Envelope and Direct Mail
Sector Update
Winter 2022
Arial 20 font
1
Envelope and Direct Mail Sector Insights
Source: IBIS World
Digital advertising…a friend, foe, or ally?
• Direct mail has historically been less expensive when compared with traditional advertising such as TV, radio, and magazines, but
digital advertising poses both a threat and an opportunity to businesses in the envelope and direct mail sector
• As digital advertising has increased, and direct mail has moderately decreased, many wonder if the direct mail segment will eventually
phase out. However, the segments can coexist and direct mail will not be phased out
• As direct mail technology has improved, and as digital advertising has increased, we have observed that direct mail remains relevant
• Due to the limited capacity of clients' mailboxes, they are more likely to notice physical direct mail, whereas digital advertising can fall
through the cracks. Furthermore, direct mail requires simpler market research, can be sent to locations that meet specific geographic
requirements or criteria, and has expected technological increases that will innovate service offerings
Focus on sustainability
• Sustainability is a driving and ever-growing focus in business, and the envelope and direct mail (DM) sectors should work on
incorporating sustainability efforts into their business
• This can be achieved by focusing on using sustainable materials, such as sustainably sourced and FSC approved paper stock,
reducing quantities and using less materials, and focusing on the environmental impact while displaying transparency in the process
• Another possibility is the purchase of carbon credits or funding of projects that would be beneficial to the environment
Increased focus on personalization
• Personalization in direct marketing has always been an important piece of the puzzle, but this is becoming ever more important and, in
some ways, a necessity
• Generalized campaigns and marketing that go to large audiences can work and many companies utilize this tactic, but personalized
pieces, although more expensive upfront, can result in better long-term success
• How do you implement personalization in your approach? You must know and understand your customer and their wants and needs
Technology increases product offerings and services
• Technological advances are continuing in the industry and some of the recent and relevant trends are the adoption of quick response
(QR) codes, direct mail triggers, and voice activated call to action technologies
• Direct mail triggering automatically sends targeted direct mail advertisement when consumers trigger a certain event, which can be
leaving an item in their cart, sending a reminder about a seasonal product offering, or loyalty program reminders
Arial 20 font
2
Source: Company website and Company press releases
▪ CenterGate Capital closed the acquisition of United Envelope, one of the largest manufacturing and printing companies in North
America, in July 2022
▪ The transaction is said to provide resources and capabilities necessary to continue United Envelope’s growth, expand its capabilities
and maintain its focus on serving its customers
Transaction Overview
Austin, TX Ridgefield, NJ
Acquired
Case Study: United Envelope Acquired by CenterGate Capital
▪ CenterGate Capital is based out of Austin, Texas, and is a
private equity firm that focuses on partnering with lower
middle market companies with the potential to achieve
transformational growth through operational and strategic
development
▪ The Company has over $735M in assets under management,
and target platform companies in the $5M to $30M EBITDA
range that focus on the business services, manufacturing, and
consumer sectors
About CenterGate Capital
▪ Established in 1932 and headquartered in Ridgefield, New
Jersey, United Envelope specializes in the manufacturing and
printing of envelopes for its blue-chip customer base
▪ United Envelope operates out of three state-of-the-art
manufacturing facilities in New Jersey, Pennsylvania, and
Ohio
▪ United Envelope manufactures and prints billions of
envelopes annually for a broad base of customers across a
variety of end markets, including financial services, non-
profits, healthcare, and governments
About United Envelope
Arial 20 font
▪ Founded in 1971, Convertagraphics is
a division of Double Envelope that
specializes in high-volume, web-
converted products such as bind-in
order forms, airline ticket jackets,
brochures, newspaper inserts and
personalized direct mail products
▪ Convertagraphics shares a
manufacturing facility with Double
Envelope in Roanoke, Virginia
Founded in 1999 as BSC Enterprises, the Company was established to acquire the assets of medical imaging products
company Techno-Aide from National Service Industries
3
BSC Ventures manufactures and supplies custom and web offset printing envelopes, bind-in order forms, mailers, and
specialty packaging products
Case Study: BSC Ventures
3
Source: Company website and Company press releases
BSC Ventures acquired Champion Printing in 2006, Oles Envelope Corporation in 2010, Wolf Envelope Corporation in 2010,
and Florida Envelope Company in 2013
1
2
The owners of BSC Enterprises formed a holding company, BSC Ventures, to acquire Double Envelope, Convertagraphics,
and Diversified Assembly. They later sold Techno-Aide and Diversified Assembly
▪ Founded in 1917, Double Envelope
specializes in manufacturing
commercial, custom printed, specialty
envelopes, photo bags, and print
wallets
▪ They service the direct mail, photo-
finishing, and financial services end-
markets amongst others
Double Envelope
[name]
▪ With almost 50 years of direct mail
experience, Champion Printing is a
commercial direct mail printer that
specialized in direct response
products, including bind-in and blow-in
order form response envelopes, one-
way and two-way self-mailers,
remittance envelopes, single
postcards, and double postcards
[name]
Convertagraphics Champion Printing
Arial 20 font
Case Study: Moore DM Group
October 2015
Moore acquired Southwest
Holding Corporation and
subsidiaries
4
Source: Capital IQ, Company websites and Company press releases
May 2016
Moore acquired
Redfield & Co.
