| 101Market Focus: North America M&A changes label landscape in North AmericaMergers and acquisitions continue to be the hallmark of the North American region, as converters contend with labor pressure. Luis Rodriguez reportsergers and acquisitions continue to be a key trend “Through M&A, we’ve been able to throughout the North American region, and 2022 Mbrought its fair share of M&A activity for both converters enhance our product lines, core and suppliers. Labels & Labeling reported on more than 25 mergers and acquisitions across the United States and Canada.competencies and geographic Many of the larger players continued to grow their North presence to offer more value for American footprint, such as Fortis Solutions Group, which made six acquisitions in 2022, marking a total of 22 manufacturing sites in our customers, and so, ultimately, the US and Canada. Private equity frms that have taken a keen interest in the label we’re going to continue to pursue industry, have started to cool down recently, largely thanks to high interest rates. additional opportunities”‘I predict that once interest rates start to decline again and the market becomes more hospitable to private equity acquisitions, we For the frst time in show history, there was not a single fexo are going to see a sharp increase in activity and even more interest press on the show foor, and digital press manufacturers took in printed packaging than we saw in 2020 and 2021,’ says LPC’s full advantage. Jennifer Dochstader. Many digital press debuts happened at the show, including ‘Our industry has proven itself. It’s an industry that is resilient Durst’s 20in Tau RSCi, Dantex’s Pico 1200s, Domino’s N730i and through pandemics, continued global uncertainty and recessions. HP Indigo’s V12 digital press, which, by the end of the show, had 11 Private equity groups are constantly seeking safe harbor sectors and letters of intent signed by North American customers.we will see activity return at an even higher level once the lending Digital embellishment was trending across the converting markets open up again.’ equipment manufacturers who were showing visitors walking the Large converting groups continued to move on acquisitions that ‘Digital Embellishment Trail’ exactly what the equipment is truly enhance their product lines and core competencies. capable of.L&L spoke with John Wynne, CEO of Fortis Solutions Group Flexo manufacturers have enjoyed several years of capital and among the topics covered was the company’s acquisition expense dollars headed their way, as converters added capacity strategy and whether Wynne envisions the current pace of in the wake of pandemic boosts from pharmaceutical and health acquisitions to continue. industries, for example.‘We see M&A as one of our key growth drivers. Through M&A, The focus for the future will be fully automated equipment and we’ve been able to enhance our product lines, core competencies technology that can drive production effciencies. Converters are and geographic presence to offer more value for our customers, now looking at equipment that can ease the burden of a labor and so, ultimately, we’re going to continue to pursue additional shortage. According to the US Bureau of Labor Statistics, over 10 opportunities,’ Wynne says. million jobs remain unflled across all industries. In addition to Wynne’s Fortis Solutions Group, converting The pandemic and other world news events have emphasized the groups like Resource Label Group made key acquisitions to fragility of the global supply chains, as a paper shortage plagued enhance its pharmaceutical, biotech and healthcare industry the industry, prices increased, and lead times grew. Last year, we packaging, while Brook + Whittle expanded its mid-web fexible saw an uptick of converters expanding their warehouse space packaging printing capabilities. and holding on to more inventory for fear of running out or to This spate of M&A activity also brought forth changes in the compensate for delivery delays.buying market. Large converters have more leverage for negotiating These challenges changed the conversation at Labelexpo prices and have infuence with suppliers that independent label Americas 2022.companies might not. ‘The conversations on the show foor revolved around the real It’s perhaps why buying groups like FLAG (Flexo Label business issues that converters are grappling with today,’ says Advantage Group) have witnessed rapid growth and a record Epson’s Victor Gomez. number of new members in 2022, giving the independent ‘They weren’t there to hear the usual feeds and speeds. converter strength in numbers. Given industry-wide shortages, they wanted to know how our technology can help them minimize media waste, or how will our Digital takes Labelexpo Americas 2022 automation lessen claims on scarce labor resources in their shops. This year saw the much-anticipated return of Labelexpo Americas. These were substantive conversations beyond the smokescreen of The show’s return featured hundreds of exhibitors showcasing specs and brochures.’ products to over 13,000 visitors from across the globe. Labelexpo tends to put a magnifying glass on the trends of the label To read more on the North American label market, visit industry. At Labelexpo Americas 2022, it was easy to see a digital www.labelsandlabeling.com/north-americatransformation taking place. Jan - Mar 2023