SUMMARY

In the recent spate of mergers & acquisitions, managing multiple locations has become a challenge for companies, particularly those that have expanded through acquisitions. Each acquisition typically brings its own unique culture, workflows, operating procedures, and IT infrastructure, creating a complex operational landscape. Having a single, accurate, real-time source of data and control gives companies with multiple locations a competitive advantage.

In the labels and packaging industry, mergers and acquisitions continue to be a key trend throughout the North American region. Sometimes these are consolidation moves, where one label or packaging company acquires another. But increasingly, private equity (PE) firms are acquiring label and packaging companies. It’s part of a strategy to build a multi-location platform geared toward a unified operation that can produce more types of labels and packaging at or near the point of need.  

Fortis Solutions Group is an example of a label company using acquisitions to expand its geographic footprint: According to an article in Labels and Labeling, the company made six acquisitions in 2022, expanding its footprint to a total of 22 manufacturing sites in the U.S. and Canada. As reported in another industry publication, Label & Narrow Web, DRG Technologies acquired La Fiesta Label & Packaging Systems in May of 2023, adding shrink sleeves, flexible packaging, digital, and board stock to its product offerings.  

Private equity firms have their eye on the labels and packaging industry due to its persistent growth opportunities, while other segments in printing are contracting. Investment group RL Hulett reported more than 89 mergers and acquisitions across the United States and Canada during 2022. In 2023, though reduced to 66, M & A activity was still strong. In 2024, the pace of acquisitions is still brisk with the momentum carrying over from 2023, with many analysts predicting that it will be at least as vigorous as 2023. 

LPC’s Jennifer Dochstader, states, “I predict that once interest rates start to decline again and the market becomes more hospitable to private equity acquisitions, we are going to see a sharp increase in activity and even more interest in printed packaging than we saw in 2020 and 2021.”  Dochstader adds, “Our industry has proven itself. It’s an industry that is resilient through pandemics, continued global uncertainty and recessions. Private equity groups are constantly seeking safe harbor sectors and we will see activity return at an even higher level once the lending markets open up again.”  

The challenge, of course, for companies with multiple locations added through acquisitions is to be able to integrate them operationally. Most likely, each acquisition has its own culture, workflow, operating procedures and information technology infrastructure. To gain maximum benefit from these acquisitions, all of these ideally should be standardized across the platform in order to more efficiently manage the business.

The best way to address these challenges is to implement an overarching MIS/ERP solution across all locations. This standardizes the data infrastructure, adds automation, and synchronizes operations across the entire platform. It means that owners and managers can quickly and easily put their hands on the exact data and information they are seeking, whether it be business/financial, prepress, production, customer engagement, inventory and warehousing, etc. The ideal system enables dashboards customized to role, location, and other criteria, enabling employees across the organization to gain fast access only to the data and information required to do their jobs, which simplifies their work and protects the integrity of the overall data infrastructure.