AlphaGraphics Seattle Widens its Capabilities and Adds Wide-Format to the Mix
Acquiring companies could be described as mundane for AlphaGraphics Seattle, which has purchased 15 businesses in the past 16 years to help expand their offerings and grow financially. The local commercial printer with four regional storefront locations, which focuses primarily on digital and offset printing, marketing campaign management, digital marketing, data management and promotional products, recently set out on a mission to break into the wide-format sign and banner market.
The most streamlined way to obtain this goal was to acquire and tuck-in an already solid signage company, which ended up with AlphaGraphics Seattle landing a deal with already-successful local business Stella Color early in 2018. Stella Color’s repertoire included stand-up banners, posters and wide-format signs for the retail, museum, event and trade show pop-up markets.
This acquisition certainly illustrates the trend of market convergence we’ve seen over the last few years between commercial printers and signage and graphics companies. Commercial printers are expanding into signage and sign companies are looking to take on the commercial printing space. Diversify, diversify, diversify! If you aren’t merging, you aren’t growing.
President and CEO of AlphaGraphics Seattle Chuck Stempler says the main purpose for this business decision was to expand its client base and obtain new capabilities. “Stella Color serviced a distinct sales channel from AlphaGraphics Seattle and thus there was zero customer overlap,” he explains. AlphaGraphics can now service clients looking for dye-sublimation printing and related fabric finishing, rigid flatbed printing for perfect registration projects and heavy-duty triple axis CAD work. Another notable reason, Stempler notes, was to add sales, design/prepress and production personnel with highly developed, specialized skills to the team.
“It was important to acquire Stella Color because at the correct transaction value, the growth and special capabilities could be added to our existing grand-format business at a significant discount versus adding these piece by piece,” he explains. “Further, the acquisition route whereby the entire Stella Color company was merged with AlphaGraphics Seattle expedited by a year or more the addition of capabilities and unique market penetration.”
Stempler admits the actual back-end business logistics of the deal were pretty smooth since they have been through similar acquisitions many times over. “We have a very developed due diligence process,” he states. “We gathered all of the discovery information and performed our internal review and assessment of the condition of Stella Color and the opportunities the acquisition represented. We tested the Stella Color pricing model to determine if it is compatible with our existing value structure.” The only obstacles, he explains, involved the acquisition price, which is no surprise in any deal. He says this was overcome with time, patience and compromise by both the seller and the buyer.
What’s in a name you ask? Well, Stella Color’s operations and all personnel were moved to the AlphaGraphics Seattle facilities 30 days after the acquisition closed on January 29, 2018. All Stella Color clients will be moved over to the AlphaGraphics Seattle name. Stella Color will be officially dropped and the company will operate solely as AlphaGraphics Seattle.
Mergers and acquisitions have been running wild as of late and the trend continues as markets merge and companies capitalize on expanding opportunities and their client base. The AlphaGraphics Seattle/Stella Color deal is just one signature example in a pool full of print marketplace consolidation.
To see how convergence is impacting the market as a whole, be sure to add PRINTING United to your calendar for 2019 (October 23-25). PRINTING United, a joint venture of the Specialty Graphic Imaging Association (SGIA) and NAPCO Media, builds upon the strength and reputation of SGIA Expo, the industry’s premier showcase for graphic and visual communications. Focusing on the opportunities presented by the convergence of printing technologies and markets, PRINTING United will cover print and finishing technologies in industry segments from garment to graphic, packaging to commercial, and industrial. Its objective is to convey all components of integrated solutions to satisfy virtually any client need.