Transcon buys 4th largest printer for $130 million

[This post has been updated.]

Transcontinental Inc., Canada's largest printer, has fattened up its printing business with the $130 million acquisition of the PLM Group, Canada's fourth largest. With the purchase, Transcon also beefs up its sales force and its position in the direct marketing industry.

With the purchase, it picks up 470 employees in four facilities with reported revenues of $126 million. The all-cash offer of $3.50 a share (a 19% premium over the closing price before PLM revealed it was negotiating a sale) buys out the 51.2% controlling interest of Barry N. Pike, the founder, chairman and CEO of PLM; the directors have recommended that all shareholders tender their shares.

PLM was founded in 1987 and grew into a major niche player in the area of direct marketing products and services, premedia and digital printing.

"PLM is regarded highly by businesses, marketing firms and advertising agencies in Canada," said Luc Desjardins, President and CEO of Transcontinental, in a release. "With PLM, we will become a leader in Canada's direct marketing industry, a fast-growing segment where Transcontinental is already a major player in the United States; PLM will also complement our product and service offering in the Greater Toronto Area. PLM brings Transcontinental a dynamic sales force, which will augment cross-selling opportunities."

A story in the Globe and Mail notes the likely connection between a resurgence of direct marketing (or printed "junk mail") and the advent of "do not call" restrictions on telemarketing, noting that printers in the U.S. bought up direct marketing capacity in the U.S. following similar legislation.