Label Consolidation (Cont’d from Page 1)
most notable examples include: CCL,Avery Dennison, TC Transcontinental, and Winpak. CCL appears to be one of the most active players, Blaige reported, rap- idly expanding its film converting capabilities, aiming at significant economies of scale through backward integration. TC Transcontinental and Winpak, on the other hand, both historically known as film converters, are avid- ly entering the label market, broadening their mar- ket reach through forward integration. Private-equity funded consolidators are relatively smaller platforms that rely on local and domestic markets. These are la- bel converters that gain scale through add-ons within the label space, without a pronounced taste for verti- cal integration. Examples of such serial acquirers are Multi-Color Corp., Fort Dearborn Company, Resource Label Group, and Fortis Solution Group.
itive significance of the consolidations experienced in 2021 is “unprecedented.” The label converting segment analyzed by Blaige is comprised of hundreds of label converters. The seg- ment is made up of primarily small to mid-sized com- panies, as 85 percent of converters have annual sales of less than $100 million, with 75 percent under $50 million.The speed of consolidation in the label indus- try is gaining momentum in the wake of the post-pan- demic recovery, and has impacted all industry partici- pants.As Blaige reports,72 percent of the top 50 North American label companies from 2001 have been elim- inated or sold over the last 20 years, as opposed to 52 percent 10 years earlier. Label M&A consolidation has been close to the average of all segments in the packaging industry, leaving a tremendous opportuni- ty for future consolidation. Blaige is projecting for the consolidation of the label industry to reach 80 percent by 2025. Blaige & Company has identified two distinct strate- gies in the label segment M&A:one being employed by large, global consolidators, and the other by domestic, private equity backed consolidators. Global consolidators are large cross-border market participants, which are publicly funded and often seeking supply-chain vertical integration. Some of the
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Flexo Market News November 22, 2021 3
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