February 2021
Moore acquired
Worcester Envelope
Company
October 2021
Moore acquired Thompson
Habib Denison (THD)
1
2
5
Moore DM Group announced the acquisition of Southwest Holding Corporation and its two subsidiaries, Southwest
Publishing and Mailing and Southwest Caging. Southwest Holding offers direct mail printing, data, personalization and mailing
services to non-profit clients.
1
Moore acquired Redfield & Co., a provider of custom printed products. The firm provides promotional mail, automated forms,
commercial printing, and pressure-sensitive labels.
2
Timeline of Moore DM Group’s Acquisitions
About Moore DM Group
▪ Founded in 2011 and based out
of Tulsa, Oklahoma, Moore DM
Group provides marketing
solutions including direct mail
and digital mail services, list
services, media services, public
relations primarily for the non-
profit sector
▪ Moore has over 4,000 employees
in 42+ locations
6
Moore DM Group’s Acquisitions
December 2021
Moore acquired
Tri-State Envelope
7
March 2020
Moore invested
$31M in Richmond
Print Group
3
January 2021
Moore acquired
Amergent
4
Moore created the Richmond Print Group and invested $31M to create a printing and envelope production facility.
3
Moore acquired Amergent, a direct marketing and donor management software company serving the non-profit sector.
4
Moore acquired Worcester Envelope Company, a custom envelope manufacturer. The firm specializes in high color direct mail
envelopes to service the medium to large volume mail industry.
5
Moore acquired Thompson Habib Denison (THD), a social impact agency that services the non-profit sector. The firm
specializes in data-driven marketing strategies that create relationships between donors and non-profits.
6
Moore acquired Tri-State Envelope, a custom envelope manufacturer. This is the fourth envelope manufacturing company
Moore has added to the portfolio. Tri-State has the capacity to manufacture 2 million envelopes per day.
7
October 2022
Moore acquired
Communications
Corporations of America
8
Moore acquired Communications Corporations of America, an innovator of direct mail printing, data processing,
personalization, finishing, and mail processing.
8
Arial 20 font
Monomoy Capital is a private equity firm with $2.7 billion in committed capital that invests in middle market businesses in the
manufacturing, industrial, distribution, and consumer products sectors
Selected Acquisitions
5
Source: Company website and Company press releases
About Monomoy Capital
▪ Founded in 2005, Monomoy Capital aims to maximize
value for LPs by combining access to inefficient
markets with operational value creation in businesses
facing an inflection point
Monomoy Company Information
In August 2021, Mac Papers + Packaging, a Monomoy portfolio company, announced the acquisition of Dependable
Packaging Solutions (DPS), a distributor of corrugated products, point of purchase displays, and other packaging supplies
1
In March 2020, Monomoy Capital Partners announced the acquisition of Mac Papers to establish the platform company Mac
Papers + Packaging
2
▪ Representative industries include
aerospace & defense, building
products, HVAC, paper, packaging,
forest products, industrials,
consumer products, and others
Committed capital
across a family of five
investment funds
Successfully executed
middle market
transactions since
inception
▪ Monomoy focuses on companies with a substantial
North America focus, enterprise values up to $1B,
family-owned businesses, corporate divestitures and
take-privates
3
In August 2016, Mac Papers, a merchant distributor in the Southeast U.S., announced the completed acquisition of Higdon
Paper & Packaging, a paper, print, packaging, facilities supplies, and office products distribution business
Case Study: Monomoy Capital
Target EBITDA range of
investments
Arial 20 font
Recent M&A Transactions in the Envelope and Direct Mail Sector
6
Source: S&P Capital IQ, MergerMarket, news sources and press releases
Acquired
Communications Corporation of America is an industry
innovator of direct mail printing, data processing,
personalization, finishing, and mail processing. Moore
has made the investment in CCA to add to its supply
chain strength across printing, production and
envelope manufacturing in the mid-Atlantic region.
