Two Ann Arbor, MI-based printers located five miles apart, Edwards Brothers and Malloy, announced a merger this week that will create the sixth largest book manufacturing firm in the US with combined sales of $115m.
In an interview with PrintWeek, John Edwards, president and CEO of the newly formed company, now called Edwards Brothers Malloy, noted the two firms had very little overlap in their respective customer bases.
"The main driver of this deal was we had two companies that were serving different market segments but were producing essentially the same product," he explained. "One of us has a pretty significant digital footprint, one of us has a pretty large e-book service and pick and pack operation. And between those two pieces are some really good offset capabilities."
Edwards Brothers Malloy will have three offset facilities: Edwards Brothers' plants in Ann Arbor, Michigan, and Lillington, North Carolina and Malloy's operation in Ann Arbor-along with 11 digital print plants in the US, Canada and the UK.
Bill Upton, president of Malloy, will become the VP of operations for the new company. He told PrintWeek, "We do have somewhat similar sets of press equipment. Edwards Brothers have seven Timsons webs, Malloy has eight Timsons webs - for Edward Brothers five out of the seven of those are two-color; with Malloy two out of the eight are two-color. Edwards has a lot more sheetfed than we do and they have a very large network of digital book centers."
Edwards added, "We're covering each other's weaknesses and exposing each other to significant new customer opportunities and strengthening the bench in terms of the senior management team and the whole overall operation."
The merger comes at an interesting time for book printers, especially those in the education space, as the Obama White House recently announced a new initiative to promote digital text books.
But as Edwards noted, "The economics of electronic text books have not been vetted properly. The one thing you're going to see a lot more of is customization of products. One of our university customers is already doing custom course texts where they are ordering 20 to 30 copies - the student can order a digital version or get the print product if he or she wants - what we're finding is that many students still gravitate to print."
Last year, Edwards Brothers partnered up with UK-based CPIgroup, Australia's Griffin Press and Singapore-based Markono Print Media in an initiative called GPS (Global Print Solutions) that provides publishers with a one-stop solution for printing around the globe.
Of GPS, Edwards said, "It's going really well. We are book manufacturers but we're morphing to supply chain manager and inventory management specialists and we're really able to offer our customers the ability to produce their product worldwide at any time. We are producing books in the UK and Singapore and Australia and vice versa right now and the Malloy customer base will now be exposed to that service."
Added Upton: "It's been a little over 48 hours since we announced the merger and we've already had a number of Malloy customers interested in the GPS system. We had one the other day that was out of stock with a book that was selling well in Singapore and now we're able to supply them."
Edwards Brothers Malloy will have more than 950 employees and Edwards said the company plans to keep both facilities running in Ann Arbor in addition to eight sales offices located across the US. As for possible layoffs, Edwards said some management and sales people were let go in the merger, adding it was still too early to determine whether there will be other cuts.