Visant & Phoenix Color

The announcement that Visant and Phoenix Color were "merging" was made public this week. Visant paid $219MM for the privilege, which is staggering considering the "challenges" Phoenix was facing. In the wake of the consolidation that has occurred in the last 2 years, it is noteworthy.

My first concern for this acquisition (let's not call it a merger) is for the Educational Publishing customers. To them, this will probably seem like just another joining of competitors which will serve to eliminate alternatives and perhaps result in higher pricing and extended delivery schedules.

This fear has been expressed with previous acquisitions of Moore-Langen (albeit by Courier), Jaguar (by Phoenix), and Visual Systems (by Visant). Now, Visant controls all but Courier, Moore-Langen, and Coral Graphics (owned by Bertelsmann).

The second troublesome similarity is that of buyer over paying. Most of these purchases were at roughly 1 to 1 of sales volume. Note that I didn't say anything about profit. There is only so much synergy in M & A; not all these buyers will begin to realize what they convinced themselves they would. What happens then? What could this mean for the book industry?

It would seem that Courier & Coral have decisions to make along with some of the other players in the Book business. Does Coral want to compete or be acquired? How much of an alternative does Courier want to provide? Is there another book printer that would want to enter into/expand their book component line? We can expect the Educational Publishers to be vocal in expressing their concerns.

Only time will tell. Please feel free to respond to this blog and use it as a forum.