North American printing giant Quad/Graphics sells its European business! What is the intention behind this?
North American printing giant Quad/Graphics recently announced that it has completed the transaction announced in October 2024, officially selling its European printing business for $42 million. The buyer of this transaction is the German private equity firm Capmont. This move marks Quad/Graphics' official exit from the European market, allowing it to focus on its core businesses in North America and Latin America. What is the purpose of this transaction? What industry trends can it reflect?01Quad/Graphics and CapmontQuad/Graphics was established in 1971 and is headquartered in Sussex, Wisconsin, USA. It is a global printing services company that offers a full range of services from traditional printing to digital marketing. Its business spans 14 countries, covering North America, Europe, and Latin America, with over 13,150 employees.In recent years, Quad/Graphics has experienced certain fluctuations and challenges in its performance. According to the financial report for the third quarter of 2024, its net sales for the first three quarters of 2024 were $2 billion, a decrease of 9% compared to the same period in 2023, mainly due to a decline in paper sales and printing volume.
Image Source: Quad/Graphics official website
Capmont is a private equity firm focused on investing in small and medium-sized enterprises in Europe. This acquisition is its first investment in the printing industry. Capmont plans to transform Quad/Graphics' European business into a regional leader in printing and integrated marketing solutions.
Image source: Capmont official website
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What is behind the transaction?In fact, Quad/Graphics has a long history of printing operations in Europe, as outlined in the timeline below:·
1998: Quad/Graphics partnered with the Polish printing company Winkowski to establish a production base in Europe.·
2008: Quad/Graphics took full control of the Polish operations and renamed its European subsidiary Quad/Graphics Europe.·
2015: Quad/Graphics acquired the point-of-sale expert Marin's International and renamed its European subsidiary Quad POS.· October
2024: Quad/Graphics announced plans to sell its European operations.· March
2025: The transaction was officially completed, and Quad/Graphics announced its exit from the European market.
Regarding this transaction, Joel Quadracci, Chairman, President, and CEO of Quad/Graphics, stated that the European business represents a relatively small portion of its overall operations. According to publicly disclosed information, the European business accounted for only 5% of Quad/Graphics' total net sales. In recent years, the European business has faced numerous challenges, including declining market demand, rising costs, and intensified industry competition. These factors have led to weak profitability in the European business, contributing limited value to the company's overall performance.
This business divestiture is aimed at better supporting Quad/Graphics' continued focus on its core strategy, optimizing its business portfolio, and achieving growth as a marketing experience service provider. In addition, Quad/Graphics plans to use the proceeds from the sale to repay debt and make other investments.Joel Quadracci emphasized, "North America is the largest business base for Quad/Graphics, and we will concentrate our resources and focus on our core markets in North America and Latin America, further enhancing our competitiveness to provide maximum value to our customers."Henrik Monte, Managing Director of Capmont, stated that Quad/Graphics is known for its excellent printing, point-of-sale, and marketing solutions. After the transaction is completed, Capmont will be committed to becoming a leader in print and integrated marketing solutions in Europe. Henrik Monte also mentioned that, thanks to a highly dedicated and experienced team, Capmont is confident in combining state-of-the-art printing equipment with outstanding creative design to provide exceptional printing solutions to its clients.
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A Microcosm of Industry TrendsThe deal between Quad/Graphics and Capmont not only reflects the strategic transformation and business adjustments of the companies but also to some extent mirrors the development trends of the industry.
1.The industry integration and differentiation are intensifying.
Quad/Graphics' exit from the European market is a continuation of the consolidation trend in the printing industry in Europe and the United States in recent years. Many large printing companies are integrating resources, reducing costs, and enhancing operational efficiency through mergers, acquisitions, and reorganizations, thereby improving their competitiveness.For example, LSC Communications (formerly RR Donnelley) had previously sold its business in Europe; TC Transcontinental plans to lay off workers at its plant in Kansas, USA, to optimize resource allocation; and the merger between International Paper and UK-based DS Smith, as well as the transaction between Smurfit Kappa Group and Westrock Company, is expected in 2024.
2.The traditional printing industry is facing transformational pressure.
With the rise of digital technology, the demand for traditional printing services has gradually declined, putting immense pressure on printing companies to transform. Many enterprises have had to respond to market changes by optimizing their business structures and offering more diversified and personalized products and services.The transaction between Quad/Graphics and Capmont is beneficial for resource integration to further advance the digital transformation strategy. In addition, in recent years, Quad/Graphics has also established a strategic partnership with Google Cloud to enhance its marketing solutions using artificial intelligence.
3.Changes in market demand
As consumer demand for personalization, customization, and quick delivery increases, the printing industry is moving towards digitalization, personalization, and customization.In response to market changes, many printing companies are actively adapting by either introducing advanced digital printing machines and automated production lines to achieve rapid production of small batches and various products to meet consumer demand for personalized products, or by utilizing data analysis to better understand consumer preferences and behaviors to provide more accurate and customized services. These measures not only help enhance the market competitiveness of enterprises but also inject new momentum into the transformation and upgrading of the printing industry.In summary, Quad/Graphics' exit from the European market is an important step in its strategic adjustment and transformation, and it also reflects the trends in industry development. From changes in the competitive landscape to accelerated industry consolidation, from supply chain adjustments to transformation pressures and opportunities, printing companies need to closely monitor market dynamics and actively adjust strategies to achieve sustainable development.