The other shoe drops - Blue Star buys McMillan Print

The long anticipated announcement of the buyout of the McMillan group makes Blue Star Printing Group the second largest regional printer after PMP. The multi-million dollar deal will see owner Bob McMillan remain as a consultant to Geoff Selig, managing director of BSPG Australia. All 600 McMillan employees have been reassured of their future.

The agreement, which will take effect from June 29, includes Canberra-based Pirion, whose managing director, Richard Gibson, has entered into a long-term employment contract with BSPG. The takeover boosts the annual revenues of BSPG to over $500 million, spread across a comprehensive suite of sheetfed and web-printing enterprises.

"This agreement is part of the ongoing rationalisation and consolidation taking place in the Australasian printing industry. McMillan Printing is closely aligned to the vertical product offering we are keen to promote to the market,” said Selig. “The combined companies will report through me.”

The deal is the latest move in a stunning rearrangement of the industry taking place since the advent of private equity late last year. Backed by major shareholder Champ Private Equity, BSPG has slugged it out with rival GEON, backed by Gresham, to gain the lion’s share of the regional printing market. Kick starting the process with its successful takeover of Merritt Madden in 2004, BSPG has countered takeover with takeover as the two giants snapped up mid-size printing companies on both sides of the Tasman. In its progress it has acquired such well-known companies as Link Printing, Kings Mailing Services and Craftsman.

In recent weeks it has bought Michael Smith's National Capital Printing, which now combined with McMillan’s Pirion, gives it an almost unassailable position in the federal capital. The McMillan takeover moves BSPG up a significant notch in the takeover status.

“And no, I don’t think this is the end of it,” said Selig, forecasting a continuing interest in suitable acquisitions.

McMillan Printing has long been regarded as the jewel in the crown for the PE-backed investors. A diverse and somewhat haphazard printing enterprise, it was very much the creation of its idiosyncratic owner who first put it on the market late last year. Recognised as one of the hardest dealers in the industry, Bob McMillan’s company holds some of the best long-term corporate and government printing contracts.

While not necessarily valued for the integration of its equipment, McMillan Printing Group has led the industry over the years in many sectors, not least in print management where it was an early pioneer. The inevitable exit of Bob McMillan will see the industry lose another of the owner/operators who, while once defining the industry, are now becoming an endangered species in the face of consolidation from the major groups.

BSPG is now the most comprehensive printing supplier in the region. Not only is it a major sheetfed printer and print management company, it also has a significant web printing division in Webstar, distinguishing it from its PE-backed rival, GEON. It has also had notable success in retaining the services and commitment of the owner/operators of the companies it has taken over.

Got a view on this story? Drop us a line and let us know