68 | M&A in North AmericaM&A in the North American label marketThe label industry is no stranger to M&A, but in recent years there has been a surge of activity that is changing the face of the sector. Luis Rodriguez reports he North American label industry has historically been a headquartered in Virginia Beach, Virginia, providing very fragmented space, with a large number of converters pressure-sensitive labels, multi-ply coupon and booklets, fexible Toperating on a local-to-regional level for decades. However, packaging printing, shrink sleeves, folding cartons, and label after an infux of M&A activity over the past few years, it’s clear applicators.that this dynamic is shifting. ‘We have a particularly fragmented industry of over 2,000 ‘The US industry is absolutely going through a consolidation. converters. That fragmentation has led Fortis and others to pursue Some of which are signifcant, where most of the larger players are M&A as we see the benefts of scale for our customers,’ says getting much larger,’ says Bob Cronin, L&L columnist and managing John Wynne, president and CEO at Fortis Solutions Group. ‘As we partner at The Open Approach, an M&A consultancy focused on the think about our acquisition strategy, the four pillars that have world of print. guided us have been geographic expansion, product diversifcation, end-market diversifcation, and intellectual capital.’Over the last decade, Fortis has expanded its operations from “Private equity is looking just a single manufacturing plant to 15 facilities with over 1,000 employees across the United States. It was recently acquired by at the label industry and private equity frm, Harvest Partners.The strategy that Wynne describes is common among other seeing that it’s a safe converting groups across North America. Larger converters such as I.D. Images, Resource Label Group place to invest money”and Brook & Whittle have also been making strategic acquisitions to enhance their service and to have a leg up over others in an In the North American market, with thousands of independent industry where being in the backyard of a potential customer is still converters operating across the continent, the fragmentation has an advantage.created opportunities for many of the larger converting groups to And outside the larger converting groups, other players are make major plays, expanding their reach and what they can offer to placing a stake in the label sector. Private equity frms such as Sole current and potential customers. Source Capital, Wynnchurch Capital, Warburg Pincus, Clayton, and Take, for example, Fortis Solutions Group, a converter Dubilier & Rice see the label industry as a safe and proftable place labelsandlabeling.com