in Paris, France. The acquired company has factories in Spain and Belgium and specializes in serving prestigious high-end brands with rigid box sets, gift packs, secondary packaging and product presentations in the beauty, wine & spirits, gourmet foods, and high fashion markets. Consistent with GPA Global’s strategy of combining in-house manufacturing with outsourced specialty purchasing, Cosfibel touts its “make & trade” approach to fulfilling its customers’ packaging requirements. (See GPA Global Emerges as Packaging Consolidator – December 2021.)

S. Walter Packaging Group has acquired Pulver Packaging. Pulver Packaging is an Elk Grove, Illinois-based folding carton manufacturer. Pulver will bring design, sourcing printing, fabrication enhancement, warehousing and inventory management capabilities to the new company. The S. Walter Packaging Group includes a specialty division, Bags & Bows, which serves the retail market with bags, stock size boxes, tissue paper, gift wrap, and as the name suggests, ribbons and bows. LPI, formerly known as Letterhead Press provides highly skilled finishing services such as stamping holographic images and foil stamping.

Welch Packaging Group, the roll-up that has focused exclusively on corrugated products, is back in acquisition mode after a two-and-a-half-year pause in M&A activity. Welch recently announced that it had purchased Knoxville Box and Container. The acquired company’s product line, corrugated cartons, is consistent with every company that Welch has acquired in the 37 years since the owner established the company with only four employees and rudimentary box-making equipment. Welch Packaging is now serving the Midwest and South-Central markets from more than a dozen manufacturing sites and three distribution centres with over 1,200 employees. (See Catching the Wave in Corrugated Cartons – February 2020).

* Graphic Arts Advisors, publisher of The Target ReportVista Graphic Communications’ exclusive advisors in this transaction was.

Online view of The Target Report, including deal logs for January 2023 and links to source sources

www.graphicartsadvisors.com