Tulsa, Oklahoma Boston, Virginia
Undisclosed
Acquired
Established in 1932 and headquartered in
Ridgefield, New Jersey, United Envelope specializes
in manufacturing and printing of envelopes for its
blue-chip customer base. United Envelope operates
out of three state-of-the-art manufacturing facilities
in New Jersey, Pennsylvania, and Ohio.
Austin, Texas Long Island City, New York
Undisclosed
Acquired
Founded in 1978, Royal Envelope is an envelope
manufacturer and lithography company that is
headquartered in Chicago, Illinois. Royal Envelope
primarily focuses on higher-end, specialized, highly-
decorated envelopes for the direct mail market.
Quebec, Canada
$21M EV | 0.53X EV/Revenue
Chicago, Illinois
Arial 20 font
Benjamin F. Edwards Investment Banking at-a-Glance
We recognize the importance of understanding, positioning, and advocating a client’s industry position and value
drivers as well as practically addressing potential challenges in order to achieve client objectives. Our team is
known for selling owner-operator and family-owned businesses at premium prices.
▪ We are committed to providing client-first service and supporting our
clients with conflict-free advice they need to make informed decisions
about selling their businesses
▪ Our highly experienced investment banking team manages
relationships and leads executions with dedicated senior-level
engagement throughout the entire sale process
▪ We maintain strong relationships with strategics and financial sponsors
and have senior-level access to potential buyers and investors
▪ We are known for selling owner-operator and family-owned businesses
and have a track record of achieving premium valuation for our clients
▪ Paper, Packaging & Printing
▪ Engineering & Construction
▪ Pet Products & Services
▪ Business Services
▪ Manufacturing & Services
7
Shelby Schagrin
Head of Investment Banking
Managing Director
(314) 480-1032
shelby.schagrin@benjaminfedwards.com
Neil Dennis
Managing Director
(314) 354-5306
neil.dennis@benjaminfedwards.com
Marc Lerma
Analyst
(314) 326-4364
Cal Gaynor
Associate
(314) 480-3625
cal.gaynor@benjaminfedwards.com
Rachel Zhang
Managing Director
(314) 354-5304
rachel.zhang@benjaminfedwards.com
Philip Metzger
Director
(314) 480-1014
philip.metzger@benjaminfedwards.com
Benjamin F. Edwards Investment Banking Team
Why Benjamin F. Edwards Investment Banking Extensive Industry and Transaction Experience
This report is provided for informational purposes only and should not be construed as an offer to buy or sell, or a solicitation of an offer to buy or sell, any financial instruments.
Arial 20 font
Selected Closed & Pending Transactions
•
Exclusive Sell-Side
M&A Advisor
Project Cheetah
Healthcare Staffing
Pending
•
Exclusive Sell-Side
M&A Advisor
Project Blue Sky
Pet Products
Pending
A portfolio company of
HAS BEEN ACQUIRED BY
•
Exclusive Sell-Side
M&A Advisor
A portfolio company of
HAS BEEN ACQUIRED BY
•
Exclusive Sell-Side
M&A Advisor
•
Exclusive Sell-Side
M&A Advisor
HAS BEEN ACQUIRED BY
•
Exclusive Sell-Side
M&A Advisor
HAS BEEN ACQUIRED BY
A portfolio company of
HAS BEEN ACQUIRED BY
•
Exclusive Sell-Side
M&A Advisor
•
Exclusive Sell-Side
M&A Advisor
HAS BEEN ACQUIRED BY
A Private Investor Group
•
Exclusive Sell-Side
M&A Advisor
HAS BEEN ACQUIRED BY
•
Exclusive Sell-Side
M&A Advisor
HAS BEEN ACQUIRED BY
A portfolio company of
WBC Extrusion
Products, Inc.
HAS BEEN ACQUIRED BY
•
Exclusive Sell-Side
M&A Advisor
A portfolio company of
HAS BEEN ACQUIRED BY
•
Exclusive Sell-Side
M&A Advisor
•
Exclusive Sell-Side
M&A Advisor
HAS BEEN ACQUIRED BY
•
Exclusive Buy-Side
M&A Advisor
HAS ACQUIRED
•
Exclusive Sell-Side
M&A Advisor
HAS BEEN ACQUIRED BY
•
Exclusive Sell-Side
M&A Advisor
HAS BEEN ACQUIRED BY
•
Exclusive Sell-Side
M&A Advisor
HAS BEEN ACQUIRED BY
Professional Services
A portfolio company of
HAS BEEN ACQUIRED BY
•
Exclusive Sell-Side
M&A Advisor
8
Tombstones include transactions closed by BFE professionals at prior firms.
